Someone always pays for the provision of social services. In most cases, it is the state and local self-government bodies. So recipients get the wrong impression that they are free.
However, the mechanisms of financing social services are quite complex. The cases when social services can be provided on a paid basis and how their cost is calculated were discussed during an info session in the Regional Office of U-LEAD in the Zhytomyr Oblast.
“Transferring social services to the municipal level in 2020 has caused an additional strain on local budgets. One might wonder how their provision should be funded. After all, service providers do not work for free. The implementation of paid social services is the future, which starts today,” said Valerii Mikulich, Adviser on Decentralisation and Local Self-Government at the Regional Office of U-LEAD with Europe in the Zhytomyr Oblast.
In a short survey among almost 200 participants of the event, representatives of the municipalities put a fair approach to payment as the top advantage of the introduction of paid social services. The second advantage is obtaining additional financial resources by the municipality, and the third is improving the quality of social services.
“Unfortunately, in our situation, there are no more funds in local budgets, and the number of recipients of social services is constantly growing. So we face the challenge of high-quality and efficient spending. Municipalities should have a very clear understanding of their exact population, who need social services and which services are needed,” said Dmytro Prokopets, Adviser on Municipal Finances and Management at the Office of U-LEAD in the Chernivtsi Oblast.
Who is entitled to free social services?
According to the law, all social services are provided free of charge (that is, at the expense of budget funds) to the following categories, regardless of the recipient’s income:
- persons affected by human trafficking;
- persons who suffered from domestic violence or gender-based violence;
- children with disabilities;
- persons with disabilities of group I;
- orphans;
- children deprived of parental care;
- families of guardians, caregivers, adoptive families;
- family-type orphanages;
- foster families;
- persons who have been harmed by fire, natural disaster, act of God, hostilities, terrorist act, armed conflict, temporary occupation.
Furthermore, social services are provided free of charge at the expense of the budget (that is, free of charge for recipients) if the recipient’s total average monthly income is less than two subsistence minimums for the corresponding category of persons.
When are social services provided on a paid basis?
If the total average monthly income of the recipient of social services is greater than two but less than four subsistence minimums, social services are provided at the expense of the recipient or third parties subject to the establishment of a differentiated fee for social services.
Moreover, a fee for social services for such persons may be established if the services are provided in excess of the extent determined by state laws and regulations.
In addition, if non-state service providers are involved in the provision of social services through the use of mechanisms of social procurement or public-private partnership, as well as social programmes, such services should be paid for by establishing a fee to the providers of the cost of such services.
“The involvement of social service providers from the non-state sector is the future. This is a healthy competition that leads to the improvement of the quality of social services. A fair approach to payment for the provision of social services begins with the establishment of differentiated fees. After all, differentiation means applying different approaches to payment under different conditions (income, family composition, etc.) faced by the recipient of social services,” said Oksana Shvets, Adviser on Municipal Finances and Management at the Regional office of U-LEAD in the Ivano-Frankivsk Oblast.
According to the law, differentiated fees mean part of the cost of social services, which is paid to the provider by the recipient of services. Differentiated fees for the provision of social services should be established strictly in the amount determined by state laws and regulations. After all, services provided above state standards should be fully paid for.
Who sets the fees and how are they calculated?
Differentiated fees for the provision of social services are established by:
- The body that makes a decision on providing or denying the social services
- The provider of social services (for example, Territorial Social Services Centres, Centres for the Provision of Social Services)
The decision to set the fee should be made when considering the application for the provision of social services. Differentiated fees for the provision of social services should be established upon entry into the relevant service contract, which should specify the sources (differentiated fees, whether in full or at the expense of budget funds) and the method of payment.
The amount of the differentiated fees for the provision of social services, except for inpatient and palliative care, must not exceed the upper limit, which is set at the level of 75% of the cost of provided social services if the cost does not exceed the limit.
Differentiated fees for the provision of inpatient and palliative care services are established:
- in the amount of 80% of the average monthly total income of the service recipient;
- in the amount of 80% of the value of the provided social services unless such value exceeds 80% of the average monthly total income of the recipient of the services.
Experts also emphasise that today, to calculate differentiated fees correctly, the limit should be understood as the difference between the total average monthly income of the recipient of social services and two subsistence minimums for the corresponding category of persons.
Moreover, keep in mind that the approach to determining the total average monthly income of the recipient’s family per family member has recently changed. From now on, it is determined through the automated exchange of available data between the telecommunication systems of authorities, companies, institutions and organisations for one quarter preceding the month that precedes the month of application (para. 5 of Article 28 of the Law of Ukraine “On Social Services” as amended on 14 April 2022).
In addition, for the purpose of determining the amount of the differentiated fees for the provision of social services, the recipient’s family includes persons who reside together with the recipient of social services; have a common household with a recipient of social services; have mutual rights and obligations and are connected to the recipient of services on the basis of marriage, blood relationship, adoption or other grounds consistent with the law.