SOME INFLUENCES OF THE ROMANIAN SOCIAL ASSISTANCE STRATEGY REGARDING THE INCENTIVE BENEFIT ON THE SUSTAINABLE STRATEGIC MANAGEMENT OF ORGANISATION.

• Author: Stroe, Cristina
• Position: Report

1. Introduction

   The paper focuses on the analysis of the social assistance benefit of parental incentive (monthly incentive, insertion incentive) as a measure of support for the family with children, for the child rearing support. The paper analyses indicators on the amount of this social assistance benefit, the number of beneficiaries of parental incentive (the average number of monthly incentive beneficiaries, the average number of insertion incentive beneficiaries), of those persons who returned to the labour market and benefited from insertion incentive, the number of parental allowance beneficiaries. We believe that these indicators provide a real picture related to the intention of people to return to work despite the extension of parental leave, up to the limit provided by law, which enhances the effects of this insertion incentive--a social assistance benefit with the major role of incitement to the activation on the labour market of the beneficiaries.

   If other researches and papers of the authors analysed the impact of insertion incentives on poverty rates (the threshold of 60% of median income per equivalent adult) and severe poverty (40% threshold), by different characteristics of the household (residence, sex and age of household head, structure of the household, i.e. the number of persons in the household, taking or not into account the component of the consumption of agricultural products from own resources, i.e. the own consumption) and other analyses aimed to estimate the impact of this social assistance benefit on income distribution (by quintiles of income, by certain types of families--families with children, residence, employment status of the household head, education level and gender component), in this paper we focused on the analysis of the number of beneficiaries of the incentive provided for childcare. The indicator shows, in a way, how people benefiting from this form of social support perceive the returning to the labour market before the end of the granted child rearing leave. Thus, with sudden and significant increase of the amount of the insertion incentive (a 5 times increase), many beneficiaries actually returned to the labour market. It is true that not only this incentive encouraged parents to return to work before completing the statutory leave period for child rearing; considerations are more numerous, especially when analyzing a variety of perspectives. As we are presently unable to take into account all these perspectives, we believe that because of the yearly increase of the number of people benefiting of this form of social assistance (due to the sudden and important increase of its amount), this incentive can be considered an exciting activation element, stimulating the return to the labour market.

2. Amount of the Parental Incentive and Monthly Average Number of Incentive Beneficiaries

   The parental incentive was introduced on the 1st of January 2006 by Government Emergency Ordinance (GEO) no. 148/2005 on family support for child rearing, aimed at improving the socio-economic balance of the family. Through the Social Assistance Framework Law (Law no. 292/2011), the parental incentive is a social support offered to the family for child rearing. The incentive is a financial support for parents who decide to return to work before the end of child rearing leave (according to GEO no. 111/2010 on the leave and monthly allowance for children rearing). When receiving the incentive, the allowance for child rearing is being suspended. Depending on the legislative documents that regulate this social assistance benefit, the quantum of the incentive may be as following:

   --Parents with children born before the 31st of December 2011 returning to work before the end of the child rearing leave, received a monthly incentive of 100 lei until the child reached the age of 2 or 3 (in case of a disabled child) (under GEO 148/2005).

   --Parents with children born after the 1st of January 2011 that chose to benefit of child rearing leave and allowance for the first year of their child's life and to return to work anytime before the end of this leave, were entitled to receive an insertion incentive of 500 lei until the child reached the age of 2 or 3 (in case of a disabled child) (under GEO 111/2010).

   --Parents with children born after the 1st of January 2011 that chose to benefit of child rearing leave and allowance up to two years and return to work anytime during the child rearing leave, were entitled to receive an insertion incentive of 500 lei until the child reached the age of 2 or 3 (in case of a disabled child) (under GEO no. 124/2011).

   --Since October 2012, the quantum of the insertion incentive has no longer been differentiated in accordance to the date of child birth, so the amount of the insertion incentive has been established to 500 lei (531,25 lei from the 1st of July 2016, when the amount of the insertion incentive hasn't been connected anymore to the value of ISR, but has been calculated as 50% of the minimum amount of the child rearing allowance).

   Reforms on family support for child rearing, aimed at improving the socioeconomic balance of the family, have given a great importance to the labour market return of people benefiting of policies on maternity and child care and rearing. Thus, with a substantial budgetary effort, the incentive's amount suddenly increased significantly, from 100 lei to 500 lei. This important increase also led to the increase of the propensity of persons entitled to benefit from the child rearing allowance that decided to resume their professional activity, which resulted in an increase in the number of insertion incentive beneficiaries.

   During 2006-2011 the number of people that returned to the labour market registered both slight increases and slight decreases. Declines were registered during 2008-2010, when increasingly fewer people benefiting of parental incentive returned to the labour market, while the number of parental allowance beneficiaries increased, due to the increase in the amount of this parental allowance, while the amount of the monthly incentive remained at the same value of the previous years (100 lei), thus not offering a strong enough nudge towards employment return. Also, the situation generated by the economic crisis in Romania, with jobs scarcity and uncertainty, was not beneficial to stimulate the return to the labour market. In this context, only 4-5% of the total beneficiaries of this program for family support returned to the labour market in 2010-2011, compared to 9.1% in 2008.

   In 2011, there were significant changes in the amount of the incentive compared to the previous year, from 100 lei to 500 lei, which meant an unprecedented increase in the amount of a social assistance benefit, but that amount was differentiated by date of child birth. However, in 2011 the number of beneficiaries of insertion incentive increased slightly compared to 2010 and also the number of beneficiaries of parental allowance, associated to an increase in the share of the people deciding to return to the labour market in the total number of beneficiaries of this family support program. Even if this is not a very massive growth, we must note the beginning of new changes, with an increase in the propensity of beneficiaries that decide to return to the labour market, due mainly to a higher value of the insertion incentive amount. The insertion incentive initiated in 2011 showed its effects in 2012, so its value, much larger than in previous years, has mobilized parents to return to the labour market. The year 2012 came with profound changes on the family support program...