News

10 November 2022

Ombudsman Diana Kovacheva sent an opinion to the committees in the National Assembly on the Bill submitted by the Council of Ministers for the continuation of the validity of the provisions of the 2022 State Budget of the Republic of Bulgaria Act, the 2022 Budget of the State Public Insurance Act and the 2022 Budget of the National Health Insurance Fund Act.

          The opinion of the Ombudsman is based on complaints and problems stated by citizens to the institution.

“Since the most important aspect of the budget is the social one, especially in a situation of ever-increasing inflation, first of all I draw the attention to the rights of pensioners as one of the most vulnerable groups of citizens, as well as to other social payments”, writes the Ombudsman.

Diana Kovacheva highlights that older people face serious problems mainly because of the amount of recalculation and updating of their pensions.

She emphasizes the discrepancy between citizens’ expectations for the improvement of their lives and the real recalculation of their pensions from October 1, 2022. She indicates that the complaints to the Ombudsman are mainly related to the coefficient, which varies from 1 to 1.35, and by which pensions were recalculated. This has led to a situation where, as of 1 October, all pensions from employment have been recalculated, but only about a third of pensioners in our country have actually received a higher amount of personal pensions.

“In support of the demand for a dignified life of one of the most significantly affected groups of the Bulgarian society — the pensioners — I believe that the only way to do this, without inflicting harm in a future recalculation, is for the pensions from employment granted until December 31, 2020 to be recalculated from January 1, 2023, with the individual coefficient of each person multiplied by the average monthly insurance income for the country for 2021, after which the amount of the pension is to be determined under the conditions and according to the procedure of Articles 70, 75 и 79 of the Social Insurance Code,” states Diana Kovacheva categorically.

She also emphasizes that in the absence of an effective budget, there is no real possibility of adequately allocating the necessary resources to improve the lives of vulnerable groups in society, at a time of ever-increasing inflation, which affects not only pensioners but all those working in the private and public sectors.

In her opinion, the Ombudsman lists several objectives that will not be achieved by the proposal to extend the validity of provisions of the three budget acts.

She indicates that after the increase of the poverty line in Bulgaria to BGN 504 from January 1, 2023, a huge part of pensioners will receive pensions below this line.

She also emphasizes that with this budget it will not be possible to offer an option for inflation-adjusted update of pensions under Article 100 of the Social Insurance Code from July 1, 2023, and that it will not be possible to recalculate pensions so that no pensioner remains with an income below the poverty line.

“For another year, the problem of applying Article 102, para. 2 of the Social Insurance Code will not be addressed. This means that in 2023, the official recalculation of pensions will be made from the first day of April, and not from the beginning of the year, and therefore pensioners will not receive an increase in their pensions for four months of the year. The increase will be only for the period from May to December of the respective year”, the public defender writes.

She points out to the fact that it will not be possible to update the daily minimum and maximum amount of the unemployment benefit. The issues of monetary compensation for raising a child up to 2 years of age and a child up to 8 years of age from the father (adoptive parent), as well as the average monthly income and the amounts of monthly and one-off benefits under the Family Benefits for Children Act, also remain unupdated. She also indicates that there is no provision for an increase in other statutory payments.

With regard to the 2022 Budget of the National Health Insurance Fund, the Ombudsman expresses concern that the practice of limiting the activity of medical facilities is being maintained, with the consequent violation of patient rights to timely access to specialists and medical-diagnostic activities, as well as the impossibility of increasing the level of payment by NHIF and payment for new activities, medicinal products, medical devices and dietary foods for special medical purposes.

Prof. Kovacheva emphasizes that in times of growing inflation, actions are needed to adopt budgets that allow people to cover their needs and obligations to the state.

“In order to guarantee the right of people with permanent disabilities to fair monthly financial support, I would like again to draw attention to the unfair grouping of those entitled to financial support under Article 70 of the Persons with Disabilities Act (PDA). I believe it is necessary to take actions for amending and supplementing Article 70, item 5 of PDA, adding to those receiving a social disability pension the people with a military disability pension or an inheritance pension as also being entitled to external aid”, the public defender emphasizes.

Diana Kovacheva also points out that people with over 90 per cent disability, with certain percentage of external aid, who receive a pension for military disability, are omitted from the explicit listing in Article 70, items 4 and 5. She highlights that they are included in item 3 and receive only 25% of the poverty line (the general group).

“This concerns around 160 military disabled people who receive a military disability pension close to the amount of the social disability pension and who have been suffering from disvantages from the failure to pay them over BGN 130 on a monthly basis. Until 2006, military service was mandatory for all conscripts, and only exceptionally, due to certain health problems, young Bulgarian men were released from military service”, writes the Ombudsman.

Prof. Kovacheva adds in her opinion that the same applies to people with disabilities who have a social disability pension, but due to the death of a parent they receive an inheritance pension instead and are omitted from the explicit listing in Article 70, items 4 and 5.

“The Social Insurance Code provides for the possibility of choosing the more favourable option of a pension, which disabled people have exercised and have chosen an inheritance pension instead of a social pension for disability (although the difference is insignificant –  a few BGN per month). However, the CIC does not provide for an opportunity to opt out of the more favourable pension and return to the old pension. For this reason, disabled people who receive a military disability pension or inheritance pension fall into the general group of disabled people with over 90 per cent disability and receive financial support in a lower amount (Article 70, item 3)”, also writes Diana Kovacheva.

She expresses confidence that, in addition to the specific proposals made, mechanisms will also be discussed to introduce a fair amount of monthly financial support for people with disabilities entitled to external aid and who receive a pension for length of service and age.

“It is good to consider supporting disabled people with a certain degree of disability from 71 to 90 per cent, who simultaneously receive monthly supplements for social integration under the repealed Integration of People with Disabilities Act (IPDA) and the so-called “quarter” of the social pension for disability. The determined monthly financial support in the amount of 15 per cent of the poverty line does not allow for an increase in the support granted to them until December 31, 2018”, the public defender points out.

Diana Kovacheva also reminds that no mechanism has been introduced to update the tax reliefs for people with disabilities under Article 18 of the Personal Income Tax Act, the amount of which has not been changed since 2008. She points out to the fact that she has already sent a specific legislative proposal to the Budget and Finance Committee of the Parliament on that issue.

Another problem that Kovacheva brings to the attention of the MPs is the amount of the maintenance payment made by the state when a convicted parent does not fulfill his obligation.

“Increasingly, the Ombudsman is approached by parents who raise their children without the financial support of the other parent, despite the fact that the latter has been sentenced by an effective court decision to pay a certain monthly maintenance amount in favour of his child. Pursuant to Article 65 of the 2022 State Budget of the Republic of Bulgaria Act, the maximum amount of the maintenance amount determined, which is paid by the state, is BGN 90. Citizens point out that the specified amount is extremely insufficient to ensure that the child’s basic needs and normal life, which needs to be guaranteed to every child”, writes Diana Kovacheva.

She notes that a provision has been adopted to protect the rights of children who do not receive maintenance from a parent – Article 152, para. 1 of the Family Code (FC). According to this norm, the state pays the maintence determined on behalf of the defaulting debtor in an amount ordered in a court decision, but not more than the maximum amount determined annually by the State Budget of the Republic of Bulgaria Act. The amount so determined is significantly lower than the minimum amount of the maintenance payment set out in Article 142, para. 2 of the Family Code, which provides that the minimum maintenance for a child is one-fourth of the amount of the minimum wage, which is currently BGN 710.

“Even with the latest increase of the amount by BGN 90, it is extremely insufficient and does not correspond to the provisions of the FC and the idea that the legislator has put in place to protect the best interests of the child. The Constitution of the Republic of Bulgaria explicitly states that children are under the protection of the state and society (Article 14), which means that the state and society owes a duty to protect the rights of children, especially those who are in a vulnerable situation. The best interests of the child under Article 3, § 1 of the Convention on the Rights of the Child are a primary consideration in all actions concerning children, and Article 27 obligates the States Parties to the Convention to recognise the right of every child to a standard of living adequate for the child’s physical, mental, spiritual, moral and social development”,  concludes the Ombudsman.