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Table 4 Reforms implemented since the onset of the crisis (up to start 2012)

From: Minimum income protection in the austerity tide

Hungary (2009)
The 2009 Hungarian reform (adopted by the parliament on December 15th 2008) aimed to help long-term unemployed re-enter the labour market (Frey 2011). Therefore, it distinguished between two groups of minimum income beneficiaries, the frail and those able to work. A new benefit was installed for the group deemed able to work, the ‘stand by allowance’. The other group remained eligible for regular social assistance. The new stand by allowance is an individual benefit for each eligible adult, regardless of family composition. The individual benefits were higher, whereas work and activity conditions were severely tightened. Moreover, if no jobs are available, (remunerated) community work is offered. The stand by allowance is only payable if no community work can be provided. Since its introduction in 2009, this new scheme was changed on multiple occasions. For instance, from 2010 onwards, only one adult per household was eligible for the stand by allowance. Later, the name of the social assistance benefit changed to ‘wage subsidizing benefit’ and again to ‘employment substitute support’, combined with new activity requirements. In January 2012, the standard rate of the benefit was reduced by 20 %.
France (2009)
The introduction of the Revenue de Solidarité Active (replacing the former Revenu Minimum d’Insertion and the Allocation de Parent Isolé) aimed to increase work incentives, and to make sure that taking up employment would be financially rewarded. An important element in this respect was the introduction of an earnings disregard of 62 % in the calculation of the new minimum income benefit. In addition, the reform introduced more activation efforts.
Portugal (2010/2011)
The Portuguese reform aimed for a more efficient and effective minimum income scheme (but see Rodrigues 2012). Meanwhile, a number of elements of the reform can be identified as austerity measures necessitated by the crisis context. The main measures include an extension of the income and household concept used for the means test and new (and less generous) equivalence rates. In addition, the complementary support awarded for specific needs was abolished. The conditionality of the minimum income benefit was tightened. Harsher sanctions were introduced, as well as a number of anti-fraud measures (for instance, a false claim excludes one from any means-tested benefit for a 2-year period).
Austria (2010)
The Austrian reform aimed to reduce the differences between the different regional minimum income schemes. An explicit aim was that no beneficiary would lose because of this harmonization. Viennese recipients saw their net income package in fact substantially increase. Main preoccupation was a harmonization of minimum rates and of access conditions. In addition, the reform aimed to facilitate the activation of minimum income beneficiaries by increasing access to public employment services for minimum income recipients.
Netherlands (2012)
The Dutch reform of the minimum income scheme aimed to increase the conditions tied to benefit receipt. Main justifications of the reform were increasing deficits because of the economic crisis, and the perceived need to increase work incentives (Rijksoverheid 2011). The increased conditionality targeted different groups, most importantly lone parents, young jobseekers and artists. In addition, municipalities became entitled to ask for services in return for benefit receipt, even if this did not directly improve prospects for finding employment. The reform also widened the household concept for the means test, yet this measure was revoked a few months later.
Lithuania (2012)
The 2012 changes to the Lithuanian minimum income scheme aimed to make social assistance more effective and just. In addition, work incentives were strengthened. The main changes were to facilitate access to the minimum income scheme, by abolishing the requirement to be a registered unemployed for 6 months prior to being eligible for social assistance. Equivalence scales were adapted, with higher benefit levels for the first member of the family, and lower for the remaining family members. Benefit levels are gradually reduced for long-term beneficiaries. For beneficiaries without children, the benefit can be suspended after 60 months. Former beneficiaries who take up low paid employment can continue to receive part of their benefit as a back to work bonus.
Romania (2012)
Romania introduced a new law on social assistance in 2011 that changed the calculation of minimum income benefits. The benefit levels are from 2012 onwards based on a national reference indicator. Although this will probably result in lower benefits in the longer run, the immediate impact is relatively limited. The aim of the reform is to better target social benefits, and to rationalize (decrease) social expenses. The new law was only partially justified on grounds of the financial crisis.
Slovenia (2012)
The Slovenian reform was already legislated in summer 2010, but due to the crisis actual implementation was delayed until 2012. The changes addressed both the work incentives in the minimum income scheme, as the streamlining of the awarding of means-tested benefits. One of the consequences was a tighter means test (for instance, child benefits are included in the means test, a change that is not completely compensated by the 10 % increase in children’s base rates within the minimum income benefit). Also, the definition of a lone parent family was tightened. The reform introduced new equivalence rates that take account of the work effort of beneficiaries. Moreover, the 2010 legislation foresaw a higher standard rate, but due to the crisis, the envisaged increase was only partially implemented.
  1. Source: CSB-MIPI Version 3/2013 (Van Mechelen 2011)