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FEATURE STORY

World Bank Helps Ukraine to Build a Modern Social Safety Net

May 27, 2010


" The Social Assistance Modernization project with World Bank support is strengthening the effectiveness of the social safety net to be able to protect the poor in times of crisis and beyond. The project became an important part of the World Bank response to the economic crisis in Ukraine. It’s an experience that many other countries in the former Soviet Union could learn from.  "

Only 5 years ago one could see quite a gloomy picture near most of the Local Welfare Offices. People waited in long queues, war veterans did not have a place for sitting and applicants were often not treated with much respect. Now things have changed. The welfare offices are open at convenient times and applicants for social assistance are generally well-treated. What motivated this change and how did it come about?

Ukraine spends around 2% of GDP on its Social Safety Net programs, including trough income-tested programs. This is about average for OECD countries, so lack of resources would not seem to be a major problem. But lack of targeting of these resources is. Poorly targeted housing subsidies and privileges take most of the social assistance resources and in general do not tend to reach the people that really need them. Ukraine operates a number of well-targeted programs that are able to channel most of the resources to the poorest 20% of the population: 86% of the funds of the program to low income households accrue to households from the poorest quintile; 57% of the funds of the program for single mothers; and 54% of the funds of the program for children cared for by custodians. However, the coverage of these programs is low. Ukraine can achieve a more cost-efficient spending mix, either by scaling up well targeted programs like the ones described above at the expense of untargeted ones, or by tightening eligibility criteria for the categorical programs.

At the same time, the move towards better targeted and more efficient social transfers also necessitates administrative improvements to contain costs and reduce delays in dispensing social assistance benefits. Some of these improvements are “no regret” type in that they are independent of the policy choices made. Some of them, however, are vital if a better targeted social assistance program is to work effectively.

In order to address these challenges the Ministry of Labor and Social Policy of Ukraine and the World Bank launched the Social Assistance System Modernization project in 2006. The World Bank provided US$99.4 million for this project that aims to enhance the effectiveness of the social assistance system by developing the administrative capacity of 757 local (rayon/city) welfare offices (LWOs). Under this project technical assistance and information technology support is provided to improve the administration of local social welfare offices to enable delivery of better quality services to clients.

The key principle of the new system is a One Stop Shop model. Kateryna Petryna, Task Team Leader for Ukraine Social Assistance System Modernization project explains how the new model works “This model is similar to what happens in any commercial bank. A bank client typically can receive all bank services in one window. According to the same model an individual comes to the local welfare office for the first time and gets all information about all types of documents he or she should have to access social assistance. Once all the papers have been filled out they are collected by a social worker and within 10 days of handing in all documents and consulting as necessary with the social worker, the applicant will receive all social benefits from the local welfare office.” The Ukrainian model of social assistance is similar to the system in Great Britain. The Ukrainian specialists from the Ministry of Labor and Social Policy visited the United Kingdom a few times and learned the British experience.

After a hesitant start, this new One Stop Shop business model for client intake and benefits administration has been developed and implemented in almost all of 757 local welfare offices all over the country. Over half of all welfare offices have been refurbished (and 90% are undergoing modernization) to make them more attractive to applicants. Better management information systems have reduced the time to take in new clients from more than 4 hours to 2 hours. Efficiency improvements have allowed staff in LWOs to process more benefits per month, thus containing the growth of administrative costs of social assistance programs.

Such improvements would not be possible without significant investment in staff training. Kateryna Petryna reveals that “now substantial funds are opened for strengthening the system of education of local social workers. The new Distance Education Modules are developed with the help of the WB and the Ministry. The modules will be totally computerized and web-based. The e-learning system will give an opportunity to the Ministry to improve the level of its stuff education and also to mitigate the impact of high turnover of the staff in the Local welfare offices."

In the one year remaining to implement the project, the new administrative system will be rolled out and supported with information technology. When the project closes in July 2011, applicants will receive all benefits through the One Stop Shop and will be advised by the local office of labor and social protection how to apply for in kind benefits, how his/her family could get social services and other informational support.

Implementation of the unified technology of client intake in all social welfare offices is a good model for others Ukrainian administrative institutions. In Ukraine citizens still spend much time on applying for passports, driving licenses and other documents. From standing in long queues and following all sorts procedures old people and temporary disabled individuals are suffering most of all.

The Social Assistance Modernization project with World Bank support is strengthening the effectiveness of the social safety net to be able to protect the poor in times of crisis and beyond. The project became an important part of the World Bank response to the economic crisis in Ukraine. It’s an experience that many other countries in the former Soviet Union could learn from.


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