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INCOME

Spain’s basic income scheme hits backlog dead-end

Three months after Spain rushed to launch a minimum basic income scheme to fight a spike in poverty due to the coronavirus pandemic, the programme is at a dead-end because of an avalanche of applications.

Spain's basic income scheme hits backlog dead-end
Red Cross volunteers bring food packages to elderly and low income people. Photo: Cesar Manso/AFP
The measure was a pledge made by Prime Minister Pedro Sanchez's leftwing coalition government, which took office in January, bringing together his Socialist party with far-left Podemos as the junior partner.
   
The scheme — approved in late May — aims to guarantee an income of 462 euros ($546) per month for an adult living alone, while for families, there would be an additional 139 euros per person, whether adult or child, up to a monthly maximum of 1,015 euros per home. It is expected to cost state coffers three billion euros ($3.5 billion) a year.
   
The government decided to bring forward the launch of the programme because of the Covid-19 pandemic, which has hit Spain hard and devastated its economy, causing queues at food banks to swell.
   
Of the 750,000 applications which were filed since June 15 when the government started accepting requests, 143,000 — or 19 percent — have been analysed and 80,000 were approved, according to a social security statement issued on August 20.
 
 
'Months of waiting'
 
But Spain main civil servant's union, CSIF, paints a darker picture. “Nearly 99 percent of requests have not been processed,” a union spokesman, Jose Manuel Molina, told AFP.
   
The social security ministry has only really analysed 6,000 applications while 74,000 households that already receive financial aid were awarded the basic income automatically, he added.
   
For hundreds of thousands of other households, the wait is stressful. Marta Sanchez, a 42-year-old mother of two from the southern city of Seville, said she applied for the scheme on June 26 but has heard nothing since.
   
“That is two months of waiting already, when in theory this was a measure that was taken so no one ends up in the streets,” she added.
   
Sanchez lost her call centre job during Spain's virus lockdown while her husband lost his job as a driver. The couple has had to turn to the Red Cross for the first time for food.
   
“Thank God my mother and sister pay our water and electricity bills,” she said, adding their landlord, a relative, has turned a blind eye to the unpaid rent.
 
 
'Rushed everything'
 
A spokeswoman for the ministry acknowledged that the rhythm “was perhaps a bit slower than expected” but she said the government was working to “automate many procedures” so processing times should become faster from now on.
   
“The launch of a benefit is always difficult … and this situation is not an exception,” she added.
   
But Molina said this was a new situation, that was made worse by years of budget cuts to the public service which has lost 25 percent of its staff over the past decade.
   
“The problem is that they rushed everything, did it without training and a huge lack of staff,” he added.
   
The social security branch charged with the basic income scheme has only 1,500 civil servants, who also process most pension applications, Molina said.
   
These officials are facing an “avalanche” of requests, which already match the number of pension requests received in an entire year, he added.
   
About 500 temporary workers have been recruited as reinforcements but their assistance is limited because they do not have the status of civil servant, so they cannot officially approve requests for financial aid.
   
Demand is expected to increase. The government has said the measure was expected to benefit some 850,000 homes, affecting a total of 2.3 million people — 30 percent of whom were minors.
   
When the scheme was launched the government said all it would take is a simple online form, but this is a problem for many low-income families without computers and internet access, especially since the waiting time for an in-person meeting to apply is about two months, according to the CSIF union

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EMPLOYMENT

Almost one in ten live in poverty in Switzerland: Report

More than eight percent of Switzerland’s population live in poverty, while 12 percent struggle to make ends meet.

Almost one in ten live in poverty in Switzerland: Report
A number if people in Switzerland can't make the ends meet. Photo by Depositphotos

A study released by the Federal Statistical Office (FSO) on Thursday shows that 8.7 percent of Switzerland’s public – around 735,000 people – live in poverty, which is defined at 2,279 francs per month on average for a single person, and 3,976 francs per month for two adults and two children.

When adjusted for purchasing power, this threshold is the second-highest in Europe, topped only by Luxembourg.

 

The numbers are for 2019, so the impact of the Covid-19 pandemic is not yet included in the data.

The poverty rate in Switzerland is the highest it has been since 2014, the study found. 

Most financial difficulties were experienced by foreign nationals, people living in single-parent households, people without training, and those living in households impacted by unemployment, FSO reports.

Here are some of the study’s other findings:

  • For the 10 percent of the population with the lowest wages, this income was less than 25,868 francs in 2019. The median income has remained stable at around 50,000 francs. 
  • The poverty rate for the employed labour force was 4.2 percent in 2019. About 155,000 people were living below the poverty line, even though they were in paid work.
  • Just over 12.2 of the population said they had difficulty making ends meet, and 20.7 percent were unable pay an unforeseen expense of 2,500 francs in the space of a month . Of these, 15.1 percent had at least one payment arrears.

READ MORE: Switzerland’s economy forecast to recover 'from summer onwards' 

On the positive side, the country’s general standard of living remains among the highest in Europe.

It is estimated on the basis of the median disposable income, after adjusting for differences in price levels in various countries. 

In Switzerland, this income was 2.8 times higher than in Greece, 1.6 times higher than in Italy, 1.3 times higher than in France, and 1.2 times higher than in Germany and in Austria.

Despite the high price level in Switzerland, the standard of living was higher in Switzerland than in most of the EU countries.


 

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