Ukraine's Social Safety Net Works Better to Serve the Neediest

Alina Bondar is the mother of a newborn. She visited the social welfare worker in Novopavlivka village to apply for social assistance. Having heard that red tape could be daunting at local institutions, she was nervous. But her fears were unfounded.

"I did not expect my application for childbirth grants to be approved so fast," says Bondar. "It is very convenient to have a representative from the local welfare office here, in our village. I did not have to travel to a regional center, like everyone did before."

A few years ago, villagers from Novopavlivka had to travel to Bashtanka, a town 15 kilometers away, to apply for benefits. After spending time and money on the trip, people wasted five or six hours waiting in long lines. Upon reaching the head of the line, they were often asked to come back with additional documents and start all over again at the next visit. It was a vicious circle. But there have been changes for the better in recent years.

Specialists from the Ukrainian Ministry of Social Policy decided to reshape the administration of a targeted social safety net following a model similar to the one in Great Britain. The British model is much more customer-oriented, as compared to the outdated Ukrainian one, where social workers still had Soviet ways of treating people.

First Deputy Social Policy Minister Vasyl Nadraha believes that "today development of a targeted social safety net is the main priority for the Ukrainian Government." He is confident that in a few years, personal incomes of citizens will be the main criteria for receiving social benefits.

Ukraine spends around 2 percent of its GDP on social safety net programs. This is average for developed countries. So lack of funds does not seem to be a major problem. But mistargeting of these funds is. Most social assistance resources are spent on people who get them not necessarily because they are poor, but because they are in a category that is entitled to benefits. Benefits are not reaching the people who really need them.

The loopholes in Ukraine's safety net are a problem for the Government. "We are monitoring the social situation in Ukraine every day," says Vasyl Nadraha. "It is important to see what we have and where we are moving to. As of today, almost 230,000 people have received housing subsidies. And after we started a new, much simpler mechanism of granting benefits, people do not need to go to many other offices, like the offices of companies providing communal services or electricity."

Ukrainians with low income have long received "housing" subsidies to reimburse them for housing or communal services expenses. Subsidies are also available for heating and cooking fuel.

To request subsidies, people had to visit a social welfare office, fill in an application, declare income and property, and show their last six months' earnings. They spent a lot of time visiting different Government offices and collecting all the paperwork necessary for the application.

But now, the Ukrainian social safety net is going through radical changes in order to better serve beneficiaries. In 2006, Ukraine's Government, with the assistance from the World Bank, started to modernize the system by training staff at 756 local welfare offices and equipping them with modern computer systems.

The guiding principle is the one-stop-shop. Individuals can get all the benefits they qualify for in a single application and by providing one package of documents. At their first visit to a welfare office, applicants are informed of all the documents they will need to collect. Once they have filled out and handed in the paperwork, they receive their benefits from the local welfare office within 10 days.

Nina Yakymchuk, Head of the Bashtanka Welfare Office, is happy with the reform. "We have merged two offices," says Yakymchuk. "Before that, one office provided people with state benefits and the other specialized in housing and utilities subsidies. People had to prepare separate packages of documents for each office and for each type of benefit. Now, an applicant comes to one place with a single package."

After a hesitant start, this new business model has been developed and implemented in nearly all of the 756 local welfare offices in the country. Over 90 percent of welfare offices have been refurbished and modernized. Better management information systems have reduced the time needed to process new applications for benefits from over 4 hours to under 2 hours, allowing staff to process more benefits every month.

"The service is now very good," says an older resident of Kyiv. "Earlier, we were standing in these corridors for many hours. To be asked to the desk took too long. Now, the social workers greet us with a smile."

Oksana Kulchytska nurses her temporarily disabled daughter. The new system has made her life simpler. "It is much easier now," says Kulchytska. "Before, I had to spend 4 or 5 days on figuring out the necessary paperwork. Now I need just one day to refresh the information about my daughter."

Thanks to modernization, the poor in Ukraine are now better protected in times of crisis and beyond. It is an experience that many other countries in the former Soviet Union could learn from.