Social assistance to able to work unemployed based on their participation in public works

The provision of social assistance to unemployed recipients who are able and willing to work based on their involvement in public (socially significant) works is a common mechanism used in various countries around the world. Usually, this practice is intended to stimulate unemployed social assistance beneficiaries to stay active or return to the labor market.rnThe aim of the proposals being developed within the fifth pilot project for Ukraine is slightly wider. The proposals encompass the improvement of social assistance targeting, the promotion of social assistance beneficiaries’ entry/return to the labor market, and the reduction of fraud in the social assistance system, particularly fraud committed by persons engaged in the informal sector and not declaring their income. The demand for public works engagement is based on several factors.rnOn the one hand, social assistance beneficiaries often stop trying to improve their financial status by searching for employment / higher paid employment and choose to rely on state support instead. They may leave the labor market for a long time while receiving assistance and it can be difficult for them to reintegrate into the labor market later.rnOn the other hand, some social assistance recipients may be informally employed and not declare their income in order to stay eligible or/and to get larger amounts of social assistance. Thus, public funds are wasted on support for persons who are not needy.rnTo achieve the goals set, we propose to provide social assistance to the following categories of claimants (or their relatives that meet the criteria listed) based on their involvement in public (socially significant) works:rn• Those who are willing and able to work who are not employed / not studying and not registered at the employment centerrn• Unemployed persons who are registered in the employment center, but do not receive unemployment benefitsrn• Those employed in the formal or informal sectors whose average monthly income is below minimum wage.rnIn our proposal, we review a list of options of involvement of the categories listed in public (socially significant) works. Options vary according to the following criteria: (1) voluntary vs. mandatory participation in public (socially significant) works, (2) unpaid vs. paid participation in public (socially significant) works, (3) differentiated vs. not differentiated amount of social assistance, depending on participation in public (socially significant) works.rnThe options considered will lead to achieving the goals in different ways. We believe that the obligatory involvement of the specified categories of claimants would be more effective than the voluntary option. Besides, obligatory participation can be referred not only to those applying for benefits from low-income families, but also to those claiming for other benefits, in particular, housing subsidies or means-tested benefits to families with children. At the same time, the mechanism based on unpaid public (socially significant) works participation is likely to function more effectively compared to the mechanism involving paid participation due to a possible lack of customer funding for public works.