Family 500 plus - a state social policy program implemented in Poland since April 1, 2016, designed to help families raise children through monthly child-rearing benefits for each child in the family in the amount of 500 PLN. The intention to create the program was announced in 2015 by the Law and Justice party, and developed and implemented by Beata Szydło's government after her victory in the 2015 parliamentary elections.

Introduction

On February 11, 2016, the Polish Parliament passed a law on state aid for raising children[12]. Contrary to original announcements that the benefit would be targetted at every child in Poland, the law adopted a solution in 2016-2019 that the benefit is not for the first, but only for the second and subsequent children in the family[13]. The first benefit payments were made in April 2016[14].

The benefit for the first child was introduced as of July 1, 2019[16][17].

Implementation

Recipients of benefits under the program are parents, legal guardians or actual guardians of a child (biological or adopted). The benefit for one child is PLN 500 and is not taxable. When granting benefits for the second and subsequent children in the family, no income criterion applies. Children up to the age of 18 are covered by the benefit[19][20].

According to the Ministry of Family, Labor and Social Policy website, the cost of the program in 2016 exceeded PLN 17 billion and covered 3.8 million children (2.78 million families)[21]. According to Minister Elzbieta Rafalska, families with two children accounted for the largest share of families covered (62% of beneficiary families, or about one and a half million families). More than a third of the beneficiary families resided in rural municipalities (33.5% of assistance), and one in four in urban-rural municipalities (24.6% of assistance)[22].

The 2017 budget set aside about PLN 23 billion for the program[23].

The cost of handling one application in 2016 ranged from PLN 89 to PLN 489, plus a 1-2% commission for the office distributing the benefit. For 2017, these costs have been unified; they are planned to total PLN 7.6 million (cost of processing an application: PLN 140, commission for paying the benefit: 1,5%)[24].

In 2018, it was reported that in 2016-2017, about 3.7 million children from 2.4 million families benefited from the program. The largest number received support in the Mazovia region, and the smallest in the Opole region. The program cost PLN 42.6 billion over the period. According to the Institute for Structural Research, estimates indicate that some 103,000 women[25], mostly poorly educated from small towns,[26] may have dropped out of the labor force following its implementation.

An analysis by the Central Statistical Office, conducted on the occasion of the cyclical LFS survey of Poles' economic activity, indicates[27] that the vast majority of Poles declare that, as a result of the "500+" program, they have not taken any action to change their situation in the labor market. According to this research, out of the entire group of 5.9 million beneficiaries of the program, it affects (based on respondents' declarations) the behavior of only about 293 thousand people (4.9%). Only for 151 thousand people (about 3% of the respondents) the 500+ benefit was a positive stimulus; 76 thousand of this group (under the influence of the benefit) took up a job, while 75 thousand started looking for one. The deactivating effect of the benefit was expected to affect a group of 67,000 people, of whom 34,000 said they had stopped looking for a job, and 33,000 said they had quit. According to the Ministry of Family Affairs, Labor and Social Policy, labor activation may have occurred due to, among other things, the fact that those concerned received funds for child care during working hours. The number of economically inactive mothers increased from 877,000 to 918,000.[28] Since only 3% of respondents declared that the 500 plus program "encourages them to work," one cannot conclude from the results that the 500+ program encourages the majority of recipients to take up work.

Opinions

Positive Opinions

In 2016, Beata Szydło's government was awarded the European Confederation of Large Families (ELFAC) Award for outstanding achievements in the sphere of conducting pro-family policies, in particular the "Family 500+" program[29].

In 2017, Elzbieta Rafalska received the Grzegorz Palka Award for implementing, together with municipal governments, the "500+ Program"[30] and the award of the Spanish Platform for Families Catalonia-ONU in the international category for the implementation of the "Family 500+" program as an important instrument for promoting the family[31][32][33].

Negative opinions

The program has been criticized by some circles due to its low effectiveness in improving the demographic situation and the long-term deterioration of the state's public finances. According to the calculations they present, the stimulation of fertility through the "Family 500+" benefit in 2016 amounted to PLN 1.15 million for each additional child, which is many times more than the amount of contributions made over the course of a lifetime by the average Pole.

Another indicated effect of the program is a change in citizens' expectations of social benefits. This results in the need to promise higher and higher cash transfers during election campaigns in order to win elections[34]. In February 2014, then-Prime Minister Donald Tusk regarding the "Family 500 plus" program accused the Law and Justice Party of failing to demonstrate feasibility of financing it, and assessed that, according to him, "there is no way to finance this project."[35] Similar allegations about the impossibility of financing this program, among others, were made in October 2015 by economist and former Finance Minister in Donald Tusk's government, Jacek Rostowski[36].

In January 2016, Razem Party national board member Adrian Zandberg blamed the program for excluding single parents and families who are in a poor financial situation and simultaneously privileging richer people at the expense of poorer ones[37].

In February 2016, the then Member of the European Parliament and leader of the KORWiN party Janusz Korwin-Mikke accused the program of harming the state budget by "having to pay 700 PLN in taxes for every 500 PLN" and of "luring voters" with money, rather than a real desire to improve the situation of families[38].

In February 2017, economist and long-time deputy prime minister Leszek Balcerowicz accused the program of "making people lazy," since, in his view, poverty should be fought by offering people jobs, and the "Family 500+" program is distributing money taken from other people[39].

Postulated alternatives:

The political party Modern has declared since the inception and implementation of the program in 2016 that it wants to transform the "Family 500 plus" program into an "Active Family" program, which is supposed to consist of tax cuts for each child[40].

The Kukiz'15 movement, in place of the "Family 500 plus" program, proposed Milton Friedman's so-called "negative income tax" concept in 2016[41].

Robert Biedron's Spring political party proposed in 2019 to expand the program by removing restrictions on mothers and fathers raising children on their own[42].

The Right of Commonwealth political party proposed in 2018 to amend the program by introducing PLN 1,000 for each third and subsequent child[43].

The federal political party Confederation for Freedom and Independence, which includes the KORWiN and National Movement political parties, among others, declared in 2019 the introduction of the "1000+" program consisting of universal tax relief - reducing PIT to zero percent, making Social Security contributions voluntary, and abolishing excise taxes on gasoline[44][45].