Poverty risk cannot be solved with short-term measures - report

RIGA - The poverty risk, which particularly affects families with children and people of retirement age, cannot be alleviated by short-term measures alone, according to the Welfare Ministry's informative report on the mid-term review of social protection and labor market policy, which the government heard today.

The report assesses the implementation of the Social Protection and Labor Market Policy Guidelines 2021-2027, policy results to date, identified challenges and future priorities.

As LETA was informed by the ministry, the risk of poverty in Latvia still exceeds the European Union (EU) average. At the same time, statistical data show that the impact of social benefits and other types of payments on poverty risk remains limited, especially for families with children and pension-age population.

In the area of material support, the medium-term objective is assessed as partially achieved. Although all targets planned by 2024 have been met, about half of the performance indicators have not been achieved. The report concludes that this is due to low average income levels, high income inequality, inadequacy of the social protection system and rising costs of living.

The most important contributions to reducing the risk of poverty and social exclusion have been the reform of minimum income support, the review of the family allowance, the regular indexation of pensions, and the increase of benefits for persons with disabilities and seniors. These measures have improved the material security of more than 100,000 low-income people.

Social protection expenditure in Latvia has increased both in nominal terms and as a share of gross domestic product, but remains lower than in most EU Member States. In addition, high inflation and rising living costs have significantly reduced people's purchasing power, making it harder to make sense of improvements in everyday life.

In the area of social services, the medium-term objective is broadly on track, although some indicators have not been fully achieved. The introduction of a minimum basket of social services in municipalities and the development of new community-based services, including mobile palliative residential care, personal support services and services for children with functional disabilities, were identified as important steps.

However, the assessment reveals uneven access to and quality of social services in different regions, a growing workload for social workers and an increasing demand for care services driven by an ageing population. The report concludes that the capacity of social workers needs to be further strengthened and the long-term care system needs to be developed.

In the area of the labor market, the increase in the minimum wage and the improvement of the system for setting it, as well as active employment measures, which have contributed to a reduction in long-term unemployment, are positive.

At the same time, a number of issues remain to be addressed in this area: the underused employment potential of persons with disabilities, the high number of serious and fatal accidents at work. There is also an increasing share of young people who are not engaged in education or in the labor market, which leads the ministry to conclude that more targeted support measures are needed for the target group of young people.

The medium-term objective in the area of state-provided legal aid has been partially achieved as not all planned activities have been completed. The use of digital solutions in the legal aid system has increased and public confidence in the judicial system has improved. However, citizens' awareness of their rights and of alternative dispute resolution remains insufficient, the report concludes.

In the area of strengthening the governance of social protection and labor market policies, the development of digital solutions, strengthening inter-sectoral cooperation, raising the profile of social work and gender equality policies are among the key actions. At the same time, challenges remain in attracting skilled labor, wage competitiveness and data quality.

Overall, the report concludes that social protection and labor market policies continue to face structural challenges that require comprehensive and long-term measures.

The next programming period should continue to target support to families with children, strengthen the long-term care system, improve the quality of services across the country and develop data-driven, sustainable and crisis-resilient social protection and labor market policies.