United Nations
Office for the Coordination of Humanitarian Affairs - Belgrade

Review of Urgent Assistance Needs for the Federal Republic of Yugoslavia (Excluding Kosovo)

Winter/Spring 2000/2001

December 5, 2000

The welfare system is designed to provide support to vulnerable groups including the poor, elderly, sick, invalid and disabled, plus children with special needs. For Serbia, it is estimated that the actual number of people in need of social welfare assistance is up to ten times higher than the 254,000 registered beneficiaries; many eligible people are thought not to register because they have in recent years had no expectation of receiving assistance. Allowances are also considered insufficient to meet basic needs and working and living conditions in social institutions are poor due to irregular maintenance.

While the state has maintained regular payments toward social work centres and institutions, and families accommodating welfare beneficiaries, it has fallen into more than 12 months arrears on payments of a number of personal benefits. For instance, out of the total registered beneficiaries in Serbia, only 102,300 (40%) actually received benefits this year to date. Among those who have received no assistance for over a year are 29,818 families who have very low or no means or income (Family Allowance) and 19,486 invalids or persons with serious ailments who require help from other persons for eating and bathing (Sickness/Nursing Allowance). Together with the Placement and Training Allowances, arrears stand at US$9.4 million with monthly obligations of US$1.06 million amounting to US$6.34 million over 6 months.

The system is seriously under-resourced. The international community has responded by including some social welfare categories and low-income pensioners in its humanitarian food assistance programme. Donors are also providing fresh food and heating fuel to social institutions through the winter, and are considering assisting with essential rehabilitation of run-down facilities and equipment at institutions.

Structural reform and investment is required, including financial reform to ensure future sustainability. While this process takes place it is important to ensure that beneficiaries receive the allowances on which they depend. Table 6 indicates urgent requirements for the most essential assistance categories over the next six months, assuming the government can meet 75% of its social welfare payment obligations.

A system to support childcare through allowances for maternity and school-going children is also in place. Child-care obligations were last paid for July 2000; arrears were converted into bonds, which are redeemable at six-month intervals beginning in January 2001. Allowances for families with school age children (700,000), based on average wage and number of children per family, make up over 80% of the US$18.7 million in total arrears and monthly obligation of US$4.8 million for child care allowances.

The Pension system in the Republic of Serbia is administered through three funds:

1. The Employment Fund has 1,260,333 pension beneficiaries on an average monthly pension of US$33. The total monthly obligation is therefore in the region of US$40.7 million. Payments are currently in arrears by 1 1/2 months amounting to US$76 million.
2. The Self-employment Fund has 39,314 pension beneficiaries on an average monthly pension of US$33, making a total monthly obligation of approximately US$1.3 million. Payments are delayed for 1 month.
3. The Farmers Fund currently has 209,022 beneficiaries on an average pension of US$8 making a total monthly obligation of around US$1.7 million. Payments are in arrears by over 24 months, amounting to US$39 million.

Total gross debt for the three pension funds is US$117 million. In addition, current monthly obligations amount to approximately US$43.7 million, or US$262.2 million over the next six months. With the exception of the Farmers Fund, the Government of Serbia has been able to keep payments close to schedule.

48,110 people are currently registered for unemployment benefit. The average monthly benefit is US$30, amounting to a monthly obligation of US$1.47 million. Payments are three months in arrears.

The total amounts needed and expected government payments to these funds are given in Table 6, along with the expected gaps that exist for payment of benefits during the next six months, assuming the government can meet 88% of pensions and 75% of payments for the other accounts.

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