TIRANA, Dec. 11 – Albania’s Supreme State Audit has urged government authorities to immediately consider a long-awaited subsistence level calculation on households’ basic needs in order to efficiently fight poverty reduction in the country.
In a report examining poverty in Albania and the government’s role in its reduction, state auditors say the current points-based electronic system that the country is applying on social assistance is not enough to meet poor households’ basic needs.
“Albania has no subsistence level or poverty line adopted by the government on which social assistance policies and studies can rely on. The current social assistance system as an instrument of the Ministry of Health and Social Protection and subordinate social care institutions is not efficient in poverty reduction when considering the number of households getting out of the scheme because of employment or improvement in social and economic conditions,” says the Supreme State Audit.
An average Albanian family of four gets modest monthly assistance of an average of 5,247 lek (€42), a small amount in a country where the minimum wage is at 24,000 lek (€191).
Back in 2016, a study backed by the Ombudsman’s office calculated Albania’s subsistence level at 16,000 lek (€128) a month, an amount unveiling that current minimum wages, social assistance, unemployment benefits and pensions are too low for hundreds of thousands of workers and pensioners.
Calculations by the Albanian Center for Economic Research showed the subsistence level in 2015 was at 16,000 lek a month per person, of which 7,100 lek (€57) on food expenditure and 8,900 lek(€71) in non-food spending. If adjusted for inflation, the subsistence level would be at least 5 percent higher at the end of 2018 considering the country’s cumulative hike in consumer prices since 2016.
Quite expectedly, the Ombudsman’s supported study was never taken into consideration and no initiative taken for an official calculation of the subsistence level on meeting basic needs that is apparently unaffordable by Albania’s state budget, already facing a huge gap in the pension system due to the low number of contributors to the scheme.
The Supreme State Audit says the inefficiency of the electronic system is related to a unified application of a point-based formula that has not been assessed based on coherent needs of the households in need.
“The amount determined by the social assistance scheme does not reflect the real and current needs of individuals and households, as long as there is no official updated amount of the subsistence level in the country,” says the Supreme State Audit.
Poverty line in Macedonia, Albania’s eastern neighbor with a similar development level was estimated at €112 per capita a month in 2016 and at €128 a month for Serbia, the region’s largest economy, the Supreme State Audit says referring to data by Eurostat, the EU’s statistical office.
“The government support through the social assistance program would be more efficient if contribution was assessed in parallel with the overall price level, the consumer basket and dynamic studies on households’ reintegration into society,” it adds.
An average Albanian household of 3.7 persons spent a total of 73,400 lek (€590) a month in 2017, with the per capita spending at 19,660 lek (€155) and almost half of the monthly budget still going on food items, according to a recent survey conducted by INSTAT, the state-run statistical office.
The World Bank expects Albania’s poverty rate measured at US$5.5/day in purchasing power parity to drop to about a quarter of population by 2020, down from about 28 percent, but yet remain one of the highest in the region.
Thousands cut off
Thousands of Albanian households nationwide have had their social assistance cut off in the past three years as part of a reform removing abusers from the scheme and offering vocational education training to beneficiaries no longer qualifying for assistance to prepare them for labor market needs.
Data published by Albania’s state-run statistical institute, INSTAT, shows Albania had had some 53,000 households benefiting social assistance in mid-2018, around 31,000 fewer compared to mid-2015 when Albania was piloting the current system in the country’s three largest regions.
The sharpest cut in the number of beneficiary households was registered in early 2018 after a new scoring formula identifying the poorest households and removing abusers was applied nationwide, cutting off some 26,000 former beneficiaries from the social assistance system.
While the reform has identified people already employed and owning cars as abusively receiving social assistance, there have also been cases when households were punished and stripped of their assistance following inspections because of failing to declare their home appliances in their application forms.
Low income and poor social protection is one of the main reasons for Albania’s massive migration during the past quarter of a century.
