Verification of social welfare payments

Social welfare must only be provided to those who really need it. To prevent fraud and excessive spending, the Ministry of Finance continues the verification of the welfare payments.

In October 2017, subsidies for housing utilities were transferred to 6 million households (40.3% of the households in Ukraine).

According to the Law of Ukraine “On the State Budget of Ukraine for 2017”, the subsidy to the local budgets allotted for the transfer to households to pay for housing utilities amounts 68.8 billion hryvnas.

The goal of the verification of the subsidies for housing utilities is to detect illicitly granted housing subsidies, especially to citizens who have purchased long-use goods which cost more than 50,000 hryvnas including vehicles, apartments, land plots etc. as well as to citizens who receive more than one subsidy.

The verification process also makes it possible to detect so-called “fake recipients”.

The Ministry of Finance is keen to ensure social welfare payments to the groups of citizens who really need it. Also, it is struggling to make the system of subsidies more effective, fair and efficient.

It is very important for the government that citizens can pass all required subsidy formalities without long waiting lines and bureaucratic hurdles. That is why a citizen applying for the subsidy only has to present an application and his/her income declaration.

However, this simplified procedure has one weak point, which are the illicit actions of citizens themselves.

Hence, verifying subsidies, the Ministry of Finance detects persons who do not declare the purchase of a vehicle in their income declarations or buy luxury goods like fur garments, jewelry, paintings etc. while receiving subsidies.

What are the results of the housing subsidies verification in 2017?

Based on the verification conducted by the Ministry of Finance in the period from January till November 2017, recommendations were sent to the regional state administrations as well as to the state city administration of Kyiv regarding illicitly granted housing subsidies and additional eligibility checks for individuals who:
8,043 – purchased long-use consumer goods costing more than 50,000 hryvnas;
3,538 – deceased;
20,519 – purchased immovable property, land plots, goods (services) costing more than 50,000 hryvnas;
10,792 – purchased vehicles costing more than 50,000 hryvnas;
12,677 – receive more than one subsidy.

Also, the Ministry of Finance send recommendations containing 7,749,962 records regarding the additional check of data containing irregularities, including recommendations on the rectification if irregularities in automated information and enquiry systems, registers, other databases and information sources.

Based on the verification of the housing subsidies, entities managing public funds confirmed violations amounting 3.1 million hryvnas for the first 10 months of the current year.

Also, it must be noted that the quality and speed of the processing of the above recommendations by the state regional administrations remain low.

Improvement of the verification process

The Ministry of Finance permanently improves the verification process and the quality of its recommendations.

In 2017, the Ministry of Finance prepared the draft Law of Ukraine “On the Verification and Monitoring of State Subsidies”, regulations on automated information exchange between verification participants as well as almost finalized the build-up of the information and analytical platform for electronic verification and monitoring.

Also, the Ministry of Finance has prepared a methodology and algorithms for the verification of housing subsidies to make the verification process more adequate and clear.

The analysis of data based on the verification results makes it possible to improve the regulations on state subsidies.

Why is it important to verify the housing subsidies?

- higher spending effectiveness in regard to the subsidies for citizens;
- reduced space for corruption and manipulation in the social welfare system;
- more justice in the social policy – help is only provided to those who really need it;
- budget savings which can be used to help those who really need it.

What are the plans for 2018?

For 2018, the Ministry of Finance plans to implement the monitoring of the use of social exemptions and housing subsidies as well as the actual consumption of electricity and housing utilities.

Presently, Ukraine has no system to collect and analyze data about the actual electricity consumption as well as the use of housing utilities by households. Due to this, it is impossible to examine the set consumption norm properly as well as the necessary sum of subsidies during the preparation of the state budget for the respective year.

On the one hand, the Ministry of Finance intends to verify the data about the services actually delivered to subsidy recipients (electricity supply, gas, cold water, sewage water disposal, maintenance of houses and adjacent land plots, heating, hot water supply, disposal of solid and liquid household waste); on the other hand, it plans to examine data received from the responsible units for social welfare regarding the funds allotted for social exemptions and housing subsidies in the respective heating season.

Verification and monitoring results shall be used for:
- financial settlements with service providers;
- planning of the state budget expenses;
- redistribution of subsidies from the state budget to local budgets for the execution of social welfare programs;
- review of the social norms for the consumption of electricity and housing services;
- recommendations on illicitly granted housing subsidies;
- recommendations for the correction of irregularities in registers and databases.

To implement the above monitoring, the Ministry of Finance has prepared the draft decree of the Cabinet of Ministers “On the Implementation of Monitoring for the Allotment of Exemptions and Housing Subsidies and the Actual Consumption of Electricity and Housing Services” and is now negotiating it with all relevant bodies.

You can mark the parts of text you like, which will be available at the link in the address bar of your browser

You can mark the parts of text you like, which will be available at the link in the address bar of your browser