Supporting families in times of crisis: the case for universal child benefits
COVID-19 has exposed weaknesses in the Region’s social protection systems; countries should consider making Universal Child Benefits a key part of their recovery plans
The COVID-19 pandemic is a crisis the likes of which the world has not seen in over 100 years.
What started out as a global health emergency has transformed into an economic and social calamity. Lockdown measures necessary to contain the virus have had devasting impacts on economies and households – GDP growth has stalled or contracted, and millions have lost jobs and livelihoods. Families are increasingly at risk of poverty and exclusion in the face of rising unemployment and reduced incomes.
In the Europe and Central Asia Region, analysis by UNICEF and Save the Children estimates that the number of children living in poverty could increase by as much as 44 percent. The pandemic, much like the global financial crisis of 2008/09, threatens to reverse important strides made in tackling poverty and social exclusion. And the effects of this pandemic will be compounded by other actual and potential emergencies including earthquakes, floods, armed conflict and the refugee and migrant crisis.
With some form of containment measures expected to remain in effect until a vaccine is available, a large number of households will continue to need support. However, social protection systems in the region, which should play an important role in reducing child poverty by protecting against shocks and building resilience, fail to provide an adequate defense against risks. Reforms in the 1990s created systems characterized by stringent eligibility criteria which limited benefits to those living in intense poverty. Besides the narrow criteria, a host of other barriers prevent families from receiving benefits – among them stigma, low awareness of benefits, and onerous application procedures. Reforms have also made benefit levels so low that they do not have a sustainable impact on reducing poverty. These reforms happened alongside a rise in informal employment further disconnecting families from the social protection systems: Only those formally employed have access to social security including unemployment and sickness insurance. The crisis has revealed the mismatch between the needs of societies and the design of the systems. These factors together prevent social protection from acting as a stabilizer and protecting societies from the worse effects of crisis. Simply put, social protection floors largely do not exist, leaving many without access to much needed income support programmes. Families are falling through the cracks and being left behind.
The pandemic could increase child poverty rate in the region by as much as 44%
In response to COVID-19, governments across the Region have announced measures to extend social protection benefits to those not covered and to boost existing benefits with supplementary measures. These measures are intended to be temporary and provide some modest financial support to families allowing them to weather the crisis. However, with the fallout from the pandemic potentially lasting many years, what is needed are structural reforms to the social protection system itself and to make poverty reduction among children and families a policy priority.
A number of factors call for an explicit focus on creating programmes in the region that put children at the centre. Households with children have the highest risk of poverty, child poverty rates are higher than that of adults, high institutionalization rates due to poverty and children are more susceptible to the ill effects of poverty.
Systems that are effective at reducing poverty and vulnerability and building resilience are those with good coverage, predictable and sufficient transfer amounts, and which are accessible and easy to administer. Universal child benefits (UCB), which provide an unconditional, regular transfer to every family with children, should be part of the basket of options available for countries as they consider both the immediate response and longer-term system reforms. Universal child benefits have the potential to help children escape poverty, and have better outcomes and more opportunities thus breaking the cycle of poverty and social exclusion. It is critical that the post-crisis policies and programmes close the gaps in the current systems and support all families to reduce vulnerabilities, build resilience and mitigate the impacts of future crises. Universal child benefits should seriously be considered as a key policy instrument to support children and families.
A cornerstone of many family benefit packages in Western European countries, UCB can take different forms. They can cover all children under the age of 18 or a smaller age range (such as all children under the age of 3); they can screen out higher-income families; they can provide additional benefits to more vulnerable families; they can be a mix of contributory and non-contributory programmes. The design of a UCB will depend on a country’s specific social needs, political economy, institutional capacities, legal frameworks and fiscal space. UCB can form one of the pillars of social protection floors to protect against lifecycle risks, in line with the International Labour Organization’s Social Protection Floors Recommendation, 2012 (No. 202).
Universal child benefits have the potential to help children escape poverty, have better outcomes and more opportunities thus breaking the cycle of poverty and social exclusion.
Yet, in the Europe and Central Asia Region, only four countries – Belarus, Romania, Turkmenistan and Ukraine – provide a form of a UCB. Efforts to introduce UCB in the region have been met with opposition mainly due to the costs involved and requirements to contain debts. Ultimately, however, investing in programmes that prevent poverty and build human capital is less expensive than trying to fix problems later. Critics also argue that providing benefits to those above the poverty level is not an efficient use of resources. But we have seen that with a crisis like COVID-19, the consequences can be devasting for both low-income and middle-income families. UCB would provide benefits to all families, thereby guaranteeing an income floor protecting children and families from the impact of crises.
The increased need for social protection has mobilized the international community and donors to provide swift responses but these are limited to temporary programmes providing modest support to families. Ongoing response and recovery efforts should be accompanied by structural reforms to expand and improve effectiveness of social protection systems. UNICEF calls for concrete measures to reform those systems to better reach and protect all children.
Such efforts are not only important to the achievement of SDG1 but to ensure that the recovery is for all.
To learn more about Universal Child Benefits, please read the new brief from UNICEF here.