Bulgarian Budget cannot afford child subsidy hikes – minister

Written by on October 23, 2012 in Bulgaria, News - No comments

A day after hundreds of people held protest rallies throughout Bulgaria demanding increased state subsidies for children, Labour and Social Policy Minister Totyu Mladenov said on October 23 that the state Budget could not afford higher payments.

“At this stage, in this economy and with the current gross domestic product, we cannot allocate more money. We pay every year more than 500 million leva in child subsidies – more than half the ministry’s budget is spent on that,” Mladenov said.

An increase in child subsidies would require raising the mandatory social contributions paid by employers and employees – 3.5 per cent of each pay-check is paid to the state to cover maternity leave and generic illness payouts. Raising the social contributions would require negotiations with trade unions and employer organisations, Mladenov said.

Protesters on October 22 – mainly women, as the rallies were branded “mothers’ protests” – asked for longer maternity leave (now at 410 days), as well as increasing the one-off “baby bonus” (240 leva) and the monthly child subsidies (set at 35 leva for each child).

The “baby bonus” was until two years ago was linked to the minimum monthly salary; since the two were decoupled, the minimum salary has increased to 290 leva and is set to go up to 310 leva in 2013.

Mladenov said that his ministry was successful in offering new services, such as employers applying for EU funding to open day-care centres, to compensate for its inability to increase monetary payouts. He said that his ministry, along with the Finance Ministry and the National Revenue Agency, were working on plans to introduce household tax breaks for families with children.

Meanwhile, the Podkrepa trade union bloc asked for a 15 per cent increase in all pregnancy, maternity and children subsidies, saying that it was “unacceptable that state aid has remained at the same level as four years ago, considering the inflation over that period” and describing the Government’s policies as “inadequate against the background of a demographic crisis and falling birth-rates.”

(Photo: Dominik Meissner/flickr.com)

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