2021-12-16
National Audit Office: at-risk-of-poverty rate in Lithuania remains one of the highest in Europe
Appropriations for social protection are increasing, but their ratio to GDP changes very moderately and falls behind the European Union average. The at-risk-of-poverty rate in Lithuania is still one of the highest in the EU and the impact of social benefits on the at-risk-of-poverty rate has slightly decreased, as shown by the assessment of progress in poverty reduction carried out by the National Audit Office. One of its objectives is to assess progress in implementing the recommendations of the previous audit carried out by the National Audit Office in 2019.
“In Lithuania, one in five people live below the at-risk-of-poverty threshold, and according to data from last year, about 140 thousand people lived below the absolute poverty line. While benefits have recently been increasing, their ratio to GDP is limited as the economy improves. This means that the benefits are used to maintain a constant at-risk-of-poverty rate," says Akvilė Kernagė, Principle Public Auditor-Team Leader of the Performance Audit Department 2 of the National Audit Office.
Social protection expenditure on benefits amounted to around EUR 8.9 billion last year, while the impact of social benefits on the at-risk-of-poverty rate decreased slightly between 2019 and 2020. This means that without social benefits, Lithuania’s at-risk-of-poverty rate would be 9.5 percentage points higher in 2019 and 8.7 percentage points higher in 2020.
In September 2021, the municipal social assistance effectiveness monitoring system was launched. Its indicators show that the effectiveness of municipal social assistance is average, reaching 5 out of 10 points between 2017 and 2020. This index consists of 35 indicators covering the areas of poverty reduction (4), aid (21) and prevention (10). Municipalities in large cities have a better situation in terms of poverty reduction whereas indicators of social services are worse. The at-risk-of-poverty rate in municipalities ranges from 13.5 % to 38.5 %, and the ratio of social benefits to people living in poverty ranges from 1 % to 25 %. Differences in indicators between municipalities signal that the Ministry and municipalities should focus on analysing the practices of municipalities that achieve better indicators, disseminating them and adapting them to other municipalities.
In 2018-2019, the National Audit Office carried out an audit on “Does social assistance ensure the minimum consumption needs of people living in poverty and promote labour market integration”. Seven recommendations were issued for the Ministry of Social Security and Labour. Attention is paid to their implementation, however two important recommendations on the development of e-services and the integrated social support have not yet been implemented. Integrated implementation of all the recommendations made would have the greatest expected impact.
In order to reduce the at-risk-of-poverty rate of the most vulnerable groups, the Ministry of Social Security and Labour is taking measures to increase and facilitate access to social benefits (old-age pensioners, persons with disabilities, families with children, single persons, unemployed people). These decisions are expected to have a positive impact on future poverty indicators.