What Help can the Low-Income Residents Expect from the State?

Date

2020 06 11

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Anyone can experience financial hardship throughout life: it can be caused by a pandemic, economic crisis, sudden loss of job, family crises, lack of social skills, or other misfortunes. 

There are several types of assistance to the residents in Lithuania which can be combined: support in municipalities, social insurance benefits paid by “Sodra” in the event of loss of employment as well as temporary support due to a pandemic.

Due to the coronavirus pandemic and the economic difficulties it has caused, the support granted in municipalities has been increased and the conditions for granting it have been facilitated, but most of the changes will be permanent. We invite you to find out what assistance residents can apply for if they lack income or lose their job.

What financial assistance are the low-income people entitled to? 

What financial assistance is available after the loss of employment? 

Cash Social Assistance

When a person faces financial difficulties, he/she can apply to local municipality for cash social assistance: social benefit, compensation of heating, hot and drinking water costs, and if the housing of a low-income person is renovated under a modernisation programme, credit and interest payments are also reimbursed. This assistance has been increased and the conditions for obtaining it have been facilitated during the quarantine and emergency situation, but most of the new provisions will remain in force.

SOCIAL BENEFIT

Who is entitled to it? From the 1st of June the benefit is available if the average monthly income per person does not exceed 137.5 euros. When calculating the average income, the child benefit and 20-40 percent of the salary (depending on the composition of the family and the number of children) are not included as well as 20-40 percent of unemployment or temporary jobseeker’s allowance paid to the unemployed are excluded. 

Estimated income will also exclude the one-off benefit of 200 euros which the elderly and people with disabilities will receive in August. These solutions aim to enable more people to receive support.

Another novelty that will expand the circle of people who can receive cash social assistance is that the applicant's property will not be valued for 6 months after the cancellation of emergency situation and quarantine. Until now, the procedure was that if a person has property in excess of a certain threshold, he/she might not be entitled to the assistance.

At the end of this half-year, a permanent provision will enter into force according to which the property will not be valued for 3 months for those people who apply for the social benefit for the first time or 2 years after receiving the last support. The aim is to help people facing financial challenges more quickly and effectively.

Of what size? Social benefits have increased from June. What benefit a person or family receives in each specific case depends on the income they receive, the composition of the family and the applied amount of state-subsidised income. Social benefits have been increasing since June. 

The amount of social benefits for single persons will change every six months: initially they will receive more, then less. This encourages the person to take the initiative in the long run and earn an income himself/herself. 

When there is more than one person living together, the amount of benefit will be the same for all months.

SOCIAL BENEFIT WHEN RETURNING TO EMPLOYMENT AFTER A SIGNIFICANT GAP 

Residents can receive social benefits even when they start working after a period of unemployment. Such a measure is used to encourage the beneficiaries to enter the labour market – salaries are often not very high when they start working, therefore, support is still needed.

In total, the benefit can be paid for 12 months after their return to employment, but it decreases over time: in the first 3 months it reaches 100% of the amount of social benefit paid during the last six months before employment, in 4-6 months – 80%, and in the remaining 6 months – 50% of the social benefit.

Prerequisites – the person must have been registered with the Employment Service for half a year before employment, he/she must be paid at least the minimum wage or the minimum hourly wage must be applied once he/she starts working, the person must have received social benefit for at least one month in the last three months before employment.

WHERE TO APPLY: to the local municipality or www.spis.lt.

VALIDITY: already in force. 

Compensation of heating, hot and drinking water costs 

When assessing whether a person or family is entitled to compensation of heating and water costs, the property owned was previously taken into account. However, for 6 months after the cancelation of the emergency situation and quarantine, the property will no longer be valued, and at the end of this period, if compensation is applied for for the first time (or after a 2-year gap), the property will not be valued for the first 3 months.

Compensation is also available to people in debt for heating and water; however, it is important that the agreement is concluded with the suppliers regarding the payment of part of the debt or that the court orders the debt to be paid.

COMPENSATION OF HEATING COSTS  

Such compensation can be obtained by calculating how much a family or person spends on heating per month. For example, if the income of a single person is 300 euros per month, he/she did not have to pay more than 17.5 euros for heating until now. Any costs in excess of this amount are reimbursed.

A larger part of heating costs will be compensated for a single person from June. From now on the same abovementioned person would not have to pay more than 11.25 euros – the remaining part of the costs is reimbursed. 

If the person's income is less than 187.5 euros, all actual costs for housing heating are reimbursed, provided that the housing is not very large or does not require a disproportionate amount of fuel for heating.

The following standards for the useful floor area of housing are used to calculate the compensation for housing heating:

  • 50 square meters if the person lives alone.
  • 38 square meters for the first cohabiting person.
  • 12 square meters for a second cohabiting person.
  • 10 square meters for a third and each subsequent cohabiting person.

For example, for a low-income family of 4, heating is compensated for a useful area of up to 70 square meters.

COMPENSATION OF DRINKING WATER COSTS  

These compensations can be obtained when the costs for cold water and wastewater exceed 2% of personal or family income. For example, a single person with a monthly income of 300 euros would have to pay a maximum of 6 euros for drinking water and the remaining amount should be reimbursed.

Of course, the amount of water consumed is also taken into account; it should be, depending on the number of cohabitants and the way the hot water is prepared, as follows: 

When district heating is used to prepare hot water: 

  • 2 cubic meters for the first cohabiting person or a single person per month.
  • 1.5 cubic meters for a second cohabiting person per month. 
  • 1 cubic meter for a third and each subsequent cohabiting person per month. 

When other forms of energy or fuel, such as electricity, firewood, are used to prepare hot water:

  • 3.5 cubic meters for the first cohabiting person or a single person per month. 
  • 2.5 cubic meters for a second cohabiting person per month.
  • 1.5 cubic meters for a third and each subsequent cohabiting person per month.

If there are 6 people living together and district heating is used to prepare the water, they will be compensated for 7.5 cubic meters of drinking water.

COMPENSATION OF HOT WATER COSTS  

These compensations can be obtained when the costs for hot water and its preparation exceed 5% of personal or family income. In the case of a person receiving an income of 300 euros, costs in excess of 15 euros would be reimbursed.

Compensation for:

  • 1.5 cubic meters for the first cohabiting person or a single person per month.
  • 1 cubic meter for a second cohabiting person per month.
  • 0.5 cubic meters for a third and each subsequent cohabiting person per month.

STATE SUPPORT IN CASE THE HOUSING IS RENOVATED  

If a multi-apartment house is renovated or is being renovated according to a multi-apartment house renovation (modernisation) project, and there are people living in it that are entitled to receive compensation for heating, the owner of the housing is paid credit and interest payments.

WHERE TO APPLY: to the local municipality or www.spis.lt.

VALIDITY: already in force.

Support for housing rental

SOCIAL HOUSING

Until now, the law has not stipulated how long a low-income person or family can wait in line for social housing. This situation does not encourage municipalities to increase the amount of social housing, and people have been waiting for years. About 15.6 percent of persons or families have been waiting for the rent of social housing for more than 5 years, and the average period is 7.7 years.

In order for the social housing to be rent to people faster, specific waiting terms are introduced: from 2024 – up to 5 years, from 2026 – up to 3 years. Municipalities must already take measures and ensure that the waiting period is reduced in line with the new requirements when developing the social housing fund.

If the municipality does not provide social housing after the deadline, then it will be obliged to compensate the part of the rent of the housing where the family lives while waiting for social housing. True, the compensation will be paid for up to 14 square meters of useful floor area per person.

The family will not receive rent compensation in case they have expressed specific requirements when applying for social housing, which may take some time; for example, the family is applying for housing in a specific location of the municipality or on a specific floor of a house.

COMPENSATION OF HOUSING RENT COSTS 

Low-income people also have the opportunity to receive compensation to cover part of the costs for the usual rent or lease of suitable housing. Until now, determining the amount of compensation depended directly on the value of real estate in that area. Sometimes, especially when a person lives alone, this amount is very small. One of the smallest, for example, is in Akmenė district – barely EUR 3.84.

From the 1st of July, when calculating these compensations, the coefficient will be determined on the basis of average housing rental market prices and will be differentiated according to the number of family members. In addition, the minimum basic amount of compensation for the part of housing or the lease payment is set – from 23 to 32 euros per month, when the useful area of the housing per person is 10–14 square meters. 

For persons left without parental care, such as the disabled, who have left a social care home, a group life home or an independent life home (if they do not have other housing in Lithuania), social housing will be provided without following the order of priority.

WHERE TO APPLY: to the local municipality.

VALIDITY: most changes – from July.

Child Benefit

Child benefit is a universal benefit paid to each child. Its size in 2020 is 60 euros. An additional benefit of 40 euros may be paid for children with disabilities and children from low-income or large families.

A low-income family is considered to be one in which the average monthly income per family member does not exceed 250 euros, excluding the child benefit and part of the salary. Until now, when estimating family income for higher child benefit, the amount received during the last 12 months has been taken into account.

However, since the financial situation of some families deteriorated rapidly during the quarantine period, it has been decided that until the 1st of July the income received from the 1st of April will be assessed, and from July the income of the previous 3 months will be assessed and the child benefit will be granted for three months.

This means that if a family applies for an additional child benefit in July, their income in April, May and June is assessed. The income of these months will already reflect the financial challenges the family faced during the quarantine.

Such facilitation will be valid for a further period of 6 months after the cancelation of the emergency situation and quarantine. Around 33 thousand children should receive additional higher child benefits.

WHERE TO APPLY: to the local municipality or www.spis.lt.

VALIDITY: change are already in force.

In case of Loss of Employment 

In case of loss of employment and in order not lose income completely, it is suggested to apply to the Employment Service. By registering with the Employment Service, it is easier to look for another job, the unemployed who have accumulated the required social insurance seniority can receive unemployment social insurance benefit, and if they have not accumulated, they will be able to receive jobseeker’s allowance temporarily. Unemployed people registered with the Employment Service are covered by compulsory health insurance, so they can use treatment services in health care institutions free of charge.

UNEMPLOYMENT SOCIAL INSURANCE BENEFIT. 

This benefit is available in case the person has at least 12 months of unemployment social insurance in the last 30 months before registering with the Employment Service. Unemployment social insurance contributions are paid by the employer when a person is employed, and some self-employed persons (owners of individual enterprises, members of small partnerships and full members of partnerships) pay them themselves.

If unemployment benefit is due, it is paid for 9 months. The benefit consists of two parts – fixed and variable: the fixed part in 2020 is 141.25 euros, and the variable depends on the previous salary. The benefit is higher in the first months, and then it gradually decreases.

The variable part of the unemployment benefit:  

  • In 1-3 months – 38.79 percent of average insured income of a person (all income from which state social insurance contributions have been paid)
  • In 4-6 months –  31.03 percent of average insured income of a person
  • In 7-9 months –  23.27 percent of average insured income of a person

Unemployment benefits are paid for the previous month from the 20th day of the month to the end of the month.

WHERE TO APPLY: to the Employment Service.

VALIDITY: no changes made, can be applied for at any time. 

LONG-TERM EMPLOYMENT BENEFIT  

An employee who has worked for one employer for more than 5 years and who is dismissed at the initiative of the employer without the employee's own fault is also entitled to a long-term employment benefit. 

The long-term employment benefit depends on the length of time the employee has worked continuously for the employer:

  • 5-10 years – a benefit of 77.58 percent of the average monthly salary.  
  • 10-20 years – a benefit of 77.58 percent of two average monthly salaries. 
  • More than 20 years – a benefit of 77.58 percent of three average monthly salaries.

It is paid if the former employee does not get re-employed by the same employer within three months and applies for it no later than within six months after the dismissal. 

When an employee works in a budgetary institution or the Bank of Lithuania, long-term employment benefits are paid by the employer who dismissed them, in all other cases the benefit is paid from the Long-Term Employment Benefit Fund.

Long-term unemployment benefit is paid approximately three and a half months after dismissal.

WHERE TO APPLY: to “Sodra”.

VALIDITY: no changes made, can be applied for at any time.

JOBSEEKER’S ALLOWANCE 

In order to ensure that no unemployed person is left without income at the end of the quarantine, a new benefit will soon appear – a temporary jobseeker’s allowance. 

It is available to people who have unemployment status in the Employment Service and do not participate in active labour market policy measures, such as supported vocational training.

The jobseeker’s allowance can be in two amounts: 200 euros and 42 euros. For those who do not qualify for the standard unemployment social insurance benefit or whose payment period has already expired, the jobseeker’s allowance will amount to 200 euros. For those who receive the standard unemployment benefit, the additional jobseeker’s allowance will be 42 euros.

This allowance will be available as soon as the President signs the amendments to the Law on Employment. It will be paid for 6 months, but no longer than the end of this year.

WHERE TO APPLY: to the Employment Service.

VALIDITY: the following day after the President signs (already adopted at the Seimas).