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Nr indeksu 369209
PL ISSN 0137–4729
Editors: Elżbieta Bojanowska, Ph.D. (Cardinal Stefan Wyszyński University), Kazimierz W. Frieske,
Professor (Institute of Labour and Social Studies)
Reviewers: Professor Bożena Balcerzak-Paradowska (Institute of Labour and Social Studies), Professor
Marek Bednarski (Institute of Labour and Social Studies), Professor Jolanta Grotowska-Leder (Univer-
sity of Lodz), Professor Barbara Pasamonik (The Maria Grzegorzewska Pedagogical University), Profes-
sor Krzysztof Piątek (Nicolaus Copernicus University in Toruń), Professor Zenon Wiśniewski (Nicolaus
Copernicus University in Toruń)

The Institute of Labour and Social Studies – ILSS (Instytut Pracy i Spraw Socjalnych) based in Warsaw,
Poland, is a scientific research institute. The Institute has been operating for forty years serving not only
government administration and policy makers, but also taking active part in academic research works,
tutoring and supervising series of publications, especially those valuable in the teaching process. The
Institute’s basic research works are accompanied by applied studies, and the requirements of current and
strategic social and economic policies. The main forms of activities are: Research activities as: statutory
research, State Committee for Scientific Research grants, international projects, seminars, conferences.
International co-operation as: international research projects, bilateral research projects, data
base development; Expert reports and consulting as: assignments commissioned by various institutions,
activities of public services; Education as: post-graduate studies, phd studies. The research activities of
the Institute cover the labour and social policy questions in an interdisciplinary manner. The research THE POLISH MONTHLY JOURNAL
directions are adjusted to the current needs of the national socio-economic policy, and comprise such
areas as economy, law, political sciences, sociology, pedagogic sciences. The research covers the topics
crucial to currently pursued socio-economic policy and directions of change processes, such as:
• Labour problems (labour market policy, migration for work, human resources management,
working time, remuneration and motivation systems, occupational science, labour law).
• Collective labour relations (social partners, collective disputes, employee participation, collective
bargaining, collective agreements, collective labour law).
• Social policy (state social policy, social security, social institutions and instruments, family

CHILD BENEFIT PROGRAMME 500+

problems and family policy, poverty, social exclusion and counteracting measures).
Institute research findings are used by the central and local government administration as well as
by business entities. The publishing house of the Institute prepares numerous publications (for Polish
and international markets) that are useful in the teaching process. The seminars and conferences
organized by ILSS are forums for exchanging experiences, ideas, expertise and knowledge on a national
OUTCOMES AND OUTPUTS
and international level. The researchers employed in the Institute are recognized scientists, both
in Poland and abroad. Their expertise and experience encourages foreign partners to undertake
international research projects with ILSS. As a leader of labour and social studies in Poland, ILSS took
part in numerous EU funded research activities under 6th & 7th FP, PHARE, Leonardo da Vinci, etc.  IN THE SHADOWS OF EU
The Institute has actively participated in the processes of accession and integration of Poland into
the European Union. In the wake of the accession the research activities focused on:
– Problems of adaptation of Polish law to European legal regulations,  EXPECTED IMPACT ON LABOUR MARKET
– Influence of EU integration on labour market situation and trends,
– Labour market and social policy and the challenges of integration,
– European and Polish standards of social security,
 POTENTIALITIES: DEMOGRAPHY
– Social exclusion and reintegration. AND PENSION SYSTEM
Poland’s accession into the European Union on 1st of May 2004 does not mark the end of the ILSS
activities and struggles in these research areas. On the contrary, we expect new problems to appear
and to be identified and dealt with. If you have any questions regarding activities or research of ILSS,
 AGAINST POVERTY AND INCOME INEQUALITY
please feel free to contact us. We are eager to undertake any form of international cooperation with
institutions and individuals.  PERCEPTIONS WITHIN LOCAL KNOWLEDGE
OF THE POOR
INSTITUTE OF LABOUR AND SOCIAL STUDIES
address: ul. Bellottiego 3B, 01-022 Warsaw, Poland; office: tel. (48 22) 53 67 511; fax (48 22) 53 67 514
e-mail: instprac@ipiss.com.pl
Management: Łukasz Arendt, General Director of the ILSS
Izabela Hebda-Czaplicka, Economic Director
The Owner of the Title: Ministry of Family, Labour and Social Policy,
00-513 Warszawa, Nowogrodzka street, 1/3/5
Publisher: Institute of Labour and Social Studies, 01-022 Warszawa, J. Bellottiego street 3B
Published and Financed by the Owner of the Title
Printed and bounded by: Publishing House MFLSP. Ordering 643/2017. Number of Copies: 150. No 1 ENG (13) WARSAW 2017
 About the Authors
Elżbieta Bojanowska – doctor of sociology, social politician, assistant professor at the Institute of Sociology of
the Cardinal Stefan Wyszyński University in Warsaw; Undersecretary of State at the Ministry of Family, Labour and
Social Policy. Main areas of research: population ageing and its socioeconomic consequences, intergenerational
CONTENTS relations and problems related to poverty and social exclusion.

FROM THE EDITORS – Elżbieta Bojanowska, Kazimierz W. Frieske ....................
Michał Brzeziński – is an Adjunct Professor at the Faculty of Economic Sciences University of Warsaw where he
teaches history of economics and political economics. His research interests include modelling income and wealth
distribution, measurement of poverty and inequality, happiness economics and economic policy in Poland. His
publications are found in journals such as Economic Systems, Empirical Economics, Journal of Applied Econometrics,
1
Physica A, Applied Economics, Economics Letters, Scientometrics, and Social Indicators Research.

IS THE 500+ CHILD BENEFIT PROGRAMME OVERGENEROUS? POLISH SOCIAL Stanisława Golinowska – Professor at the Jagiellonian University Medical College, Cracow, and at the Institute
for Labour and Social Studies, Warsaw. She has led and participated in many scientific Polish and European projects
PROTECTION EXPENDITURE ON BENEFITS AND SERVICES FOR FAMILIES about social policy and public health, particularly on poverty, ageing, disability and long-term care, especially oriented
WITH CHILDREN COMPARED WITH OTHER MEMBER COUNTRIES OF THE on Central and Eastern European issues.

EU AND OECD – Krzysztof Hagemejer .................................................................
COMBATING POVERTY THROUGH FAMILY CASH BENEFITS. ON THE
FIRST RESULTS OF THE PROGRAMME “FAMILY 500+” IN POLAND –
Stanisława Golinowska, Agnieszka Sowa-Kofta ...................................................
THE 500+ CHILD BENEFIT SCHEME AND SOCIAL WELFARE IN POLAND –
Elżbieta Bojanowska .............................................................................................
THE IMPACT OF “FAMILY 500+” PROGRAMME ON HOUSEHOLD INCOMES,
POVERTY AND INEQUALITY – Michał Brzeziński, Mateusz Najsztub .................
1 Krzysztof Hagemejer – PhD, professor at Bonn-Rhein-Sieg University of Applied Sciences, Germany. Lecturer
at Collegium Civitas, Warsaw and Maastricht Graduate School of Governance. Economist, specializing in economics
and financing of social policies. Between 1993 and 2014 at Social Protection Department of the International Labour
Organisation in Geneva, 2013–2014 Chief of Social Protection Policy, Standards and Governance Branch. Key
member of the team working on new international labour standard, Recommendation no 202 concerning National
Floors of Social Protection, adopted by the International Labour Conference in 2012. Before joining the ILO, assistant
7 professor at the Department of Economics of Warsaw University and adviser to the Polish Minister of Labour and
Social Policy.
Elżbieta Kryńska – Professor Krynska works at the University of Lodz, where she is a Director of Department
13 of Economic Policy, and in the Institute of Labour and Social Studies, where she is a Head of Department of
Employment and Labour Market. Her professional interests are focused on contemporary labour markets issues.
She is a well-known expert in the area of socio-economic policy, in particular within labour market issues. She has
participated in many seminars and conferences, presenting results of research studies. She is an author of about
16 300 research papers and books. Professor Krynska has been a project manager in many national and international
research projects.

EFFECT OF CHILD CARE BENEFIT (500+) ON POVERTY BASED ON
MICROSIMULATION – Ryszard Szarfenberg ........................................................
INFLUENCE OF THE 500+ PROGRAMME ON THE POLISH LABOUR MARKET.
WHAT IS, WHAT WILL BE WHAT TO EXPECT… – Elżbieta Kryńska ...................
Mateusz Najsztub – has been working as an analyst in Centre for Economic Analysis, CenEA in Szczecin since
2013. He obtained his Master’s Degree in Chemistry from the Adam Mickiewicz University in Poznań in 2011. In his
25 work at CenEA he focuses mainly on the SIMPL and EUROMOD microsimulation models that provide the opportunity
to analyse direct effects of tax and benefit policy reforms on household disposable income. Apart from keeping the
model up to date he also is involved in technical maintenance including data correction and weight adjustments.
He also works with results of the SHARE 50+ survey, where he focuses on analysing social exclusion among 50+
31 population.

Kinga Pawłowska – is a sociologist and anthropologist. Since 2008 she has worked as an Assistant Lecturer, and
CHILD CARE BENEFIT 500+ AS COMPONENT OF LOCAL KNOWLEDGE: since 2015 as an Associate Professor at the Faculty of Administration and Social Sciences at the Warsaw University
ATTEMPT TO GET INSIGHT – Kinga Pawłowska ................................................. 37 of Technology. Her scholarly interests are diverse, yet they concentrate mainly around the issues of social policy,
inheriting of poverty, sociology and anthropology of organization, power in organization and critical management
studies. She is an author of a few articles, and co-author of monographic works and handbooks. She has participated
THE “FAMILY 500+” PROGRAMME: POTENTIAL IMPACT ON DEMOGRAPHIC in the projects on social economy and the processes of inheriting poverty. Now, she carry out the project on power
in organization.
PROCESSES, HE LABOUR MARKET AND THE PENSION SYSTEM – Maria
Pierzchalska .......................................................................................................... 42 Maria Pierzchalska – A graduate of the Faculty of Law and Administration at the University of Warsaw. From 1991
PhD in economics from the Faculty of Economics and Social Sciences at the Warsaw School of Economics. Since
1977 she was an employee of the Social Insurance Institution in Radom. In 1991 she became director of Social
ABOUT THE AUTHORS Insurance Institution in Radom. Since 1995 she has been rector of the several Universities in Radom. She is an author
of several publications on social security and social policy. She is a organizer and co-organizer of numerous scientific
conferences, founder of the “Open Hearts” Foundation and the Polish Social Insurance Association in Radom.
Founder and rector of the European University Radom-Warsaw.
Content List and Abstracts are easy to find at the following website:
http://politykaspoleczna.ipiss.com.pl Agnieszka Sowa-Kofta – Assistant Professor at the Institute of Labour and Social Studies and expert of the
Center for Social and Economic Research – CASE Foundation. Her research interests focus on social protection
policy, including poverty, inequalities, health and long-term care. She has been participating in numerous national
and international research projects.

Ryszard Szarfenberg – PhD in political sciences, employed at the Warsaw University in the Institute of Social
Policy, main research areas are poverty, social exclusion and social assistance, reviewer at the International Journal
of Social Welfare.
 From the Editors
Dear Readers,

It is not excluded that over a dozen or so years the ongoing discussions about the 500+ child support benefit – certainly one of the key
social programs of the last quarter-century – will become a material based on which students of social sciences will have the opportunity to
analyse the problems resulting from thinking that prompts us to seek simple cause-effect relationships and try to explain the various social
phenomena with one independent variable.
Unfortunately, what we usually consider to be the result of introducing of some – supposedly – change-inducing stimulus into the social
reality is in fact the result of a complex system of many different factors, which all influence, to different degrees, the above mentioned result,
i.e. our dependent variable. The public opinion expects a simple message from the speaker – for example – that the 500+ child support
benefit results in the reduction in the rate of poverty or in the decrease in the cost of social assistance, but after all, such regularities are
conditional. Much depends on the situation on the labour market, the dynamics of wage growth, etc. Some sceptical opinions on the child
support benefit were predicting its dramatic impact on the labour market It turned out, however, that the claim on the demotivating nature of
the 500+ child support benefit was referring to simplified and – as it turned out – unreliable intuitions rooted in the old, constantly repeated
rhetoric, according to which people’s entry into the labour market is primarily driven by the economic constraint. It is easy, after all, to claim
that at least part of the workers whose families receive this benefit have not retired from the labour market, but “have been retired” – replaced
by migrant workers willing to work for less money.
We should therefore humbly admit that the temptation to appear in public discussions leads to a continuous reduction of the complexity
of social realities, and also to ignoring the fact that while the families do think rationally, making their economic decisions, but this rationality
is “bounded”, determined by the realities of place and time. Hence, it is worth remembering that whoever interprets, too hasty and / or based
on undisclosed assumptions, the simple coexistence of phenomena as a simple sequence of causes and effects is wrong.
The conclusion would therefore be that: even though – guided by rational thinking – we do not fully understand the complexity of
functioning of the “Family 500+” program; it is however clear that its correlates are at least encouraging – regardless of what is said about
its differentiated impact on the situation of Polish families.

ELŻBIETA BOJANOWSKA
Cardinal Stefan Wyszyński University, Warsaw, Poland
KAZIMIERZ W. FRIESKE
Institute of Labour and Social Policy, Warsaw, Poland

IS THE 500+ CHILD BENEFIT PROGRAMME OVERGENEROUS?

• POLISH SOCIAL PROTECTION EXPENDITURE ON BENEFITS
AND SERVICES FOR FAMILIES WITH CHILDREN COMPARED
WITH OTHER MEMBER COUNTRIES OF THE EU AND OECD
Krzysztof Hagemejer
International Centre for Research and Analysis ICRA, Poland

INTRODUCTION – INCOME SUPPORT PROVIDED TO FAMILIES
AND CHILDREN AS ONE OF THE MAJOR FUNCTIONS
OF SOCIAL PROTECTION
Income support cash benefits and benefits in kind (such as the
provision of childcare) for families with children are recognised
as an important function of overall social protection systems. ILO
Income Security Recommendation no 67 (see ILO 1944) requires
(paragraph 8) that social insurance schemes should provide
supplements to all benefits paid for each (at least the first two) child
of the beneficiary while (paragraph 28) “society should normally
co-operate with parents through general measures of assistance
designed to secure the well-being of dependent children”. In the
Annex of this Recommendation it is made clear precisely how this
cooperation should look:
(1) Public subsidies in kind or in cash or in both should be
established in order to assure the healthy nurture of children, help
to maintain large families, and complete the provision made for
children through social insurance.
(2) Where the purpose in view is to assure the healthy nurture
of children, subsidies should take the form of such advantages as
free or below-cost infants’ food and school meals and below-cost
dwellings for families with several children.
(3) Where the purpose in view is to help to maintain large
families or to complete the provision made for children by sub-
sidies in kind and through social insurance, subsidies should take
the form of children’s allowances.
(4) Such allowances should be payable, irrespective of the
parents’ income, according to a prescribed scale, which should
represent a substantial contribution to the cost of maintaining
a child, should allow for the higher cost of maintaining older children,
and should, as a minimum, be granted to all children for whom no
provision is made through social insurance.
(5) Society as a whole should accept responsibility for the
maintenance of dependent children in so far as parental respon-
sibility for maintaining them cannot be enforced.
Ratified by Poland, Convention 102 concerning minimum stan-
dards in social security (see ILO 1952), devotes its part VII to family
benefits. Article 42 specifies that family benefits should be provided
in the form of (a) periodical cash payments or (b) in-kind provision
in respect of children for food, clothing, housing, holidays or
domestic help; or a combination of both (a) and (b). Article 44 sets

Social Policy No 1 ENG/2017 1

 Table 1. Expenditure on family benefits in Poland – minimum level required by ILO Convention 102
and actual expenditure as reported by Eurostat
Thresholds and actual expenditure Units 2008 2009 2010 2011 2012 2013 2014 2015 2016
Minimum expenditure threshold required Lower 2 762 2 862 2 968 3 082 3 151 3 223 3 311 3 386 3 510
by convention 102 (million pln) upper 5 524 5 725 5 936 6 164 6 302 6 445 6 623 6 772 7020
Minimum expenditure threshold required lower 0.21 0.21 0.21 0.20 0.19 0.19 0.19 0.19 0.19
by Convention 102 (% of GDP) upper 0.43 0.42 0.41 0.39 0.39 0.39 0.39 0.38 0.38
million PLN 16 025 17 671 19 301 20 314 22 508 23 740 26 568 28 581 31 002
Actual expenditure on all family benefits
% of GDP 1.25 1.29 1.34 1.30 1.38 1.43 1.54 1.59 2.60
Source: own estimates based on data from GUS and Ministry of Family, Labour, and Social Policy (MRPiPS) and EUROSTAT ESSPROS database.

a minimum threshold for the country’s total expenditure on all kinds
of family benefits at 1,5% or 3% of the annual wage of an “ordinary
adult male labourer” times the number of resident children in the
country. Following the approach adopted by Uścińska (2005, roz-
dział 2), we assume the wage of an “ordinary adult male labourer”
to be average earnings as reported by GUS fromthe results of the
October earnings survey of men employed in elementary occupa-
tions (that is, major group 9 in the International Standard Classifi-
cation of Occupations, ISCO-08). During the period 2010–2014,
earnings of men employed in elementary occupations were, on aver-
age, equal to 66% of overall average earnings (EUROSTAT defines
low earnings as earnings at the level of two-thirds of median
earnings).
Calculations for Poland (Table 1) show that spending on family
benefits should not be lower than the equivalent of 0.2–0.4% of
GDP to comply with the requirements of Convention 102. As per
the majority of European countries, actual expenditure on social
protection for families in Poland is significantly higher than this
minimum threshold set by the Convention1 but – as we illustrate
further on – before the establishment of the 500+ family benefit
programme, it was well below the average level of such spending in
European Union countries.
There is also the newest international labour standard in the
area of social protection: ILO Recommendation no 202, concerning
national social protection floors (ILO 2012). This recommendation
demands that all ILO member countries provide to all residents at
least a minimum income security over the life cycle – for children,
adult persons having no job or unable to work, and the elderly.
Basic income security for children should be provided at least at
a nationally defined minimum level but should secure all children
(including children of refugees and illegal migrants) a life of dignity
and provide access to nutrition, education, care, and any other
necessary goods and services.
The new recommendation also stresses the importance of
a social protection monitoring mechanism based on high quality
statistics through which countries should regularly asses the per-
formance of their social protection systems. The International Labour
Office is currently reviewing implementation of this Recommenda-
tion in all member countries through its General Survey (ILO 2017).
Global comparisons of data on social protection expenditure
and coverage are also available in ILO World Social Security/
Protection Reports (ILO 2010 and 2014).
COMPARING SOCIAL PROTECTION SPENDING
INTERNATIONALLY – METHODOLOGY AND DATA SOURCES
There are two major international databases which provide data
enabling international comparisons of overall social protection
expenditure and expenditure on different functions of social pro-
tection, including social protection aimed at families with chil-
dren. Countries in the European Union as well as Switzerland, Nor-
way, Iceland, and some candidate countries are covered by the
ESSPROS database (Eurostat 2016). OECD member countries are
covered by the SOCX database (Adema et al. 2011). There are cer-
tain methodological differences between these two databases;
ESSPROS methodology covers public expenditure and mandatory
private expenditure, whereas, OECD SOCX database also includes
some voluntary private social protection expenditure (e.g. voluntary
pension expenditure or other benefits provided to employees by
employers). The core ESSPROSS database only includes benefits
in cash or in kind provided directly to households or individuals,
while OECD SOCX also includes expenditure benefiting individuals
or households indirectly (such as wage subsidies or some other
forms of active labour market policies).
Provisions which are considered when estimating overall ex-
penditure on social protection for families with children are pre-
sented in Box 1.
BOX 1:
ESSPROS – benefits and services covered by expenditure statistics
Cash benefits:
Income maintenance benefit in the event of childbirth (maternity
leave benefits): flat-rate or earnings-related payments intended to
compensate the protected person for the loss of earnings due to absence
from work in connection with childbirth for the period before and/or after
confinement or in connection with adoption. The benefit may also be paid
to the father. These benefits may be paid by public social protection
schemes, but they are also provided by employers in the form of con-
tinued payment of wages and salaries during absence from work.
Birth grant: benefits normally paid as a lump sum or by instalments
in case of childbirth or adoption.
Parental leave benefit: benefit paid to either mother or father in
case of interruption of work or reduction of working time in order to bring
up a child, normally of young age.
Family or child allowance: periodical payments to a member of
a household with dependent children to help with the costs of raising
children.
Other cash benefits: benefits paid independently of family allo-
wances to support households and help them meet specific costs such
as costs arising from the specific needs of lone parent families or fa-
milies with handicapped children. These benefits may be paid periodically
or as a lump-sum.
Benefits in kind:
Child day care (kindergartens, crèches): shelter and board pro-
vided to pre-school children during the day or part of the day. The age
limit for pre-school is defined by national legislation. Financial assistance
towards the payment of a nurse to look after children during the day is
also included here.
Accommodation: shelter and board provided to children and families
on a permanent basis (such as in nursing homes and foster families).
Home help: goods and services provided at home to children and/or
to those who care for them.
Other benefits in kind: miscellaneous goods and services provided
to families, young people or children (holiday and leisure centres),
including reductions in prices, tariffs, fares and so on for children or large
families, where expressly granted for social protection. This category
also includes family planning services.
Source: ESSPROS 2016.
For EU member states which are also OECD members (like
Poland), OECD SOCX database receives disaggregated data from
ESSPROS database and then converts it to adjust to its own
classifications.

2 Social Policy No 1 ENG/2017

 Figure 1. Social protection expenditure as a percentage of GDP in Poland and European Union
29.0
29,0
26.3 26.1 26.1
27.0
27,0 25.3 25.5 25.7 25.7
25.0
25,0
23.0
23,0
21.0 21.1 21.0
20.3 20.0
21.0
21,0 19.6 19.7
19.0
19,0
17.0
17,0
2000 2001 2002 2003 2004 2005 2006
EUROPEAN UNION
Source: Eurostat database.
OECD, in its Family Database (collection of information on
situation of families and family policies in OECD countries), in ad-
dition to the above types of benefits in cash and in kind, also esti-
mates tax expenditure (forgone tax revenue due to tax breaks) for
the purpose of supporting families and children.
Unfortunately, both the above databases suffer rather long
delays between updates and thus, the most recent disaggrega-
ted data are available only for the year 2014 (OECD have made
some estimates of aggregated social protection expenditure until
2016).
Poland has an obligation to submit data to the EUROSTAT
ESSPROS database but, apparently, there are problems with com-
piling the necessary data which would fully respond to ESSPROS
methodological requirements. For example, only since 2008 has
the data being submitted included the full required range of cash
and in-kind expenditure on family benefits – before that year, Polish
data in ESSPROS did not include significant expenditure on care
provided by, for example, kindergartens.
Required data are produced under the auspices of different
government departments (Ministry of Family, Labour and Social
Policy; Ministry of Health; Ministry of Education; ZUS and KRUS)
and there are insufficient resources allocated to the task of co-
ordinated data collection. Neither the Main Statistical Office nor
the Ministry of Family, Labour, and Social Policy (responsible for
data compilation) publish these data domestically (while a num-
ber of national statistical offices do – even in countries outside
the European Union – including, for example, the statistical office of
Ukraine2).
Due to the reasons explained above, international comparisons
as presented below are limited to the period of the last several years
and the years 2015–2016 are my own estimates based on partial
information.
RECENT OVERALL SOCIAL PROTECTION EXPENDITURE
TRENDS IN POLAND COMPARED WITH OTHER COUNTRIES
Contrary to beliefs often promoted by the media, overall so-
cial protection expenditure in Poland is at rather moderate levels
compared to that of many other European countries. Social pro-
tection expenditure in Poland increased significantly at the very
beginning of the nineties, mainly because of the removal of price
subsides and compensating increases in cash social benefits to
offset the resulting cost of living increases. In addition, rapidly in-
creasing unemployment was substantially accommodated via the
pension system through early retirement provisions.
As a result, overall social protection expenditure increased by
the mid-nineties to levels comparable with the EU average (see
Golinowska and Hagemejer 1999). Subsequently, however, as a re-
sult of the policies of consecutive governments to reduce the ove-
rall size of public spending, including social protection expenditure
(see for example Ministerstwo Gospodarki, Pracy i Polityki Spo-
Social Policy No 1 ENG/2017
28.7 28.6 28.7 28.9 28.7
28.3
25.9
25.3
20.3
19.3 19.7 19.4
18.7 18.9 19.1
18.4
2007 2008 2009 2010 2011 2012 2013 2014
POLAND
łecznej, 2003), levels of asocial protection expenditure measured
as a proportion of GDP have been falling well below the EU average;
pensions and other benefits were adjusted at rates lower than
average income growth rates, while many benefits and income thres-
holds entitling people to income-tested benefits were not adjusted
at all for long periods.
Figure 1 shows the increasing gap, during the period from
2000 to 2014, between social protection expenditure in Poland
(measured as a percentage of GDP) and the average in European
Union countries. One can see a significant increase in the EU
average during the years of economic and financial crisis 2008–
–2009. This increase comes not only from the fact of recessionary
GDP decreases in a number of countries within the EU but also as
a result of policies to use additional social spending as stimulus to
stabilize aggregate demand. Poland experienced no such recession,
only a slowdown of economic growth, which explains why any in-
crease during the period 2008–2009 in Poland was much more
moderate.
When comparing levels of public social protection expenditure
in different countries, one must consider the fact that countries
differ significantly with respect to taxation of social benefits. In
some countries (like Czech Republic) social benefits including
pensions are not taxed at all, in other countries only certain be-
nefits are exempted from income tax (such as family benefits in
Poland), and in other countries, not only income taxes but also
some types of social security contributions are paid on social
benefits (health insurance contributions in Poland, generalized so-
cial contribution in France). Countries also differ significantly with
respect to levels of direct and indirect taxation and thus similar
benefit amounts before taxation may be very different after all the
taxes are paid.
In addition, countries differ in the level and scope of use of tax
breaks for social policy purposes – as is the case in Poland, where
tax breaks for children are one of the important tools of family
policy.
For the above reasons, the OECD has for many years, and
EUROSTAT more recently, also estimated social protection ex-
penditure net of taxes and including the value of forgone tax revenue
due to tax breaks for social purposes. Table 2 below shows, using
Poland and several other countries in the region as an example,
how levels and patterns of taxation affect social protection
expenditure.
In the group of countries for which data are presented in Table 2,
Poland has the highest (along with Slovenia) difference between
social protection expenditure before and after taxation. While,
according to OECD estimates, Polish gross social protection
expenditure in 2013 was 19.4% of GDP, whereas it was only 15.8%
of GDP after the impact of both direct and indirect taxes was taken
into account. In other countries, unlike in Poland, benefits like
pensions and unemployment benefits are not subject to personal
income tax or are taxed at much lower rates than in Poland.
3
 Table 2. From gross to net social protection expenditure (2013, percentage of GDP)
List Variable Poland Czech Republic Estonia Hungary Slovak Republic Slovenia
1 Gross public social protection expenditure 19.4 20.3 15.9 22.1 18.1 24.0
- Direct taxes on social benefits 1.5 0.0 0.6 0.2 0.0 0.4
2 Gross public social protection expenditure net of direct taxes 18.0 20.3 15.2 21.9 18.1 23.5
- Indirect taxes on social benefits 2.1 2.4 2.0 3.4 1.5 3.3
3 Public social protection expenditure net of all taxes 15.8 17.9 13.2 18.5 16.6 20.2
4 Tax breaks for social purposes 0.4 0.9 0.2 1.2 0.1 0.1
- Indirect taxes 0.1 0.2 0.0 0.2 0.0 0.0
5 Tax breaks for social purposes net of indirect taxes 0.4 0.8 0.2 1.0 0.1 0.1
3+5 Net social protection expenditure 16.2 18.7 13.4 19.5 16.6 20.3
Average indirect tax burden 16.0 18.4 20.8 23.6 13.7 20.5
Source: OECD SOCX Database.

Tax breaks for social purposes in Poland are targeted at families
with children and added, in 2013, 0.4% of GDP to the 1.4% of
GDP spent on cash and in-kind family benefits.
In all countries in Europe, up to two-thirds of social protection
spending is allocated to financing needs related to old-age, disa-
bility, and health functions of social protection. Family benefits
rarely consume more than 10% of overall social protection spen-
ding. Nonetheless, countries differ significantly not just with re-
spect to how much they spend on family policies but also
regarding what the roles and weights of different policy instruments
are – how much is spent on cash benefits, how much on servi-
ces in kind (mainly child care), and how much support to fa-
milies is given in the form of tax breaks for family policy pur-
poses.
SOCIAL PROTECTION EXPENDITURE ON FAMILY
AND CHILDREN FUNCTION – RECENT TRENDS IN POLAND
AND INTERNATIONAL COMPARISON
Important policy changes within the broad area of family po-
licies, and within it, social protection policies directed at fami-
lies with children were debated and formulated during the pe-
riod 2010–2015 (with a major role played by the Social Policy
Bureau in facilitating the President cooperating closely with the
Ministry of Labour and Social Policy). Starting from 2013, the
scope and length of maternity leave were substantially extended,
transforming it into parental leave. Tax breaks for families with
children were redesigned and the mechanism “zloty for zloty”
became an entitlement to income-tested family benefits. Star-
ting from 1 January 2016, this new mechanism, along with new,
much more flexible rules regarding use of maternity/parental leave,
came into force, together with new parental benefit available to
people not contributing to social insurance. During the same pe-
riod, important efforts were made (and financial resources allo-
cated) to expand coverage of children attending kindergartens and
crèches (with less successes regarding the latter).
In addition to all these policies, the new government – in power
since November 2015 – introduced a new family benefit (the so-
called 500 plus programme) providing 500 PLN monthly for each
child starting from the second child in the family (and for the first
child in low-income families).
Figures 2–4 show the evolution over time of expenditure on
family benefits (as a percentage of GDP), respectively: cash be-
nefits, benefits in kind, and total expenditure.
Cash benefit expenditure for families and children (Figure 2)
during the period 2000–2014, in the EU, was on average relatively
stable at the level of 1.5–1.6 percent of GDP. At the same time in
Poland, one could see benefit expenditure growing at a rate slower
than GDP growth during most of the period 2000–2012. The ratio
of benefit expenditure to GDP declined from 1% in 2000 to 0.7%
in 2012 (mainly because cash benefits were not adjusted to gro-
wing costs of living and incomes). Only since 2013 has expenditure
on cash family benefits begun to grow faster than GDP – the benefit
expenditure to GDP ratio had increased to 0.84 percent by 2015,
however, it was still nearly 50% lower than the average in other EU
member countries.
In 2016, the ratio of expenditure on all cash family benefits
to GDP, not taking into account family benefits provided within
the programme 500+, increased further to 0.93% of GDP. Pro-
gramme 500+ in 2016 added another 0.92% of GDP and thus,
in total, the ratio to GDP of expenditure on cash family benefits
actually increased to 1.85%, above the EU average of 1.6%.

Figure 2. Expenditure on cash family benefits in Poland and the European Union 2000–2016 (% of GDP)

Source: EUROSTAT database and own estimates based on GUS and MRPiPS data.

4 Social Policy No 1 ENG/2017

 Figure 3. Expenditure on in-kind family benefits in Poland and the European Union 2000–2016 (% of GDP)

Source: EUROSTAT database and own estimates based on GUS and MRPiPS data, data for Poland before 2008 not available.

Figure 4. Total expenditure on family benefits in Poland and the European Union 2000–2016 (% of GDP)

Source: EUROSTAT database and own estimates based on GUS and MRPiPS data, data for Poland before 2008 not available.

Expenditure on family benefits in kind (Figure 3, mainly finan-
cing of care services in kindergartens and crèches) has been in-
creasing faster than GDP and faster than expenditure on cash be-
nefits in the EU. This reflects policy support from the European
Commission as well as many social policy makers in the EU
member countries, favouring care services (seen as “social invest-
ment” bringing enhanced participation of parents in the labour
market as well as expanding social capital) over cash benefits (seen
by some as an instrument discouraging labour market participation).
Polish social policy has followed this trend but while on average in
the EU expenditure on services grew to almost one-third of total
family benefit expenditure, in Poland, as the role of cash benefits

Figure 5. Total expenditure on family benefits (including tax breaks for families with children) in Poland (estimated after the first year
of programme 500 plus) compared with the EU average and selected EU member countries (most recent year available) (% of GDP)

Source: OECD Family Benefits Database and own estimates for Poland based on GUS and MRPiPS data

Social Policy No 1 ENG/2017 5

was declining in relative terms, expenditure on benefits in kind
formed half of the total benefit expenditure.
As shown in Figure 4, the ratio to GDP of total expenditure on
social protection for families and children was significantly lower in
Poland until 2015 than on average in the EU member countries –
although after 2011, this ratio in Poland was increasing faster than
the EU average, thus the gap between relative expenditure levels
has been steadily decreasing.
Introduction of family benefits within the 500+ programme has
increased the expenditure to GDP ratio to 2.6%, which not only
closed this gap but even made the family benefit expenditure ratio
in Poland slightly higher than the EU average. It is projected that
in 2017, the ratio will reach 3%.
Before 2016, the ratio of total family benefit expenditure to
GDP in Poland was one of the lowest in the European Union. As
Figure 5 shows, increasing the benefit expenditure ratio to 2.6% in
2016 and probably to over 3% in 2017 (or 3% in 2016 and 3.5%
in 2017 if one also includes tax breaks for families with chil-
dren), moves Poland significantly up the ranking of EU countries.
However, the expenditure ratio will still be lower than in countries
leading the rankings – e.g. United Kingdom, Denmark or France. What
has changed significantly due to the introduction of the 500+
family benefit programme is the structure of expenditure. Poli-
cies before 2016 favoured expansion of care services and as
a result, expenditure in-kind became half of the total expenditure
(excluding tax breaks). Now, proportions have changed and ex-
penditure on services has become less than one-third of the total
expenditure.
Figure 5 shows that countries in the EU differ very significantly
with respect to the relative roles of three different types of policy
instruments – cash benefits, services, and tax breaks – in shaping
family policies. After the recent changes which increase the role of
cash benefits, the structure of expenditure in Poland is more similar
to expenditure patterns in countries like the United Kingdom,
Ireland, Luxembourg or Austria, rather than in Scandinavian coun-
tries which place much greater emphasis on the role of services.
There is now an open question as to how expenditure levels and
structures will evolve in the future.
CONCLUSIONS
While the level of expenditure on social protection for families
with children has been significantly lower in Poland than in many
EU member countries and in the EU on average over the last
decade, the introduction of the new family benefits programme
500+ has increased the expenditure to GDP ratio to a level even
slightly above the EU average. The structure of expenditure has also
changed – benefits in kind (mainly care services) which constitute
half of the overall spending, are now less than one-third of total
family benefit expenditure.
The key issues arising from this are what other changes the
future will bring and what shape the further evolution of this ex-
penditure will take?
Although access to kindergartens has improved significantly
over the last several years, there is still a coverage gap to be closed.
At the same time, the percentage of children younger than three
with access to care services is one of the lowest in the EU. Will this
coverage gap be closed? It would require further increases in
expenditure or rather increased cash benefit expenditure, which will
then crowd out other expenditure and so there will be no resources
available for expanding coverage of care facilities.
After the introduction of 500+ programme, family cash bene-
fit schemes overlapped to a certain extent. Will there be a har-
monization of provisions and entitlements leading to more certain
stabilization of expenditure?
In the past, family benefits and many other social protections
have been eroding in terms of benefit levels and their impact, due to
6 Social Policy No 1 ENG/2017
lack of regular adjustments of benefit levels alongside increases in
costs of living and incomes. There are still no provisions requiring
regular adjustments in place. Will such requirement be put in
place?
Expansion of tax breaks for families with children has been
treated as an alternative to cash benefits by policymakers in re-
cent years. Now, when cash benefits have become much more
meaningful, does one need such a tax break at all?
Answers to the above questions will shape future social
protection for families and children – both the costs and its impact.
Whatever these answers will be, there is no doubt there is an urgent
need to improve the system of monitoring of social protection
policies which would provide comprehensive, reliable, high-quality
statistical data presenting costs of different social protection sche-
mes, measuring overall fiscal effort to provide social protection,
and enabling measurement of the efficiency of such efforts in terms
of reduction of poverty, inequality, and social exclusion and in
terms of impacts on labour markets.
1
The Convention’s expenditure threshold is set at a rather low relative level
to enable lower income developing countries to be able to ratify the
Convention.
2
Only during a short period between 1999 and 2003, was the Instytut
Badań nad Gospodarką Rynkową, in cooperation with the Ministry of
Labour and Social Policy, publishing estimates of expenditure on overall
social protection and its specific functions, as well as projections of such
expenditure (see Wóycicka 1999 and 2003).
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Warszawa.

SUMMARY
The recent introduction of cash family benefit programme “500+” ignited debate on the desired levels of
expenditure on family benefits and of overall social protection expenditure in Poland. The objective of the paper is
to inform this debate through comparing levels of family benefit expenditure in Poland with the levels in other
European Union and OECD countries. Analysis of the available data shows that Polish overall gross social
protection expenditure – measured as its ratio to GDP – is significantly lower than the EU average and, after 2000,
has been declining slightly (while EU average of this ratio has tended to increase). Expenditure on old-age,
survivors’, and disability pensions is (as a percentage of GDP) not much lower than the EU average (although,
after taking into account the impact of direct taxation, the difference between expenditure levels in Poland
compared to other countries becomes much greater). At the same time, expenditure on health, unemployment,
and family benefits has over the last 15 years been at significantly lower levels than levels prevailing in a majority
of EU countries. Until 2015, family benefit expenditure in Poland was – as a percentage of GDP – significantly lower
than the EU average. Expenditure on cash benefits in 2012 was 0.7%, which was a decline from 1% of GDP in
2000 and much less than the EU average of 1.6%. Since 2013, cash family benefit expenditure has been increasing
faster than GDP, surpassing 0,8% of GDP in 2015. The introduction of 500+ more than doubled the expenditure to
GDP ratio so that in 2016 it was 1.85% of GDP and one can estimate that in 2017, expenditure on all types of cash
family benefits will surpass 2% of GDP. As expenditure on non-cash aspects of family benefits (benefits in kind like
kindergartens and tax breaks for children) are not much lower in Poland than the EU average, programme 500+
raises overall social protection expenditure on family and children to about 3% of GDP which is slightly over the
EU average but still lower than several higher spending countries in this area – UK, Scandinavian countries, France
or Belgium for example. One has to bear in mind that imitations of data quality and availability and differences
between countries both in terms of policy instruments used by social protection systems and differences of the
extent to which various social benefits are affected by direct and indirect taxation, require caution when drawing
conclusions from above comparison of expenditure levels.
Keywords: family benefits, social protection, social expenditure
Keywords

COMBATING POVERTY THROUGH FAMILY CASH BENEFITS.

ON THE FIRST RESULTS OF THE PROGRAMME
“FAMILY 500+” IN POLAND
Stanisława Golinowska
Agnieszka Sowa-Kofta
Institute of Labour and Social Policy, Warsaw, Poland

INTRODUCTION
The policy of eradicating extreme poverty, pursued globally for
many years – since the adoption of the UN Millennium Development
Goals, continues to raise questions about the effectiveness of the
instruments used. For many years the major beneficiaries of this
policy have been children. Children vulnerable to poverty have no
chance of developing well, which is a loss for the whole society,
which is losing its future assets. Investing in children’s development
is therefore the primary socio-economic objective of a responsible
state that takes into account the factors of future development.
In the policy of eradicating poverty understood as a tool for
investing in the future socio-demographic development of the po-
pulation, the first question concerns the effectiveness of specific
benefits; are money transfers addressed to families with children
more effective than publicly available social services that allow
each child to have good care, health and education? If we were to
choose only one option in this field, then it is important to recognize
that they are based on different social philosophies (ideologies)
(Esping-Andersen 1999; Thévenon 2011).
The dominance of cash benefits (conservative and familialistic)
is based on the conviction of the absolute parental right to decide
freely how to spend their money; they are supposed to know best
what their children need. On the other hand, the preference for
social services (defamilialistic model) refers to the collective re-
sponsibilities (of the state and / or community) to create equal
conditions for all children and to oblige families to use them. It also
takes into account the equality of women in access to work (a mo-
del with both partners working – the dual earner model) and
creating conditions for balancing the participation of partners in
different spheres of life (Saraceno 2011).
In the practice of modern family policy, wealthier countries
(high income countries) use both cash benefits for children, tax
relief and exemptions, and develop social services. Combinations
of applied family policy instruments (family policy packages) may
differ (Bradshaw, Mayhew 2006; Richardson 2015), but their range
is generally uniform and common. Equal access to early education
services and the obligation to use publicly available education until
adulthood are undisputed. A similar attitude applies to controlling the
development of children’s health and their equal access to treat-
ment. Money transfers and some tax exemptions are commonly
used in connection with the costs of children maintenance.
However, there are differences in the approach towards money
transfers. On the one hand, there is a universal approach; equal
benefits for all children, on the other, however, there are supporters
of benefits depending on the level of family income and/or the

Social Policy No 1 ENG/2017 7

 Figure 1. Poverty rate (share of poor persons in Polish households) in Poland 2008–2016

20.0
20,0
17.6 17.3 17.4
18.0
18,0 16.9
16.3 16.2 16.2
15.5
16.0
16,0
13.9
14.0
14,0 12.2
12.8 12.2 12.7
12.0
12,0 10.6
10.0
10,0 8.3
8.0
8,0 7.4 7.2
6.8
6.0
6,0 7.4 7.4 6.5
6.6 6.8
4.0 5.6 5.7 5.8 4.9
4,0
2.0
2,0
0,0
0,0
2008 2009 2010 2011 2012 2013 2014 2015 2016
subsistence minimum relative poverty line social assistance threshold

Source: Central Statistics Office (GUS) 2017.

number of children. Supporters of universal benefits are usually in
favour of the social-democratic social model, while the benefits
addressed only to designated groups (poor families, large families)
are favoured by proponents of liberal options.
With the widespread adoption of poverty reduction policy,
aimed especially at child poverty, comparative research has evol-
ved to assess the effectiveness of the different policies being
implemented. This was made possible by the establishment and
development of several databases, primarily by the OECD (Family
Database) and Eurostat (EU-SILC), which help to ascertain whether
the policy tools used are indeed lowering poverty rates, although
explanations of the results often require in-depth study of the social
and political context of a given country.
Poland in 2015 significantly increased and extended payment
of benefits for working mothers (including benefits for fathers) after
the birth of a child, covering their absence on the labour market for
a year, even for previously unemployed mothers. It is being called
the “Kosiniak benefit” after the then minister of labour and social
policy – Władysław Kosiniak-Kamysz.
The new government, less than a year later (in the second
quarter of 2016), introduced a universal child benefit 500+,
known as the “Family 500+ programme”. It is a benefit that is
in fact a universal child cash allowance. It amounts to 500 zlotys
of monthly untaxed income for every second and subsequent
child until it reaches the age of maturity, without additional con-
ditions. Low income families also receive support for the first or
only child. The income criterion for the benefit is 800 zlotys
net per person and 1200 zlotys when a disabled child is brought
up in the family. This is a generous benefit. In families with three
children it can provide an income at the minimum wage level.
It is also an expensive benefit. In 2016, the “Family 500+” pro-
gramme cost 17 billion zlotys. It is expected that by the end of
2017, the cost of the programme will have increased to 24 billion
zlotys, reflecting almost 40% of the budget deficit assumed for this
year.
What effects does this benefit have? We are considering both
the politically expected and socially beneficial effects, as well as
some side effects that are socially disadvantaging and highly un-
desirable. Complete analyses are not yet available. Statistics are only
available for 2016, but with some degree of research intuition, the
impact of the 500+ income benefit can already be evaluated in some
areas:
– families with children suffering from income poverty,
– deprivation of the needs of children in poor families,
– the tendency of parents to be active in the labour market and
maintain a level of income in the family, earned from gainful em-
ployment,
– the tendency to make procreation decisions; birth of the next
child.
The aim of this article is to consider the effects of the 500+
benefit in each of these areas, supported by appropriate statistical
data wherever they are available. These considerations are con-
ducted on a broad comparative basis, mainly from OECD analyses,
Eurostat data and results of European research conducted within
EU research projects and by some member states.
CASH BENEFITS AND THE POVERTY RATE
Cash benefits are considered an effective tool for combating
income poverty of families with children. The results of several
studies (Ferrarini et al. 2012; OECD 2015; Molin 2016) confirm this
regularity; the introduction/increase of family cash benefits results
in a decrease in income poverty.
For three quarters of 2016 (since April) families with children in
Poland received the 500+ benefit. In the first of these quarters it
was received by 9% of households, in the second by 20% and in
the third by 23% (BBGD 2017). The introduction of the 500+ be-
nefit was accompanied by wage increases and a decrease in unem-
ployment, which added to the factors contributing to the dynamic
reduction of poverty. The net minimum wage since 2017 has been
1,459 zlotys (2,000 zlotys gross) and the registered unemployment
rate fell in 2017 to 7.1%1.
A preliminary assessment of the impact of these factors on the
rate of income poverty reveals that average indicators have shown
an increase in the dynamics of decline, which has already been
observed since 2014 (Figure 1). In 2016, compared to 2015, both
extreme and relative poverty decreased by 1.6 percentage points.
In the first case it was 25%, and in the second – 10%.
However, taking into account income growth in all families
with children in 2016 due to the 500+ benefit, the Figure below
indicates a nearly 30% reduction in the extreme poverty rate; from
8.8% to 5.9%, and in large families (three and more children up
Figure 2. Poverty rate measured on the basis of the extreme
poverty line in families with children aged up to 18, 2016
4.9
total 6.5
5.9
at least 1 child aged 0-17 2016
8.8
one child aged 0-17 4.3 2015
5.3
5.3
two children aged 0-17 8.1
9.9
at least 3 children aged 0-17 16.7
3.7
without children aged 0-17 3.7
0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0
Source: GUS 2017.

8 Social Policy No 1 ENG/2017

 Table 1. Share of the 500+ benefit in disposable income per capita in selected groups of households
Groups of households Most benefiting recipients Least benefiting recipients
By level of income 1 and 2 quintile of disposable income 20%
st nd
5 quintile of disposable income 0.5%
th

By number of children Three or more children 11.7% One child 0.7%

By education level of households’ head Vocational and elementary 9% Higher 1.6%
By socio-economic group Farmers 5.0% Self-employed 2.4%
By place of living Rural areas and small towns (up to 20 thousand Large cities (above 500 thousand inhabitants) 1.3%
inhabitants) 7.3%
Source: own calculation based on individual data of the BBGD GUS 2017.

to the age of 18 years) the decrease of poverty rate reached sumption. Angus Deaton, Nobel laureate in economics (2015), has
60%; from 16.7% to 9.9%. (6.8 percentage points). In families with studied the consumption of poor households in many countries,
two children this decrease was about 3 percentage points (to about including developing ones. His results confirm many previous
5%) and in house olds with only one child, 1 percentage point (to just hypotheses that can be found in the source literature, for example
over 4%). that low incomes generally result in inadequate food intake; meaning
European studies (EU-SILC), conducted also in 2016, show that children consume food which is low in calories or unhealthy, or
that the drop in child poverty in Poland does not include families that in developing countries, when it comes to disbursement of
with a single parent (GUS 2017c). revenues, boys are preferred to girls.
According to the research (conducted especially in the USA –
SHARE OF THE 500+ BENEFIT IN THE FAMILY INCOME www.fcd-us.org and in the UK – British Household Panel Study and
Millennium Cohort Study), in higher-income countries, consumption
Based on the analysis of household income in the last three patterns are significantly impacted by the mother’s education level
quarters of 2016 (GUS 2017), it is possible to identify the pro- and the family income. Low income and low level of education
portion of disposable income in households constituted by the among women are correlated with the occurrence of overweight
500+ benefit. Throughout the whole data set, these benefits among children and the risk of earlier occurrence of chronic
amounted to 16.8%; in urban areas to 15.4% and in rural areas to diseases.
18.5% (BBGD GUS 2017). It has also been confirmed that in poor families extra money is
The share of the 500+ benefit in household disposable in- spent on household appliances, and especially on televisions and
comes was varied due to several basic variables: wealth level, used cars, which create opportunities for mobility, which may be
number of children in the family, level of education of the head of related to work.
the family, belonging to socio-professional groups (source of In the case of the 500+ benefit, the increased family income is
livelihood) and place of residence. dedicated to children, but the family still has the freedom to choose
In total, the least wealthy families benefited in the largest scale how to spend it. This income is not always spent on the specific
from the cash benefit transfers. These families have already pre- needs of children. We can, of course, assume that if it concerns the
viously been largely dependent on social benefits, families with general needs of the family, then the children also benefit. However,
three children and more, rural families and small town families, as it can also happen that the income is spent on the needs of parents,
well as those with a low level of education (primary and secondary which may not result in beneficial effects sufficient to justify the
education) (GUS 2017). expenditure.
We do not know yet of any long-term studies that would allow
STRUCTURE OF CONSUMPTION AND DECREASE us to analyse the structure of consumption in families receiving the
IN DEPRIVATION 500+ benefit. The preliminary view on household spending in
2016 in the three quarters (II-IV) surveyed within the BBGD study,
In economic theory, cash benefits compared to care services indicates that in the families receiving the 500+ benefit, compared
are preferred because they do not limit the consumer’s freedom of to the families not receiving it, the consumption structure was more
choice. However, this judgement does not consider consumption targeted not only on the basic needs, such as food and clothing, but
by children. It is assumed that children are a common good – and also on recreation, culture and transport. These results correspond
not just the “private property” of the parents. For this reason, it is
justified to redistribute income to families with children. Introducing Figure 3. Consumption structure (expenditures per capita)
and raising money transfers aims to achieve a certain social effect; in families receiving and not receiving family allowances 500+
in the case of family benefits there is often a specific purpose in 2016 (quarters II–IV)
indicated (e.g. food stamps, educational vouchers, etc.).
The increase in cash transfers to families with children is also 25.1
food, non-alcoholic beverages 23.6
explained by the increase in the cost of living and the education clothes, shoes 7.2
of children. In prosperous countries, the direct cost of a child is 5.4
17.8
housing, energy
estimated at more than 20% of family income (Esping-Andersen 19.9
4.1
2007; OECD Family Database). Diversification of this cost is high health 5.4
8.9
and significantly dependent on fees for care and educational transport 8.6
services, as well as on the social status of the family. Higher status communication
4.9
4.9
increases the educational aspirations and quality requirements of 8.8
leisure, recreation and culture…
education (e.g. additional private paid tuition). Regardless of the 1.6
6.8
costs of raising and educating children, cash transfers to families educational services 0.7
4.7
only represent a few percent of the cost of the child. hotels and restaurants 4.5
The impact of social benefits on consumption (as compared to 0 5 10 15 20 25 30
wages) has not been, so far, the subject of in-depth empirical re-
households with 500+ benefit households without 500+ benefit
search (Wilcox 1989), even though there is an impressive number
of analysis of how different factors influence the patterns of con- Source: GUS 2017: BBGD.

Social Policy No 1 ENG/2017 9

exactly with the observations widely present in the media, men-
tioning poor families going on holiday (apparently for the first time
in 2016) and the massive purchases of televisions and laptops
(classified to the aggregate of culture) and used cars. Importantly,
there is a noticeable increase in education expenditure (education
services and fees). These directions of influence can only be ve-
rified in further research.
The EU-SILC 2016 study (GUS 2017c), which includes a ma-
terial deprivation assessment, may indicate that the 500+ benefit
may be attributed to a reduction in severe deprivation (comparison
of the 2016 declaration to the 2015 declaration) with respect to:
– covering an unexpected expense of 1,150 zlotys (over 4
percentage points less in 2016 compared to 2015);
– meat or fish consumption every other day (about 2 percen-
tage points);
– holding a car (about 2 percentage points).
WILLINGNES OF PARENTS TO WORK WHEN
THE FAMILY RECEIVES CHILD CARE BENEFITS
Money transfers addressed to families with children are usually
criticized as contributing to reducing the willingness to work, espe-
cially among women. For this reason, if a cash benefit is introduced,
it is rather for a short period of time in the life cycle and when there
is the inability to undertake/continue work because of poverty and/
or caring responsibilities towards young children. In order to miti-
gate the “dependence on benefits” (economic dependency trap;
Kalil et al. 2012; Harvey, Conyers 2016) and the “inactivity trap“
(OECD 1997), it is suggested that conditions are introduced, accor-
ding to which receiving the benefits is subject to the beneficiary’s
commitment to educational and/or employment activity2.
With the increase in the share of women in the labour market,
the difficulties for mothers to combine their care responsibilities
and professional activity has become a cross-society (and public)
issue, which requires universal solutions, dedicated not only to
“families in need” (families with special needs). Many solutions came
from employers; including, primarily, the family-friendly organization
of work; part-time work, flexible working hours and an increased
number of days off.
At the same time, childcare institutions were being established
and developed; both public and community or commercially orga-
nized. Nurseries and kindergartens of increasing quality have beco-
me the primary means of resolving work-life conflicts (McGinnity,
Whelan 2009). Subsiding these institutions is the main tool of the
“pro-family” policy and replaces cash benefits directed to families,
to the extent that in many Western countries (not only in Sweden
and France, but also in Denmark, Slovenia and the Netherlands),
having more children has a much lower impact on reducing the pro-
fessional activity of women compared to countries without deve-
Figure 4. Women employment rate aged 20–49 in Poland (share
of employed women 20–49 in the female population in this age)
by number of children, when the youngest is up to 6 years
80.0
80,0
70.0
70,0
60.0
60,0
50.0
50,0
40.0
40,0
30.0
30,0
20.0
20,0
1 child 2 children 3 children or more
10.0
10,0
0,0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Sources: Eurostat database of the LFS 2017 [accessed on 8.11.2017]
10
loped childcare infrastructure. The Eurostat study (2015) confirms
that the employment rates for women aged 25–49 in the EU depend
not only on the number of children and their age, but also on the
possibility of reconciling work and family life.
The professional activity of women in Poland is strongly cor-
related with the number of children in the family. As indicated by the
European Survey on Labour Force Activity (LFS), in Poland only
50% of women aged 20–49, with three or more children, of which
the youngest is up to 6 years old, were employed; and nowadays
this trend is falling. In Western Europe, this indicator is higher than
60% (Eurostat 2017).
This relatively low employment rate for women and children in
Poland is mainly caused by the insufficient supply of care services,
especially for young children (nurseries). This is related to family
policy, which mainly consists in extending paid parental leave and
child support cash benefits.
The 500+ benefit structure is a significant stimulus to long-
-term absence on the labour market. The benefit is being paid until
the child reaches 18 years of age. In combination with the parental
benefit paid since 2016 and covering one year after the birth of
a child, the additional benefit reduces the willingness of parents to
seek work, especially in case of mothers, even if the situation on
the labour market is good. In sum, both benefits can motivate both
to give up work (transition from employment to inactivity); and not
to return to work after the children reach maturity. They also have
an impact on the general tendency among women not to enter into
the regular labour market during the procreation period (change of
cultural pattern?). This is not the case with highly qualified women,
who earn a high income from work and whose condition enables
access to childcare services.
According to preliminary data from the population economic
activity survey (LFS), it is clear that in 2016 about 20–33 thousand
women aged 24–49 left the labour market (Ruzik-Sierdzińska
2017), and when broadening the age range to 18–49, it amounts to
even over 50 thousand (Magda 2017). For these women, the chan-
ces of returning to a good labour market may be limited, and their
future retirement (according to the formula of defined contribution)
will be significantly lower or even may be put in doubt.
Family policy, including the universal 500+ cash benefit, in-
troduced in the period of decreasing supply of “working age”
population also has macroeconomic consequences (Myck 2016).
It contributes to an increase in labour market thighness because the
limited availability of labour resources. For the first time in many
years we can observe In Poland an “employee market”.
CHILD-BEARING DECISIONS
AND THE “FAMILY 500+” BENEFIT
In most Western countries there has been a decline in fertility
(total fertility rate – TFR), explained on the one hand by the process
of demographic change and the entry into the “second demographic
transition” (Kotowska 1999) and on the other by the strive for utility
individualisation in the modern market economy (Becker 1991). It
should be noted that the rapid depreciation of TFR occurred in all
post-communist countries during the transition from a centrally
planned to a market economy in a much shorter time than in the old
capitalist countries (Frątczak et al. 2002).
In Poland the very high fertility characteristic of the post-war
years and the 1950s gradually declined, reaching the average level
for the OECD countries in the 1970s. In the 1990s, it fell significantly
below this level, resulting in demographic imbalance and stabilization,
followed by a decrease in the country’s population (GUS 2016).
The tendency of declining fertility rate (TFR) has contributed in
many countries to the introduction of numerous “pro-family” (fa-
mily friendly) policies, which aim to increase this ratio without
reducing female employment. In these policies, children’s cash be-
nefits appear alongside other instruments, mainly tax exemptions
Social Policy No 1 ENG/2017
 Figure 5. Changes in the fertility rates in OECD countries 1970–2015

2015ա 1995 1970 Population replacement rate

Children per woman
6
5
4
3
2
1
0

Source: OECD Family Database 2017, http://www.oecd.org/els/family/database.htm [accessed on 8.11.2017].

and grants for childcare institutions: nurseries and kindergartens,
as well as social services in schools (Thévenon 2011). The results
of long-term comparative studies show that such comprehensive
programmes implemented consistently in the long run bring some
effects (Gauthier, Hatzius 1997; Gauthier 2007). In the mid-1990s,
the downward trend of the TFR in the old Western countries stopped
and slowly began to change direction, while in Central Europe it
continued to decline, changing its direction only 10 years later
(Billingsley, Ferrarini 2011).
Comprehensive family policy programmes are expensive. The
OECD estimates that the cost of such family policy is 3–4% of GDP.
In Poland, pro-family policy programmes in 2014 reflected only
1.5% of GDP (OECD 2017). The increase in family benefits con-
sisting of both the “Kosiniak benefit” and the 500+ benefit will
double this share. In this respect, Poland will approach the OECD
average (Arak 2016), but with the dominance of one of the
instruments used – money transfers directed to families.
The declared purpose of introducing the 500+ benefit was to
increase procreation. Whether it is a sufficiently effective instru-
ment, taking into account the current trends in family formation and
fertility (Esping-Andersen 2007; OECD Family Database), remains
open. The above mentioned trends, in a very brief manner, can be
characterised by:
– consolidation of a family model with one or two children,
– increased share of unions (matrimonial and partnerships)
without children,
– shortening period of procreation; increasing age of mother
at the birth of her first child,
– increase in the share of childless women from a few to
a dozen percent in the past 20 years,
– a high proportion of homogeneous relationships from the
point of view of education and professional activity3, limiting the
existence of a single bread winner model,
– deterioration of the conditions of young people’s entry into
working life and adulthood (self-employment, precariat),
– increase in the cost of maintenance and education of chil-
dren.
The development of the above listed trends indicates that the
500+ programme can be a motivating tool for having more children
in families with one or two children but this motivation concerns
mainly poorer families, mothers of lower qualification, those who
are less willing to work and have worse opportunities for active
participation in the labour market.
According to previous research conducted in the old EU
member states, the increase in fertility has resulted from the long-
term family-friendly policies being pursued (Esping-Andersen
2007a), and nowadays it is more and more often emphasized, that
such a policy has to be friendly towards the modern woman and
take into consideration her higher qualifications and rights.
CONCLUSIONS
As the preliminary results show, the 500+ benefit:
1) can be a significant tool for reducing the income deficit in
less wealthy families with more children, people living off agricul-
ture, and those coming from rural areas and small towns where
access to work is more difficult;
2) is a response to deprivation in terms of not only basic goods
in these families, but also generally desirable goods; electronic
equipment and one’s own means of transport. This involves pri-
marily TVs, laptops and cars. Poor families used to buy and drive
old cars. The massive use of old cars with poorer technical cha-
racteristics (e.g. with old diesel engines and without filters) contri-
butes significantly to air pollution. It therefore comes as no surprise
that in many western countries, regulations (and subsidies) are put
in place to limit the use of old cars;

Figure 6. Public spending on family benefits by type of expenditures (% of GDP) in OECD countries

% GDP Cash Services Tax-breaks for families

4.5
4,5
4
3.5
3,5
3
2.5
2,5
2
1.5
1,5
1
0.5
0,5
0

Sources: OECD Family Database 2017.

Social Policy No 1 ENG/2017 11

 3) may reduce the professional activity of women with more
children in the family, with less chance for a decent wage. In a coun-
try with a generally low employment rate, this also causes tensions
on the labour market;
4) may contribute to an increase in the rate of fertility mainly in
families who would find it difficult to cope with raising more
children without access to public care and education services.
Without the support of childcare institutions and the social deve-
lopment of school functions, this can lead to unequal life chances
for youth;
5) may in a limited way motivate average and wealthy families
and families where partners are highly qualified to have more
children. This requires an effective package of many pro-family po-
licy instruments (Luci, Thévenon 2013); as well as the presence of
tax instruments and universal access to good quality care, educa-
tion institutions and housing.
Research has shown that subsidies supporting the development
of fully accessible care institutions (Neels, Woods 2013) are the
strongest contributor to the increase in fertility. It is becoming in-
creasingly apparent that there is a positive impact of female-centred
solutions on women’s procreative decisions; this also covers the
organization of health care and work, as well as the friendly attitude
of employers4.
1
http://stat.gov.pl/obszar y-tematyczne/r ynek-pracy/bezrobocie-
rejestrowane [accessed on 27.10.2017].
2
In the USA, for example, the Aid to Families with Dependent Children
(AFDC) program was transformed in 1996, 60 years after implementation,
into a periodic allowance motivating individuals to reconcile work with
raising children (Temporary Assistance for Needy Families Block Grant of
the Personal Responsibility and Work Opportunity Reconciliation Act).
3
The model of one bread winner (male) occurs more frequently in families
where one partner is better educated than the other and has better po-
sition on the labour market (OECD Family Database).
4
In Sweden, a country known for its friendly policy towards families with
two working partners and towards women, women with higher education
show a higher tendency to have three or four children compared to wo-
men with primary education (Esping-Andersen 2007).
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SUMMARY
The article is devoted to the analysis of the preliminary results of the “Family 500+” cash benefit introduced
in Poland in the second quarter of 2016. The results are considered on a theoretical and comparative basis from
the point of view of the politically declared objectives of the cash benefit, especially the radical reduction of child
poverty and the improvement of fertility. The analysis is based on the BBGD unit data (2015 and 2016), EU-SILC
data, including 2016, and data from the OECD database (Family Database). Preliminary results show that the
500+ benefit succeeded in reducing income poverty in many families, improving the structure of consumption for
the needs of the whole family, but, at the same time, increased the tendency of mothers to leave the labour
market, which is a phenomenon that had already started in Poland before the implementation of the 500+
benefit.
Keywords: child poverty, material deprivation, cash benefits, fertility, family friendly policy
Keywords

THE 500+ CHILD BENEFIT SCHEME

AND SOCIAL WELFARE IN POLAND
Elżbieta Bojanowska
Cardinal Stefan Wyszyński University, Warsaw, Poland

INTRODUCTION
Antony Giddens created the concept of ‘the social investment
state’ (Giddens 1998), according to which the support of the
state should be directed in particular towards groups which to
the greatest possible extent guarantee specified, measurable be-
nefits in the future, e.g. towards children. Such investments are
intended to contribute to the growth of their human capital. They
also ought to result in an improvement in their competences
through the acquisition of new qualifications or a change in life-
style, for example. This in turn should reduce the future burden on
the state.
The justification to the 11th of February 2016 State Benefits to
Support Children act1 contains the three goals of the ”Family 500+”
programme:
1) A reduction in the poverty of, in particular large, families. As
shown in the justification to the Act: Families with children are at
a larger risk of poverty compared to families who do not have
dependent children: the percentage of families living below the
relative poverty line among families with at least one child in
the year 2014 was higher than among married couples without
children (6,4% compared to 5,4%) and this increases proportionally
with the number of children in large families and reaches the value
of 24,1% in the case of families with three children and 48,3% in
the case of families with four and more children;2
2) long-term investment in children as a form of investment in
human capital – partial coverage of the expenses of the parents and
guardians of children arising from the high costs of upbringing and
education3;
3) pro-birth – encouragement of decisions to have a larger
number of children in order to revert, or at least hinder unfavourable
demographic processes.
In accordance with the aforementioned Act, the right to child
benefit to the amount of 500 PLN per month (tax-free) has been
given since 1 April 2016 for every second and further child up to
the age of 18. Additionally, parents who meet the income criterion
may also apply for this child benefit for their first child (an only child
or the eldest child in the family up to the age of 18) or one of the
twins as indicated by the authorized person. This means that the
benefit for the first child is social and selective in nature (criterion of
income). However, the benefit for the second and further children
has a common character – it is applicable to all families, regardless
of their income.
In order to receive the benefit for the first or only child, the
income calculated per family member in a calendar year preceding
the period for which the right to the child benefit is determined
cannot exceed 800 PLN net, and if the family has a child with
a moderate or significant disability – 1200 PLN net.
The child benefit is not calculated as part of the family’s income
when applying for other benefits (incl. family benefits, from the
Alimony Fund, from social security, household allowance). Thus,
families receiving the child benefit do not forfeit the right to receive
aid within the scope of other systems.
It should be noted that a family which fulfils the income criteria
may receive aid from several systems simultaneously. Therefore,
a family which fulfils the criterion which grants the right to social
security financial benefits also receives aid as part of family be-
nefits with other allowances. Concurrently, if the family has a child
with a certified disability, such a family may have the right to
a attendance allowance and attendance benefit.
POVERTY IN POLAND IN THE YEAR 2015 AND 2016
According to data provided by the Central Statistics Office (GUS
2017: 12) the minimum subsistence indicators, i.e. the basket of
commodities essential for maintaining human vital functions, as
well as psychological and physical wellbeing decreased compared
with 2015. The scope of poverty in 2015 encompassed 6.5%
of people living below the subsistence minimum and decreased
to 4.9% in the year 2016.

Social Policy No 1 ENG/2017 13

 In the case of the statutory poverty line4 in 2016 an increase of
0.5% was recorded in comparison with 2015 and equalled 12.7%.
Despite the raising of the statutory poverty line, there has been
a decrease in the number of social assistance clients granted be-
nefits by way of an administrative decision from 1,769,402 people
to 1,604,692 people, i.e. by approximately 165 thousand people
(a 9% decrease). Also a decrease has been recorded in the case of
the relative poverty ratio5. In 2015 this ratio equalled 15.5%, while
in the year 2016 it stood at 13.9% (a 1.6% decrease, similarly to
extreme poverty).
According to GUS, the 1 April 2016 implementation of the child
benefit is one of three factors which have mainly contributed to
a reduction in extreme and relative poverty in 2016 among families
with children6.
A reduction in poverty has been especially visible in relation to:
a) children aged 0–17 years old (from 9% in 2015 to 5.8% in
2016);
b) single person households (from 2.5% in 2015 to 2.0% in
2016);
c) families with children:
– with at least 4 children (from 18.10% in 2015 to 14.00% in
2016);
– with 3 children (from 9.00% in 2015 to 4.70% in 2016);
– with 2 children (from 4.00% in 2015 to 2.70% in 2016);
– with 1 child (from 1.80% in 2015 to 1.70% in 2016)7.
A significant decrease in the scope of poverty has been
observed especially among groups such as the following: large
families with three and four or more children to support, households
with disabled family members (from 9.1% in 2015 to 7.5% in
2016), inhabitants of villages (from 11.3% in 2015 to 8.00%
in 2016) and cities below 20 thousand inhabitants (from 5.4% in
2015 to 4.00% in 2016)8.
According to the information provided by Eurostat from October
2017, the risk of poverty and social exclusion in recent years has
seen the largest decrease in Poland – from 30.5% in 2008 to 21.9%
in 2016. Latvia (5.7% decrease) and Romania (5.4% decrease)
also feature in this ranking.
According to estimates by the Ministry of Family, Labour and
Social Policy the share of state budget expenditures on family
policies in the year 2014 and 2015 equalled 1.7% and 1.8% of GDP
respectively. It is estimated that thanks to the implementation of
the ”Family 500+” programme the share of expenditures on fa-
mily policies will record an increase to over 3% of GDP in the
year 2017.
THE FAMILY 500+ PROGRAMME
AND SOCIAL SECURITY BENEFITS
The above information is reflected in statistical data acquired
by the Ministry of Family, Labour and Social Policy. As shown by
departmental report MPiPS-03 on social security benefits granted
– monetary, in kind and services – the number of families with
children receiving social benefits in 2016 decreased by appro-
ximately 12%: from 504,326 families in 2015 to 444,710 families
in 2016. This indicates that 59,616 fewer families with children are
receiving social benefits compared with 2015.
While analysing the types of multi-children families, it should be
noted that in 2016 the largest decrease was recorded among
families with seven and more children (approximately 17%) and
families with five children (approximately 15%). In the case of other
multi-children families a decrease of a similar magnitude was
recorded (approximately 12%).
SOCIAL SECURITY ALLOWANCES
In accordance with the provisions of the 12th of March 2004
Social Security act9, social benefit supports individuals and families
14
in their efforts to meet their essential needs and enabling them to
live in conditions in keeping with human dignity. Depending on their
needs, families within the scope of monetary benefits are entitled
to, among others, periodic benefits and designated benefits.
Entitlement to and payment of the above-mentioned benefits fall
within a commune’s jurisdiction, are mandatory in nature and are
subsidised from the state budget.
Figure 1. The number of families with children
receiving social benefits in the years 2015–2016
637 500
504 326
510 000
444 710
382 500
-12%
255 000
127 500
0
2015 2016
Source:
Assistance in the form of a periodic benefit can be claimed
by families, in particular due to long-term illness, disability and
unemployment. In accordance with the department’s statisti-
cal data, in 2016 an approximately 11% decrease was recorded
in the number of families awarded this form of aid – from 459,828
families in 2015 to 408,075 families in 2016.
In turn, a designated benefit is grated for the purpose of
meeting a necessary existential need and may be given in par-
ticular for the purpose of covering the partial or total costs of
purchasing food, medicine and medical treatment, heating fuel,
clothing or essential household utility items. The number of fa-
milies entitled to a designated benefit in 2016 decreased by ap-
proximately 9% compared to the same value from the year 2015
(from 745,451 in 2015 to 680,206 in 2016 – that is, by 65,245).
Data gathered in 2016 indicates that the number of families
entitled to a designated benefit for the purchase of clothing
decreased by approximately 28% compared to the preceding year
(from 5,109 families in 2015 to 3,660 families in 2016). This
indicates that in the year 2016 1,449 fewer families claimed
a designated benefit for the purchase of clothing than the pre-
vious year.
THE ”STATE NUTRITION ASSISTANCE” GOVERNMENT
PROGRAMME FOR THE YEARS 2014–2020
A significant effect of the ”Family 500+” programme is also
observable in statistics kept in relation to the performance of the
long-term programme for the financial support of communes in
terms of nutrition, the ”State Nutrition Assistance” government
programme for the years 2014–2020. The programme provides
financial support for communes in the execution of their own
mandatory functions in the area of nutrition.
A strategic objective of the programme is to limit the occurrence
of malnutrition among children and adolescents from low income
families or families in difficult circumstances, with particular
emphasis on students in areas affected by a high level of unem-
ployment and rural communities. The number of children claiming
assistance as part of the programme decreased from 916,569 in
2015 to 784,013 in 2016. This means that in 2016 132,556 fewer
children took advantage of the programme compared with the
preceding year (a decrease of 14.5%).
Social Policy No 1 ENG/2017
 Figure 2. The number of families who claimed aid in the form Figure 3. The actual number of children covered by the ‘State
of a designated benefit for the purchase of clothing. Nutrition Assistance’ government programme
Comparison of data for the years 2015–2016 in the years 2015–2016

6 000 1 000 000

5 109 916 569
784 013
4 500
3 660 750 000
28% -14,5%
-14,5%
3 000

500 000
1 500

250 000
0
2015 2016

NUMBER OF FAMILIES AFFECTED BY VIOLENCE 0

The implementation of the child benefit has resulted in an
improvement in the material and living conditions of many Polish
families, including those affected by the issue of violence. The
financial aid provided within the scope of the ”Family 500+”
programme has resulted in a decrease in the number of families
affected by violence due to lack of financial resources. According to
the collected data, in 2016 there was a 1,616 decrease in the
number of such families when compared with the data from 2015,
which is approximately 8.6%.
NUMBER OF FAMILIES ENTITLED TO ASSISTANCE
IN THE FORM OF SOCIAL WORK
2015 2016
the standard of living for Polish society, with a particular emphasis
on families with children.
Improvements within the labour market and increases in
remuneration are also of key importance. Neither should the role of
social policy in general, and the ”Family 500+” programme in
particular, which at a normative level considers children as a ‘col-
lective public good’ be understated either. Concurrently, the support
received in the form of this form of child benefit has resulted in
many families achieving greater self-reliance, inter alia by becoming
less dependent on social security benefits.

Social work is somewhat different in character when viewed in

1
Journal of Laws 2016, pos. 195 as further amended.
the context of other social security benefits. In accordance with the
2
Justification to the State Aid for Child-Support act (p. 4) based on GUS
(Central Statistical Office) 2015.
social welfare act, social work is provided for the purpose of 3
Ibid., p. 7.
improving the functioning of individuals and families in their social 4
The statutory poverty line is specified as a sum which, in accordance
environment. with the applicable social assistance act, entitles someone to apply for
The primary objective of conducting social work is to develop monetary benefits from social security.
and strengthen the activity and self-sufficiency of individuals and 5
The relative poverty line is specified as 50% of the average expenses of
families. Contrary to the forms of assistance mentioned above, in an average household (calculated based on the results of a study on
2016 a 2.3% increase in the number of families assisted by social household budgets).
work was recorded (i.e. 4,742 families more than in the year 2015).
6
Ibid.
7
Ibid., p. 5.
The implementation of the ”Family 500+” programme has resulted 8
Ibid., p. 1–7.
in families with children striving towards greater self-sufficiency 9
Journal of Laws 2017, pos. 1769.
and forgoing social assistance thanks to an improvement in their
material and living circumstances. Thus, social workers are able to
REFERENCES
concentrate their efforts on families that require significant support
in improving their situation. Giddens A. (1998), The Third Way, Cambridge.
GUS (2015), Ubóstwo ekonomiczne w Polsce w 2014 r. [Economic poverty
in Poland in 2014], Warsaw.
CONCLUSION GUS (2017), Zasięg ubóstwa ekonomicznego w Polsce w 2016 r. (na pod-
stawie badania budżetów gospodarstw domowych) [The scope of
The long-term social policy in terms of counteracting the economic poverty in Poland in 2016 (based on a study of household
effects of poverty in recent years has resulted in an improvement budgets)], Warsaw.

SUMMARY
The Act of 11 February 2016 on state aid in raising children introduced the right to untaxed child benefits
of PLN 500 per month, which is granted to each second and subsequent child until they are 18 years of age.
This benefit is an investment that is intended to increase human capital and support families in ensuring their
children’s safety and favourable conditions for raising children, and thus aims to reduce the phenomenon of child
poverty.
Keywords: child benefit 500+, family, poverty, social assistance, social work
Keywords

*
* *

Social Policy No 1 ENG/2017 15

THE IMPACT OF “FAMILY 500+” PROGRAMME
ON HOUSEHOLD INCOMES, POVERTY AND INEQUALITY
INTRODUCTION
The 11th of February 2016 State Aid for Child-Support Act has
introduced a child-support benefit in the amount of 500 PLN for the
second and subsequent children up to the age of 18 years old (the
so called “Family 500+” programme) into the Polish family support
system. After fulfilling the income criterion, the benefit is also
granted for the first child. The objective of the programme is “above
all financial aid directed towards families raising children”, which is
intended to reduce the financial burden of families associated with
child-care, thereby encouraging decisions to have a larger number
of children1.
The “Family 500+” programme constitutes a significant expan-
sion of the existing system of family support. It functions separately
from the already existing forms of aid, and the child-support benefit
is granted independently from transfers such as family allowances
or social assistance benefits. The implementation of the programme
has raised the total value of already existing financial aid for families
by approximately 140%.
According to information from the Ministry of Family, Labour
and Social Policy, in May 2017 the programme covered 3,97 mil-
lion children (58% of all children up to the age of 18 in Poland) from
over 2,6 million families2. Nearly 60% of families receives the
benefit for their first or only child. This applies to over 1,56 million
children, of which 724 thousand are only children.
Since the programme’s commencement (1st of April 2016) until
May 2017 the total sum of aid received by families exceeded
27,2 billion PLN. Approximately 22,9 billion of that sum has been
transferred to families within the first year of the program’s
functioning (by the end of March 2017)3. The total handling costs
of the programme until May of 2017 equalled to 455 million PLN4.
The “Family 500+” programme has significantly affected the
distribution of income in Poland. The aim of this paper is to estimate
the short-term impact of this program on the distribution of income
and expenditures of households, as well as on poverty and ine-
quality. The object of analysis is poverty in general, as well as the
poverty of children and poverty by different types of households.
The paper also attempts to estimate the impact of certain
modifications to the “Family 500+” programme, as well as, e.g. the
implementation of an “upper limit” income criterion, which, when
exceeded, results in the complete withdrawal of the child-support
benefit. Compared to prior studies of this type (Goraus, Inchauste
2016; Inchauste et al. 2016; Szarfenberg 2017), this paper presents
an analysis of the significance of obtained results depending on the
application of different equivalence scales, which enable a com-
parison of the income and expenditures of households of various
sizes and in various socio-demographic compositions.
The data set in relation to which the impact of the “Family
500+” programme is studied, is the representative database de-
rived from the Household Budgets Survey (BBGD) by GUS (Central
Statistics Office) from 2015. This data set contains information
regarding 101 076 individuals in 37 148 households. The BBGD
weights made available by GUS have been adjusted by the structure
of populace residing within the territory of Poland in 2015 and
many other characteristics, in order for the aggregated results to as
best as possible reflect information available in administrative data
(Myck, Najsztub 2015)5. Individual income has been converted for
microsimulation purposes from net income to gross income.
16
Michał Brzeziński
University of Warsaw, Poland
Mateusz Najsztub
Centre for Economic Analysis, Szczecin, Poland
The basis for distributional analyses are the results of the
SIMPL static microsimulation model (e.g. Bargain et al. 2007; Mo-
rawski, Myck 2010, 2011; Myck 2009; Domitrz et al. 2012). This
means that only the direct impact of reforms on the budget of
households is taken into consideration, without considering the
effects on labour supply.
The base system consists of a tax-benefit system applicable in
2015, expanded by the “złotówka za złotówkę” (a zloty for a zloty)
solution for family benefits.
The reformed system originated as a result of expanding the
base system with the “Family 500+” reform in the wording finally
passed by the Polish Sejm. The basis for analyses constitute the
disposable income of households reported by GUS and the dispo-
sable income of households simulated within the model. The dispo-
sable income in the reformed system is calculated as simulated
income according to the reformed system less the simulation error,
i.e. difference between disposable income according to GUS and
the simulated disposable income according to the base system for
2015, without taking into consideration the “Family 500+” solution.
Thanks to this approach it is possible to rank the income according
to the GUS definition, while simultaneously utilizing the simulation
results.
RULES AND STRUCTURE
OF THE “FAMILY 500+” PROGRAMME
The child-support benefit in the amount of 500 PLN is granted
to parents, legal guardians or de facto carers, regardless of the
family’s income, for the second and subsequent children up to the
age of 18 years old. In the event of fulfilling the income criterion –
income below 800 PLN net per person or 1200 PLN net in case of
raising a disabled child – the benefit may also be received for the
first or only child in the family. The benefit also applies to children
raised in family orphanage, foster families, and education and care
centres.
Fulfilment of the income criterion is verified on the basis of the
same income category which is applied when granting a family
allowance. In the first allowance period (from the 30th of September
2017) fulfilment of the income criterion occurs on the basis of
income from the year 2014, applying the regulations on loss or
acquisition of income. The project also provides for verification of
the income criterion every 3 years – with the first verification to take
place on the 1st of October 2019.
The programme’s structure does not contain an upper income
criterion which would determine the income level of a family which,
when exceeded, would result in the benefit being partially or wholly
revoked. After the completion of a 3 year period from the imple-
mentation of the programme the Council of Ministers is to present
a proposal to introduce a fixed uprating mechanism for the amount
of the child-support benefit, as well as the income criteria.
The child-support benefit may be granted in a non-monetary
form in the event of wastefulness or expenditure contrary to the
intended purpose. It is exempt from taxation and is not calculated
as part of the income which decides of granting family benefits,
housing allowances and social assistance benefits.
The “Family 500+” programme, therefore, functions indepen-
dently from existing family support institutions, such as the family
benefit system and the PIT system tax credit. Compared to the
Social Policy No 1 ENG/2017
family benefit system, the 500+ child-care benefit is granted in
accordance with separate and distinctive age criteria for children
entitled to receive it. There are also other income criteria which
determine whether a family is entitled to receive the child-care benefit.
Thereby, the Polish system of financial aid for families now
features two active administratively and legally independent instru-
ments which serve practically the same purpose. Apart from
complications for families, this also results in additional admini-
strative costs6.
Additional doubts may also arise from the fact that the structure
of the “Family 500+” programme does not provide for higher be-
nefits for children of single parents, although the costs of upbringing
children in such families are proportionally higher compared to full
families. The benefits for families with disabled children within the
programme arise only by way of the higher income threshold for
the first or only child – the child-care benefit amount for disa-
bled children is the same as for fully able ones. Finally, the benefit
amount is independent from the child’s age, even though the costs
of upbringing raise with its age (which is taken into consideration,
for example, in the structure of the family welfare system).
Apart from the direct impact on increasing the income of house-
holds with children and reducing poverty and inequality in society,
the “Family 500+” programme may also have significant con-
sequences in other areas. Empirical studies conducted for other
countries show that financial transfers for families with children
may have a positive impact on health, educational results, higher
employment and higher pay achieved by such children in the future
(Aizer et al. 2016; Carneiro et al. 2015).
On the other hand, the structure of the “Family 500+” pro-
gramme, especially the relatively high benefit amount (approx.
12% of the average gross wage in 2016) and threshold based
benefit revocation for the first child may create disincentives to
undertake or continue employment, especially in the case of
parents with low income (Blundell et al. 2000; Haan, Myck 2007;
Haan, Wrohlich 2011).
The threshold based revocation of the benefit means that if the
income per family member exceeds the income criterion adopted in
the programme (800 PLN per person or 1200 PLN per person, if the
family is raising a disabled child), single child families completely
forfeit support arising from the child-care benefit, while families
with a larger number of children receive the benefit only for the
second and subsequent children. Thereby, families with income per
person below 800 PLN receive aid 500 PLN per month higher com-
pared to families with income monthly even minimally exceeding
800 PLN per family member.
The significance of threshold based revocation of the benefit for
the first child for the income level with one, two and three children
is presented in Figure 1. It illustrates the relation between the gross
income from employment and the disposable income in the case of
selected types of families. “System 2015” diagram in the figure
corresponds to the tax-benefit system, in which the “Family 500+”
programme is not in effect, while the “System 2015 with 500+”

Figure 1. Relation of gross income and disposable income arising from the “Family 500+” programme for different types of families
A. Single parent with one child B. Married couple with one child

 
'RFKyGGRG\VSR]\FML]áPLHVLąF
'RFKyGGRG\VSR]\FML]áPLHVLąF

 
Disposable income PLN/month

Disposable income PLN/month

 

 

 

 
           
'RFKyGEUXWWR]áPLHVLąF
Gross income PLN/month 'RFKyGEUXWWR]áPLHVLąF
Gross income PLN/month
6\VWHP 6\VWHP]
System 2015 with 500+ 6\VWHP 6\VWHP]
System 2015 with 500+

C. Married couple with two children D. Married couple with three children



'RFKyGGRG\VSR]\FML]áPLHVLąF


'RFKyGGRG\VSR]\FML]áPLHVLąF


Disposable income PLN/month


Disposable income PLN/month






 

 
           
'RFKyGEUXWWR]áPLHVLąF
Gross income PLN/month 'RFKyGEUXWWR]áPLHVLąF
Gross income PLN/month
6\VWHP System 2015 with 500+
6\VWHP] 6\VWHP 6\VWHP]
System 2015 with 500+

Note: The assumption of one working parent has been adopted.

Source: own calculations based on data from BBGD 2015.

Social Policy No 1 ENG/2017 17

diagram shows a tax-benefit system taking this programme into
consideration.
In the case of a single parent with one child, aid from the child-
care benefit is revoked completely in the event of gross income
from employment exceeding 2000 PLN per month. In the case of
married couples with one child, complete revocation of the bene-
fit is effected when income exceeds 3140 PLN gross per month.
For married couples with two children where gross income from
employment exceeds 4160 PLN, the amount of child-care benefit is
limited to 500 PLN per month. In the case of married couples with
three children achieving gross income from employment equal to at
least 5070 PLN per month, support from the “Family 500+” pro-
gramme is limited to 1000 PLN per month. In such situations higher
employment income leads to a reduction of disposable income,
which may result in limiting the occupational activity in families with
two working parents – i.e. to one of them resigning
Figure 2 presents a combination of monthly gross income from
the parents’ employment and information (diagonal lines) regarding
the eligibility to receive the child-care benefit for the first child for
families with one or more children. The figure shows, for example,
that in the case of married couples with one child the child-care
benefit is not granted to any family in which both parents work full
time (both parents receiving a minimum wage of 1850 PLN gross
in 2016), as the family’s net income equals 2804 PLN per month,
which is 935 PLN per person. If one of the parents receives
employment income similar to the average income in the national
economy and the second receives the minimum wage, such a
family shall receive a child-care benefit for the first child, if they
have five or more children in total.
Figure 2. Gross income of parents and eligibility
for the child-care benefit for the first child

'RFKyGEUXWWRGUXJLHMRVRE\]áPLHVLąF

Gross income of the second parent PLN/month








  
'RFKyGEUXWWRSLHUZV]HMRVRE\]áPLHVLąF
Gross income of the first parent PLN/month
Clarification: The short, broken line shows the minimum wage level (equal to 1850
PLN in 2016), while the long broken line shows the average monthly remuneration level
in the national economy in 2016 (4277 PLN). The dotted line presents the proposed
minimum wage level for 2018 (2080 PLN). The definition of a child as per the family
benefit act is applied.
Source: as per Figure 1.
Figures 1 and 2 illustrate that threshold based withdrawal of
the child-care benefit may have negative consequences on the
occupational activity of parents. Simulations based on estimating
the labour supply when applying the discrete choice model show
that ceteris paribus the “Family 500+” programme may lead to
the withdrawal from the labour market of approximately 235
thousand individuals (Myck 2016). A significant majority of such
individuals are women (230 thousand) in families with one or two
children, living in rural areas or small towns. The exit from
employment may also apply to approximately 25 thousand single
parents.
18
The reduction of employment may result in an increase of the
actual costs of the “Family 500+” programme for the public finan-
ce sector in the long term through lowering the tax revenue and
social security contributions. A reduction of market revenues in
families reducing the labour supply may lead to a larger number of
child-care benefits paid out for the first or only child, as well as an
increase in expenditures arising from family benefits.
It appears that a rational move for the future would be to
combine elements of the “Family 500+” programme with the cur-
rently existing system of family benefits into a singular family
support instrument. A proposal of this type of synthesis is presen-
ted in the study by Myck et al. (2015) as an integrated family benefit
(IFB)7. A reform of this type would simplify the support system
from the perspective of families and provide savings arising from
a reduction of administrative costs.
An integrated family benefit would introduce a consolidated age
criterion for children covered with the financial aid, a single income
threshold and gradual withdrawal of benefits, which would limit the
negative impact of the support system on the parents’ occupational
activity in the labour market. It would also increase the benefits to
families with low income, which would contribute to a larger redu-
ction of poverty and inequality. The IFB could be further expanded
by an additional support mechanism for families in which both
parents are professionally active (Myck et al. 2013). Such an expan-
sion would to a further degree limit the negative impact of reform
on the parents’ employment.
THE IMPACT OF THE “FAMILY 500+” PROGRAMME
ON THE INCOME OF HOUSEHOLDS
Table 1 illustrates the short-term annual income benefits from
the “Family 500+” programme for households according to in-
come decile groups, calculated for equivalent income. The equi-
valization has been done using the original OECD equivalence

 scale. This scale assigns a weight of 1 to the first person in the
household aged 14 or above, 0,7 – to any subsequent person aged

14 or more and a weight of 0,5 to any child below the age of 148.

The total annual cost of the program’s operation has been estimated

at 24,9 billion PLN. The value of all equivalence scales applied in
 this article is presented in table 1. It also contains the values of
income thresholds for decile groups according to various types of
households.
The highest income benefits, absolute as well as proportional
to income, fall to households in the first and second income de-
cile group. The poorest 20% of households receive 42% of the
total financial aid within the scope of the “Family 500+”
programme. Higher absolute income benefits for households in the
lower bracket of equivalent income distribution arise from the
concentration of families with a larger number of children in the
  
lower bracket of income distribution, as well as the income criterion
which limits eligibility to child-care benefits for the first child in
wealthier families.
The income benefits for “higher” decile groups are decreasing,
with the exception of the tenth group, for which they are mini-
mally higher than for the ninth group. Households classified as the
wealthiest 40% receive 5,1 billion PLN annually, which is 20,5%
of the total support within the scope of the “Family 500+”
programme.
The gains from the introduction of the child-care benefit for
households with children until 18 years of age are illustrated
in table 3. The biggest absolute gains – on average 275 PLN
per month in the equivalent income categories – are felt by
households with children in the second decile group, while the
lowest – on average 79 PLN per month – by households in
the ninth decile group. Proportionally to the equivalent income, the
highest gains are felt by the poorest households with chil-
dren, while the lowest gains – by households with the highest
income.
Social Policy No 1 ENG/2017
 Table 1. Value of the equivalence scale and income thresholds for the income decile groups
Specification Types of households
Number of people aged >14 1 1 1 2 2 2 2 2 3 3 3
Number of people aged <15 0 1 2 0 1 2 3 4 1 2 3
Original OECD scale 1 1,5 2 1,7 2,2 2,7 3,2 3,7 2,9 3,4 3,9
Modified OECD scale 1 1,3 1,6 1,5 1,8 2,1 2,4 2,7 2,3 2,6 2,9
Square root scale 1 1,41 1,73 1,41 1,73 2 2,24 2,45 2 2,24 2,45
Subjective scale 1 1,37 1,65 1,42 1,68 1,79 1,88 - - - -

2 862 791 656 900 875 760 620 578 736 693 616
3 1 100 1 077 705 1 176 1 190 1 006 798 678 917 862 765
4 1 288 1 240 811 1 390 1 446 1 222 945 724 1 092 1 034 882
5 1 439 1 369 936 1 585 1 663 1 428 1 112 806 1 267 1 172 1 059
6 1 600 1 501 1 050 1 777 1 895 1 667 1 255 938 1 438 1 373 1 154
7 1 794 1 794 1 713 2 134 1 997 2 182 1 912 1 479 1 041 1 645 1 550
8 2 019 2 019 2 052 2 495 2 280 2 526 2 284 1 787 1 149 1 888 1 765
9 2 434 2 434 2 333 3 004 2 684 3 085 2 863 2 271 1 376 2 221 2 147
10 3 195 3 195 3 290 3 978 3 520 4 065 3 920 3 133 1 913 2 911 2 842
Note: A household is assigned to the decile group x, if its disposable income exceeds the threshold for group x and is lower than the threshold of group x+1. The values of the
subjective scale have been estimated only for certain types of households and are derived from the studies by Kalbarczyk-Stęclik et al. (2017), Miśta and Morawski (2016), Morawski
(2016). The values of income thresholds for decile groups have been calculated using the original OECD scale.

Table 2. Annual benefits for households arising from the “Family 500+” programme according to income decile groups
Average income without the Average income with the Change in income Percentage change in Total annual benefits
Income decile groups
Child-care benefit child-care benefit (PLN/month) income (PLN billions)
1 302,3 416,8 114,5 37,9 4.9
2 813,5 928,8 115,3 14,2 5.1
3 1 019,3 1 101,1 81,8 8,0 3.8
4 1 212,5 1 265,4 52,8 4,4 2.7
5 1 395,7 1 433,2 37,5 2,7 2.0
6 1 593,1 1 620,8 27,8 1,7 1.5
7 1 829,7 1 853,5 23,8 1,3 1.3
8 2133,8 2 155,3 21,5 1,0 1.2
9 2 659,1 2 679,4 20,3 0,8 1.1
10 4 966,3 4 993,2 26,8 0,5 1.4
Note: equivalent income, original OECD scale.
Source: as per Figure 1.

Table 3. Annual benefits for households with children arising from the “Family 500+” programme according to income decile groups
Average income without the Average income with the Change in income
Income decile groups Percentage change in income
Child-care benefit child-care benefit (PLN/month)
1 348,5 612,5 264,0 75.8
2 811,1 1 085,7 274,6 33.9
3 1 018,4 1 245,3 226,9 22.3
4 1 210,1 1 380,0 169,9 14.0
5 1 391,8 1 522,0 130,2 9.4
6 1 589,3 1 698,7 109,4 6.9
7 1 831,3 1 924,8 93,5 5.1
8 2 139,9 2 224,8 84,8 4.0
9 2 670,1 2 749,3 79,2 3.0
10 4 872,7 4 957,0 84,3 1.7
Note: equivalent income, original OECD scale.
Source: as per Figure 1.

IMPACT OF THE PROGRAMME ON INCOME
AND CONSUMPTION POVERTY
The short-term impact of the “Family 500+” programme on
relative income poverty and extreme consumption poverty shall be
analysed for the income and expenditures of households equalized
using various equivalence scales. As shown by prior studies (see,
e.g. Buhmann et al. 1998, Kalbarczyk-Stęclik et al. 2017), poverty
measures and ranking of socio-economic groups according to
poverty rates vary in a significant way depending on the adopted
equivalence scale.
Economic literature does not provide explicit arguments in fa-
vour of choosing the best scale, rather recommending a comple-
mentary application of various equivalence scales and verification
whether the results of distribution analyses are independent of the
choice of scale (Coulter et al. 1992; Garner, Short 2003). As a re-

Social Policy No 1 ENG/2017 19

sult, in the article’s analysis of the “Family 500+” programme’s
impact on poverty and inequality is conducted using the following
equivalence scales: the original OECD scale, modified OECD scale,
square root scale and subjective scale.
Both OECD scales belong to so called expert scales, whose
values are determined by experts and the marginal upkeep cost of
additional individuals in the household is independent from the size
of the household (see Table 1). The original OECD scale is used,
among others, in GUS studies regarding poverty in Poland (see, e.g.
GUS 2017b).
The studies of the “Family 500+” programme’s impact on
poverty and inequality in Poland conducted so far have incorpora-
ted only the original OECD equivalence scale (see Goraus-Tańska,
Inchauste 2016). The modified OECD equivalence scale is com-
monly used in income and expenditure distribution analyses, as
well as GUS analysis of BBGD data.
The simple square root scale, which is often used in interna-
tional comparative studies, adopts values equal to the square root
of the total number of household members. On the other hand the
subjective equivalence scale is estimated on the basis of declara-
tions from various types of households with the minimum income
necessary to “make ends meet” (Bishop et al. 2014; Kalbarczyk-Stę-
clik et al. 2017).
The subjective scale has only recently been gaining popularity
among researchers – its advantages include, among others, the
fact that it adopts different values for different countries, which allows
to partially take into consideration the difference in cultural factors
influencing the subsistence costs of additional people in the house-
hold. The values adopted by subjective equivalence scales are
usually, also in the case of Poland, lower than values adopted by
other scales. This means that the subjective scales implicate hig-
her benefits of scale within a household and lower marginal costs
of a child’s upkeep in the household.
The short-term impact of the “Family 500+” programme on
relative income poverty according to household types and depen-
ding on equivalence scale is illustrated in table 4. Within the entire
population as well as among households with children the introdu-
ction of the child-care benefit results in a significant reduction in
relative income poverty.
Within the entire group of households with children, regardless
of the choice of equivalence scale, the level of relative income
poverty after the introduction of the benefit is reduced below the
level of poverty characteristic of the entire population, as well as
individuals living alone. The rates of poverty decrease significantly
regardless of the number of children in a household – for the
modified OECD scale and square root scale the final poverty rate for
households with four and more children is also lower than the po-
verty rate for the entire population, as well as individuals living alone.
The percentage changes to relative income poverty as a result
of introducing the child-care benefit are shown in Figure 3. Among
the entire population, regardless of the applied equivalence scale,
the introduction of the child-care benefit reduces the relative
income poverty by approximately 30–33% (e.g. from 18.5% to
12.3% in the case of the original OECD scale). In the population of
children this reduction reaches 64–71%, while for single parents -
75–89%. The comparatively lowest relative reduction in income
poverty applies to households with one child – it fluctuates between
34% and 41%.

Table 4. Impact of the “Family 500+” programme on the rate of relative income poverty depending on the adopted equivalence scale, in %
Original OECD scale Modified OECD scale Square root scale
Type of household before 500+ after 500+ before 500+ after 500+ before 500+ after 500+
in %
All 18.5 12.3 17.8 12.3 17.5 12.2
Individuals living alone 11.1 11.1 18.4 18.4 26.0 26.0
Couple without children 9.7 9.7 9.9 9.9 12.1 12.1
Individuals living alone aged 65+ 5.7 5.7 14.5 14.5 24.1 24.1
Households with children 23.4 10.4 20.2 8.6 18.2 7.1
Single parents 22.7 2.4 20.0 2.7 35.1 8.6
Households with 1 child 17.9 11.8 16.9 10.5 15.7 9.3
Households with 2 children 24.1 8.8 19.9 7.2 18.0 6.0
Households with 3 children 32.3 8.4 26.2 5.3 22.7 3.3
Households with 4+ children 61.3 15.4 48.7 6.9 39.2 1.3
Children 24.0 8.6 12.7 4.3 8.5 2.5
Note: The poverty line is equal to 60% of the median equivalent income.
Source: as per Figure 1.

Figure 3. Percentage reduction in the rate of relative income poverty as a result of the “Family 500+” programme depending
on the applied equivalence scale (by household type)

100
90
80
Decrease in poverty (%)

70
60
50
40
30
20
10
0
All Households with Single parents Households with Households with Households with Households with Children
Wszystkie Gospodarstwa
children
z Samotni rodzice Gospodarstwa
1 child
z 1 Gospodarstwa
2 children
z 2 Gospodarstwa
3 children
z 3 Gospodarstwa
4+ children
z Dzieci
dzieümi dzieckiem dzieci dzieci 4+ dzieci

Oryginalna skala
Original OECD scaleOECD Zmodyfikowana skala OECD
Modified OECD scale Skala
Squarepierwiastkowa
root scale

Source: as per Figure 1.

20 Social Policy No 1 ENG/2017

 Compared to monetary based child-support systems in other
countries, the “Family 500+” programme rather significantly redu-
ces relative income poverty. The study conducted by Popowa (2016)
indicates that monetary transfers for children in Belgium, Sweden,
Germany, Great Britain and Russia have in 2010 reduced relati-
ve income poverty of the entire population in a range from 2% to
29,8%, while child poverty – in a range from 5 to 58.1%. Simul-
taneously, the “Family 500+” programme is characterized by
moderate vertical effectiveness (percentage of the total programme
budget which reaches the poor). In the case of the “Family 500+”
programme this indicator is 37.3% while for similar benefits in
Great Britain it has reached a value of up to 57.2%.
Results related to the impact of introducing the child-care be-
nefit on the rate of extreme income poverty are presented in tables
5–7 and Figures 3–4. In order to evaluate the impact of the “Family
500+” programme on extreme income poverty, in accordance with
prior literature (Goraus-Tańska, Inchauste 2016), two scenarios
have been assumed:
1) increasing family’s expenditures by the total amount of the
income arising from the child-care benefit (tab. 5–6 and Figure 3);
2) increasing a family’s expenses by a part of the amount equal
to the share of expenses in a household’s income prior to imple-
mentation of the reform (Table 7 and Figure 4)9.
Table 5 and Figure 3 show that in the case of a scenario of
spending the entire child-care benefit for consumption the rate of
extreme consumption poverty within the entire population de-
creases in a range from 35% to 47%, depending on the applied
equivalence scale. Results for the square root scale illustrate

Table 5. Impact of the “Family 500+” programme on the rate of extreme consumption poverty (various equivalence scales)
– scenario of allocating the entire child-care benefit to expenses, in %
Original OECD scale Modified OECD scale Square root scale
Type of household before 500+ after 500+ before 500+ before 500+ after 500+ before 500+
in %
All 8.1 4.3 3.5 1.9 1.7 1.1
Individuals living alone 3.9 3.9 3.9 3.9 3.9 3.9
Couple without children 3.5 3.5 2.0 2.0 1.6 1.6
Individuals living alone aged 65+ 3.1 3.1 3.1 3.1 3.1 3.1
Households with children 10.2 2.0 3.8 0.3 1.3 0.0
Single parents 3.2 0.2 1.2 0.2 1.3 0.2
Households with 1 child 7.4 2.8 2.7 0.6 1.1 0.1
Households with 2 children 9.8 1.7 4.0 0.0 1.6 0.0
Households with 3 children 14.9 0.1 3.3 0.0 1.3 0.0
Households with 4+ children 36.1 0.3 15.7 0.3 1.5 0.0
Children 10.0 1.3 3.6 0.2 1.3 0.0
Note: the poverty line is equal to the subsistence minimum for a single employed person household in 2015 (545,76 PLN).
Source: as per Figure 1.

Figure 4. Percentage decrease of the extreme consumption poverty rate as a result of the “Family 500+” programme depending
on the equivalence scale (by household type) – scenario of spending the entire child-care benefit on consumption

100
90
Decrease in poverty (%)

80
70
60
50
40
30
20
10
0
All
Wszystkie Households withz
Gospodarstwa Single parents
Samotni Households with
rodzice Gospodarstwa Households with
z 1 Gospodarstwa Households with
z 2 Gospodarstwa Households withz
z 3 Gospodarstwa Children
Dzieci
children 1 child 2 children 3 children 4+ children
dzieümi dzieckiem dzieci dzieci 4+ dzieci

Oryginalna skala
Original OECD scaleOECD Zmodyfikowana
Modified skala OECD
OECD scale Skala
Squarepierwiastkowa
root scale

Source: as per Figure 1.

Table 6. Impact of the “Family 500+” programme on the rate of extreme consumption poverty (scenario of allocating
the entire child-care benefit to expenses) – comparison taking into account the subjective equivalence scale, in %
Original OECD scale Modified OECD scale Square root scale Subjective scale
Type of household before 500+ after 500+ before 500+ after 500+ before 500+ after 500+ before 500+ after 500+
in %
Single parent with 1 child 2.4 0.3 1.5 0.3 1.8 0.3 1.5 0.3
Single parent with 2 children 2.4 0.0 1.0 0.0 1.0 0.0 1.0 0.0
Two adults + 1 child 2.4 0.3 0.9 0.0 0.7 0.0 0.4 0.0
Two adults + 2 children 4.6 0.0 1.5 0.0 1.0 0.0 0.8 0.0
Two adults + 3 children 9.2 0.0 1.5 0.0 0.8 0.0 0.6 0.0
Note: the poverty line is equal to the subsistence minimum for a single employed person household in 2015 (545,76 PLN).
Source: as per Figure 1.

Social Policy No 1 ENG/2017 21

complete elimination of extreme poverty in households with chil-
dren and among children, while results incorporating other scales
suggest a decrease in extreme poverty among those groups in
a range from 80% to 94%10. A clearly smaller reduction of extreme
poverty is visible only in the case of households with one child
(a decrease by 62% when using the original OECD scale).
It is worth noting that the estimations of poverty rates for
households with children (before considering aid from the child-
care benefit) are clearly lower for the modified OECD scale and
square root scale, compared to the original OECD scale. In the case
of households with four and more children the rate of extreme
poverty by expenses equalized using the original OECD scale is
36.1%, while in the other two cases it is 15.7% (modified OECD
scale) and only 1.5% (square root scale).
Similarly low extreme poverty rate values among households
with children as in the case of applying the square root scale are
achieved when using the subjective scale (Table 6). Among the
applied equivalence scales, the original OECD scale provides for the
lowest economies of scale in a household and highest marginal
cost of child upbringing in a household.
On the other hand, the subjective scale estimated based on
declarations of households with the minimum income necessary to
“make ends meet” implies, in the case of Poland, higher economies
of scale and a lower marginal cost of child upbringing (see Kalbar-
czyk-Stęclik 2017 and Table 1). Application of the subjective equiva-
lence scale, therefore, leads to results presenting lower poverty rates
among households with a larger number of members (including chil-
dren) as compared to households with a lower number of members.
Those results suggest that often quoted opinions regarding the
immensely high degree of extreme poverty among Polish children
prior to the introduction of the “Family 500+” programme could
have been based on studies incorporating only the original OECD
equivalence scale.
It seems that in the future analyses and studies of poverty by
household types in Poland should incorporate various types of
equivalence scales (including the subjective scales).
As shown in Table 5, after implementation of the “Family 500+”
programme the rates of extreme consumption poverty among
households with children have decreased below the levels reached
by households of persons living alone and childless couples11.
This conclusion is independent from the equalisation method
of household income. This means, that after introduction of the
child-care benefit the objective of social policy preventing extre-
me poverty should probably rather be households with fewer
members (single-person, childless couples, married couples with
one child).
Table 7 and Figure 5 present the impact of the “Family 500+”
programme on extreme consumption poverty with the assumption
that households spend only part of the child-support benefit, equal
to the expenditures to income ratio from the period prior to intro-
duction of the benefit. In this case the reduction of extreme poverty
is obviously smaller than in the case of spending the entire benefit
amount on consumption. The extreme poverty rate within the entire
population has seen a decrease in a range from 35% to 40% de-
pending on the applied equivalence scale. In the case of children
this reduction ranges from 75% to 92%.

Table 7. Impact of the “Family 500+” programme on the rate of extreme consumption poverty (various equivalence scales)
– scenario of spending a part of the child-care benefit equal to the expenditures to income ratio of a household, in %
Original OECD scale Modified OECD scale Square root scale
Type of household before 500+ after 500+ before 500+ before 500+ after 500+ before 500+
in %
All 8.1 4.9 3.5 2.2 1.7 1.1
Individuals living alone 3.9 3.9 3.9 3.9 3.9 3.9
Couple without children 3.5 3.5 2.0 2.0 1.6 1.6
Individuals living alone aged 65+ 3.1 3.1 3.1 3.1 3.1 3.1
Households with children 10.2 3.3 3.8 1.0 1.3 0.1
Single parents 3.2 0.2 1.2 0.2 1.3 0.2
Households with 1 child 7.4 3.8 2.7 1.3 1.1 0.2
Households with 2 children 9.8 3.2 4.0 0.9 1.6 0.0
Households with 3 children 14.9 1.7 3.3 0.3 1.3 0.1
Households with 4+ children 36.1 2.5 15.7 0.3 1.5 0.0
Children 10.0 2.5 3.6 0.7 1.3 0.1
Note: the poverty line is equal to the subsistence minimum for a single employed person household in 2015 (545,76 PLN).
Source: as per Figure 1.

Figure 5. Percentage decrease in the rate of extreme consumption poverty as a result of the “Family 500+” programme depending
on the equivalence scale (by household type) – scenario of spending a part of the total child-care benefit

100
90
Decrease in poverty (%)

80
70
60
50
40
30
20
10
0
All
Wszystkie Households withz Samotni
Gospodarstwa Single parents Households with
rodzice Gospodarstwa Households with
z 1 Gospodarstwa Households with
z 2 Gospodarstwa Households with
z 3 Gospodarstwa z Children
Dzieci
children 1 child 2 children 3 children 4+ children
dzieümi dzieckiem dzieci dzieci 4+ dzieci

Oryginalna skala
Original OECD scaleOECD Zmodyfikowana
Modified skala OECD
OECD scale Skala
Squarepierwiastkowa
root scale

Source: as per Figure 1.

22 Social Policy No 1 ENG/2017

 Table 8. Impact of the “Family 500+” programme on income and expenditure inequalities (the Gini inequality index)
Equivalent Income
Equivalence scale
before 500+ after 500+ before 500+
OECD 0.347 0.322 0.323
Modified OECD 0.343 0.320 0.315
Square root 0.336 0.314 0.305
Note: Negative income values have been replaced with 0.
Source: as per Figure 1.
The GUS lead study devoted to measuring poverty in Poland in
2016 indicates that the rate of extreme consumption poverty – for
expenses equalised using the original OECD scale – has been
reduced among the entire population in that year from 6.5% to
4.9% (a decrease by 25%), and among children from 9% to 5.8%
(a decrease by 36%) (GUS 2017b). These decreases are lower
than shown by estimations of the “Family 500+” programme’s
impact on extreme consumption poverty previously presented in
this and prior studies utilising the microsimulation approach. These
discrepancies may be caused by many factors.
Firstly, they may arise from a different methodology of mea-
suring poverty.
Secondly, changes in poverty measured by GUS arise not only
from the impact of the “Family 500+” programme, but also from
the impact of market forces (changes to market revenues) and
elements of transfer policy other than the child-care benefit.
Thirdly, microsimulation studies devoted to the impact of the
“Family 500+” programme utilized BBGD data from the years
2014–2015, while the programme has in actuality been implemen-
ted in the year 2016, in the wake of realistically growing incomes
and expenses of households compared to prior years.
Fourthly, in 2016 the “Family 500+” programme has been in
force only since April and expenditures arising from the programme
in April were still minor.
Fifthly, the households could allocate a larger part of the benefit
than assumed in microsimulation studies on payment of obligations
or increasing their savings.
The reconciliation of microsimulation analyses results with
changes observed by GUS will be possible in the future after GUS
has made available the BBGD microdata for the 2016 and sub-
sequent years.
IMPACT OF THE PROGRAMME ON
INCOME AND CONSUMPTION INEQUALITY
Table 8 illustrates the short-term impact of introducing the
child-care benefit on income and consumption inequality measured
using the Gini index. Income inequalities decrease in a range of
6.5–7.2%, while consumption inequalities decrease in a range from
5.1% to 7.7% depending on the equivalence scale and expenditure
degree of the child-care benefit amount12. It can, therefore, be assu-
med that the initially observed (GUS 2017a) decrease in income
inequality (Gini index) in 2016 by approximately 6% is in part asso-
ciated with the implementation of the “Family 500+” programme.
It should, however, be noted that income inequalities in Poland
measured using GUS survey data have been decreasing slowly as far
back as 2005 (Myck, Najsztub 2016). This is primarily a result of the
decreasing education bonus at the time and reforms of the tax-
benefit system implemented in years 2006–2008 and 2012–2014.
The progressive impact of the child-care benefit on income and
expenditure inequality in Poland may be limited in the long-term, if
the abovementioned negative consequences of the “Family 500+”
programme on the labour market activity of parents occur. In
households which would be affected by this issue labour income
could be decreased significantly and over a long term, which would
further contribute to stratification in society.
Social Policy No 1 ENG/2017
Equivalent Expenditures
after 500+ (scenario of spending the after 500+ (scenario of spending
entire child-care benefit) part of the child-care benefit)
0.298 0.303
0.294 0.299
0.284 0.289
Additionally, as shown by Inchauste et al. (2016), the “Family
500+” programme may also contribute to an increase in inter-
generational inequality, as in all probability the support from child-
care benefits will more often be invested in higher quality pre-
school, school and extracurricular education by families with higher
income.
DISTRIBUTION IMPACT OF CERTAIN MODIFICATIONS
TO THE “FAMILY 500+” PROGRAMME
Presented below are estimations of the distributional impact of
certain simple modifications to the “Family 500+” programme. As
shown previously, the programme to a significant degree reduces
extreme poverty, especially among children, in Polish society. It
does not, however, eliminate it completely. The cost of hypothetically
raising the expenditure of all households in Poland to the level of the
extreme poverty line, with the assumption that the entirety of the sup-
port received by poor households would be spent, is 11,4 billion
PLN per year, which is 46% of the total annual support within the
scope of the “Family 500+” programme13. In the case of extreme
poverty among children, this cost is 3,1 billion PLN per year (12,4%
of the total annual costs of the “Family 500+” programme).
These results illustrate that the elimination of extreme poverty
of children, which is often invoked in Polish public discourse as
a consequence of the “Family 500+” programme, could be hypo-
thetically achieved by spending approximately 1/8 of the amount of
funds allocated to the child-care benefit. Evaluating this conclusion
it is necessary to remember, however, that the assumed objectives
of the programme of supporting not only families living in extreme
poverty.
Public debate also frequently refers to the possibility of modi-
fying the “Family 500+” programme by implementing an “upper”
income criterion which, when exceeded, would result in a gradual
or complete withdrawal of the benefit. According to information
provided by Bartosz Marczuk, secretary of state at the Ministry of
Family Labour and Social Policy, the complete withdrawal of the
child-care benefit with an upper income threshold of 5000 PLN
monthly per person would reduce expenses arising from the pro-
gramme by 81 million PLN with an administrative cost of this ope-
ration equal to 76 million PLN14. Table 9 presents the estimated
benefits for the public finance sector arising from supplementing the
“Family 500+” programme with an upper income threshold, which
would cause complete withdrawal of the benefit when exceeded.
Table 9. Gains to the public finance sector arising from
completely withdrawing the child-care benefit after exceeding
the upper income threshold
Upper income threshold amount Budget gains
(in PLN monthly per person) in PLN billions annually
5000 0,104
4000 0,188
3000 0,521
2000 1,484
Note: the estimations of benefits presented in the table do not take into account
administrative costs of introducing the upper income threshold.
Source: as per Figure 1.
23
The analysis results show that indeed, in case of a benefit with-
drawal threshold equal to 5000 PLN per person, the benefits to the
public finance sector are quite low. This threshold, however, seems
to be relatively high – exceeding it by a married couple with two
children would mean earning a monthly disposable net income of
20 thousand PLN.
Establishment of a benefit revocation threshold at a lower level
brings measurably higher budget gains. For example, the 2000 PLN
monthly per person threshold generates gains in the amount of
1,5 billion PLN annually. This amount is higher than, e.g. the
amount of state budget subsidies to the National Centre for Re-
search and Development or National Centre for Science in 2016.
Such savings would also enable coverage of a significant part of
the costs of supplementing the “Family 500+” programme by the
“zloty for a zloty” mechanism (cost equal to 1,78 billion PLN annually).
CONCLUSIONS
The article utilizes BBGD 2015 data and the microsimulation
approach in order to estimate the short-term impact of the “Family
500+” programme on the income of households, poverty and ine-
quality.
The results show that the child-care benefit will to the largest
degree increase the income of households situated in the lower
bracket of income distribution. Depending on the method of equi-
valising the household expenses and method of spending the child-
support benefit funds, extreme consumption poverty among the
entire population should decrease in a range from 3% to 47%, while
among children – in a range of 75–100%.
Results also suggest that the “Family 500+” programme shall
reduce income inequalities in Poland measured by the Gini index by
several percent. In reality, the impact of the child-care benefit on the
distribution of income and expenses in 2016 may be lower than
indicated by estimations presented in this article, which are based
on microdata from the year 2015. It appears, however, that the
estimated impact of reducing the extreme poverty rates are high
enough, that the error arising from the increase in household in-
come in the 2015–2016 period is relatively minor.
The results according to which implementation of the “Family
500+” programme may lead to households with children, espe-
cially more than one child, to be at a higher risk of extreme poverty
compared to smaller households appear especially interesting from
the perspective of social policy recommendations.
What is more, analysis based on utilising certain equivalence
scales suggests that even prior to implementing the child-care be-
nefit the extreme poverty rates among households with children in
Poland were at a level comparable or lower than among single-
person households or childless couples.
It should also be emphasized, that the short-term progressive
impact of the “Family 500+” programme on income distribution in
Poland may be limited in the long term, if the potentially negative
consequences of the programme for the occupational activity of
low income parents come into effect.
1
Justification to the 11th of February 2016 State Aid for Child-Support act,
https://legislacja.rcl.gov.pl/docs//2/12279566/12326797/12326798/
dokument202543.pdf [accessed on 2.08.2017].
2
http://www.mpips.gov.pl/aktualnosci-wszystkie/rodzina-500-plus/
art,8949,prawie-4-mln-dzieci-z-rodzina-500.html [accessed on 2.08.2017].
3
This constitutes 1,2% of Poland’s GDP in 2016.
4
MRPiPS information published on Twitter: https://twitter.com/MRPiPS_
GOV_PL/status/887212667940818944.
5
Apart from the age structure, also the number of taxpayers, number of
payers of healthcare insurance broken down into employees and self-
employed, number of individuals receiving a pension or retirement,
number of registered unemployed and number of individuals with high
income has been subject to adjustment.
6
The administrative cost of the “Family 500+” programme in the period
from the 1st of April 2016 to the end of May 2017 was approximately 455
24
million PLN. This constitutes approximately 1.7% of the expenses
incurred as part of the programme.
7
A simpler instrument limiting the negative income consequences arising
from the threshold based revocation of child-care benefits would be the
“zloty for a zloty” system which has since January 2016 been an
element of the family benefits system. This solution would increase the
costs of the “Family 500+” programme by approximately 1,78 billion
PLN per year.
8
The equivalence scales make it possible to compare the welfare of
households of various sizes and different socio-demographic compo-
sition by taking into consideration the benefits of scale and needs of
individuals of various ages. In practice these are factors, by which the
total income of a household of a different size and composition is divided
in order to obtain an equivalent income comparable between households.
9
A comparison taking into consideration the subjective equivalence scale
is presented only for scenario 1 and included in table 6, as the values of
the subjective scale have been estimated only for certain types of
households (see Kalbarczyk-Stęclik et al. 2017; Miśta and Morawski
2016; Morawski 2016).
10
This result corresponds to results of prior analyses, according to which
the decrease in the rate of extreme consumption poverty among children
shall in the discussed case be 94% (see Szarfenberg 2017).
11
In most cases (apart from households with 1 child and analysis based
on OECD equivalence scales), this conclusion applies also in the case of
the partial child-care benefit scenario (see tab. 7).
12
These results correspond to previous results by Inchauste et al. (2016),
and Goraus-Tańskiej and Inchauste (2016). According to the first of
those studies, the “Family 500+” programme will reduce income ine-
qualities measured by the Gini index by 6.7%, while according to the
second study – by 8.5%. Monetary transfers for children in Western
European countries will reduce the Gini index value for income equalised
using the original OECD scale in a range of 4.5% (Sweden) to 9.2%
(Belgium) (Popowa 2016).
13
It is an estimation of the static impact of monetary transfers for people in
extreme poverty, which do not consider the impact of such transfers on
the labour supply among the poor. Collado et al. (2017) have recently
studied the issue of eliminating relative poverty in Belgium, Denmark and
Great Britain in a way which would not reduce incentives to take on
occupational activity among people in poverty. The cost of such a reform
turned out to be twice as high, as the cost needed to mechanically
increase the income of all households to the level of the relative poverty
line.
14
Vice-minister in charge of 500+. Bartosz Marczuk: Oczywiście, że wez-
mę pieniądze z programu [Of course I will take money from the pro-
gramme], interview with Bartosz Marczuk conducted by Magdalena
Rigamonti, „Dziennik” dated 1.04.2016.
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SUMMARY
We use the microsimulation approach and household budget survey data from 2015 to estimate the short-
term impact of the “Family 500+” programme on household incomes, poverty and inequality. The results suggest
that the programme will have the strongest impact on the incomes of households at the lower end of income
distribution. Extreme consumption poverty in the whole population is reduced in the range from 35 to 37%, while
child poverty in the range from 75 to 100%, depending on the choice of equivalence scale and assumptions about
changes in household expenditures. The paper shows also that the programme will reduce the Gini index of
income inequality in Poland by a few percentage points. The programme can lead to a lower risk of extreme
poverty for households with children as compared to small households (e.g. single-person households). Analysis
based on certain equivalence scales suggests that even before the implementation of the “Family 500+” pro-
gramme extreme poverty among households with children was comparable or lower than among one-person or
childless households. The progressive impact of “Family 500+” programme on income distribution in Poland may
be reduced in the longer run if labour market activity of low income households will be affected negatively.
Keywords: child-care benefits, poverty, inequality, microsimulation, equivalence scales
Keywords

EFFECT OF CHILD CARE BENEFIT (500+)

ON POVERTY BASED ON MICROSIMULATION
Ryszard Szarfenberg
Institute of Social Policy,
University of Warsaw, Poland

FAMILY POLICY OBJECTIVES
Reducing the poverty of families and children is not the sole
purpose of family policy, and monetary benefits do not exhaust
the set of its instruments. Apart from many types of family be-
nefits, there is also a large area of social services dedicated to
families and children. Expenditure for such services in Poland is
low compared to many countries, which also affects their low
availability and limited quality. The integrated family policy is based
on a couple of pillars. In addition to supporting parents’ economic
activity and income support, it includes also the “access to high
quality and affordable services”.
Several objectives are worth mentioning in this respect, following
the recommendation of the European Commission of 20 February
2013 Investing in children: breaking the cycle of marginalization.
1. Reduce the inequality at an early age by investing in early
childhood education and childcare.
2. Increase the impact of education systems on equal oppor-
tunities.

Social Policy No 1 ENG/2017 25

 3. Improve the ability of health care systems to respond to the
needs of marginalized children.
4. Provide children with safe and appropriate housing and living
conditions.
5. Increase family support and improve the quality of alternative
ways of child care.
The recommendation contains a number of guidelines that
Member States should consider when designing an integrated
family policy aimed at eradicating poverty and exclusion of children
and reducing inequalities between families and children.
The Law and Justice (PiS) party has put in its election pro-
gramme a new cash benefit called the “500 plus Program” (here-
after “500+”). After the election, the program was implemented by
the act on state aid in raising children. This reinforced one of the
pillars of family policy.
CHARACTERISTICS OF 500+
IN COMPARISON WITH FAMILY BENFITS
The characteristics of the new benefit can be presented in
comparison with family allowances. Below I present some diffe-
rences between these benefits.
Firstly, family allowances are granted on the basis of inco-
me criteria irrespective of the number of children in the family,
i.e. there are dedicated to poor families only. In the case of the
500+ this criterion is also used, but only for the first child, which
means that each family with more than one child is entitled to the
benefit.
Secondly, family allowances vary according to the age of the
children (three age brackets introduced in 2003, before the amount
of allowances depended on the number of children or was not
differentiated), while the 500+ benefit is the same for each eligible
child.
Thirdly, family allowances can in certain situations be increa-
sed, while the principles of the 500+ exclude such possibility.
Fourth, exceeding the criterion in the case of family allowances
does not necessitate the withdrawal of the entire benefit with
supplements, it is only reduced by the amount of the excess. The
500+ for the first child is withdrawn in the case of exceeding the
criterion related to this child. For families with only one eligible
child, this means the complete loss of benefit.
Fifth, in some cases, also children over 18 years of age are
entitled to family allowances (when they study), which is not
possible in the 500+.
The principles of the 500+ have several important conse-
quences. The most important one is the extended coverage of
eligible families. If all families had only one child, then the difference
between the eligible to family benefits and the eligible to the 500+
would depend solely on the difference in the income criterion. As
the 500+ has higher criteria (currently 800 zlotys to 674 zlotys in
family benefits and 1200 zlotys to 764 zlotys for children with
disabilities), it increased the number of eligible families, especially
with disabled children. The coverage extends with the removal of
the criterion for subsequent children. If all the families had more
than one child, then each of them would be entitled to the 500+.
In 2015, on average, family allowances were paid for 2 million
children (this figure was steadily decreasing, as reported by the
Ministry of Labour and Social Policy, MRPiPS). By the end of 2016,
there were 3.8 million children participating in the 500+. It is then
Table 1. Main differences between family allowances and 500+
Type of Difference Supplements
Criterion of poverty
benefits in amount to the benefit
Family Yes, depending on the No, the benefit is reduced by the
Yes, it includes all children Yes
allowances age of the children excess amount
500+ Yes, only for the first child No No Yes, it concerns the first child
Source: own data.
26
possible to estimate the number of new children covered by
benefits at 1.8 million. This does not mean that the benefit has
become universal, because still about 3.1 million children are not
eligible.
The level of the 500+ benefit is another important issue after
the coverage. The average family allowance per child is currently
118 zlotys, while the child care allowance is 500 zlotys. So the
level of the latter is 4.2 times higher. This comparison should also
include supplements to family allowances, which will increase
the average, such as the supplement for large families (currently
95 zloty). Therefore, for large families, we need to compare
213 zlotys (allowance and supplement) to 500 zlotys. The quotient
is now 2.3, so the level of child care benefit is still more than two
times higher. These differences will decrease as long as the family
criteria and benefits are verified and increased in the three-year
period and the 500+ (including its criteria) remains at the original
level.
Thus, the conclusion is as follows: 500+ has substantially
increased the coverage and the level of benefits for families with
children compared to family allowances. This is not, however, a uni-
versal benefit for all children. It is a hybrid benefit combining the
income test with the universality.
REDUCTION OF POVERTY WITHIN OBJECTIVES OF 500+
In the justification of the act on state aid in raising children it
was stated that its primary purpose was financial help directed to
families bringing up children, as well as financial support of fa-
milies, especially those at risk of poverty, and partial coverage of
parents ”or carers” expenses for high costs of upbringing and
education of children (Rządowy... 2016).
In the presentation of the project for the parliament it was
stated that the benefit has three main objectives: increasing the
fertility rate, investing in human capital, reducing poverty among
the youngest Poles (Rafalska 2016). In the same presentation
the possible impact of the benefit on poverty was described
as follows: by introducing a child care benefit, poverty may fall
by three percentage points, and the risk of poverty among children
under the age of 17 decreases from 23.3% to 11% (thereto).
Child poverty indicators in the last few years are shown in
Figure 1 and 2.
Figure 1. Percentage of poor children in relative
and absolute terms, in %
 
  



    



2011 2012 2013 2014 2015
Child extreme poverty rate Child relative poverty rate
Source: own elaboration, Central Statistical Office (GUS) data.
Withdrawal of the whole benefit
Age criterion
after exceeding the criterion
18 years with exceptions when children choose
to continue their education
18 years old
Social Policy No 1 ENG/2017
 Figure 2. The number of poor children in relative
and absolute terms, in thousands
1800 16613
15636 15323 15187
1600
1400
1200
1000
800 6965 7099 7175
6976
6229
600
400
200
0 The estimates of poverty reduction by benefits alone do not tell us
2011 2012 2013 2014
Children in extreme Children
liczba dzieci w skrajnym ubóstwie Liczba dzieciinwrelative poverty
relatywnym ubóstwie
poverty
Source: own elaboration based on GUS data on the total number of poor children and
the percentage of children in poverty.
Recent years have not brought any substantial changes in the
children poverty rates. However, there is some improvement when
we compare 2014 and 2015.
Financial aid, economic support, or partial coverage of ex-
penses of families with children are not goals in the sense of future
states desired by the project initiator. The aim would rather be to
increase the standard of living of families with children, and the
means to achieve it is additional financial assistance in the form of
a new cash benefit. The mechanism of its operation can be des-
cribed as follows:
1) cash benefit increases family income,
2) family allocates increased income for additional purchases
of goods and services,
3) consumption of these goods and services increases the
level of satisfaction of the family needs,
4) the family’s standard of living improves.
Each of these elements requires additional conditions. The be-
nefit will increase the income of the family provided that the family
is entitled to it (the income criterion for the first child excludes
approximately 3.1 million children from receiving the benefit). If it is
entitled, it should also effectively claim this right.
Furthermore, the grant of a benefit can be related to the redu-
ction of income from other sources, e.g. leaving a job decreases
income from employment. Families may put aside their consumption
for the future, so not all additional income will be spent on goods
and services immediately. Consequently, consumption will also
increase less than it could be expected from the amount of granted
benefit. In addition, the increase in the standard of living of the
family may apply to both poor and non-poor families. In the case of
the former, it may be sufficient for the family to become non-poor
one, but it may also stay in this situation (increase in living stan-
dards not sufficient to exceed the poverty threshold).
Theory of the effectiveness of cash benefits in reducing poverty
is presented in scheme 1. If the aim is to reduce the poverty of
families with children through cash assistance, it is important to
ensure that:
1) poor families had access (entitlement) to it;
2) the amount of aid is sufficient to eradicate poverty;
3) all families benefit from the appropriate support they are
entitled to.
In parliament the project was presented with the following
formula of the goal: reduction of poverty among the youngest
Poles. Estimates of this reduction show how poverty and its
reduction are concretized. However, neither in the justification of the
project, nor in its presentation in the parliament we will find no
information about the intended level of reduction in child poverty.
Social Policy No 1 ENG/2017
Scheme 1. Effectiveness of cash assistance in reducing poverty
1RSRYHUW\
6\VWHPRIFDVKDVVLVWDQFH
14257
(QWLWOHPHQW
Yes $GHTXDF\ Yes 7DNHXS Yes
3RRU ,VWKH 'RHVWKH*'
*' ,VWKH*'HQWLWOHG
WRDVVLVWDQFH" DVVLVWDQFH UHFHLYHWKH
KLJKHQRXJK" EHQHILW"
1R 1R 1R
3RYHUW\
Designation: GD - household with children.
Source: Behrendt 2002: 50.
2015
what reduction and in what time was intended to be achieved.
Let us assume that the intention would be to reduce child
poverty to zero. Then the information that child poverty is reduced
from 23% to 11% would mean that the target has not been achieved
despite significant reduction in poverty. However, if the target was
set at 5 percentage points, then the interpretation would be that the
achievements exceed expectations.
The remark concerning the lack of intentional reduction of
poverty does not lead to the conclusion that 500+ is not possible
to evaluation. Regardless of the target, the criterion for assessment
of the scale of impact may include for example the current scale of
poverty reduction through already existing benefits. If they reduced
child poverty by 18% (Bradshaw, Huby 2014), and 500+ reduced
it by more than 50%, then on that basis, it is possible to assess the
place of both benefits on the scale of poverty reduction, for exam-
ple a reduction of up to 20% would be reflected by “moderate” note,
a reduction between 20 and 40% by “medium” one and 40% to
60% would be qualified as “substantial”. The assessments would
suggest that family allowances were associated with a moderate
reduction in child poverty, and 500+ was associated with a large
reduction. Table 1 shows the impact of individual benefits on child
poverty in the past.
Data from Table 1 show that family allowances in Poland have
reduced child poverty to a limited extent, although there are several
countries with even lesser impact. Interestingly, Poland was at the
forefront of reducing child poverty through retirement benefits. This
may be due to the fact that many children in Poland live with their
grandparents. It is characteristic that countries with the lowest rates
of child poverty have high levels of reduction of this kind of poverty
due to in-work benefits.
ESTIMATION OF THE INFLUENCE OF 500+
ON TOTAL POVERTY AND CHILD POVERTY
Evaluation of 500+ in terms of effectiveness in reducing po-
verty requires first to determine the magnitude and direction of the
impact of this benefit, and then to evaluate it. These are two, rather
complicated tasks.
The first needs to determine the extent to which the change in
poverty depends on the child care benefit and to which it results
from other factors. These include changes in social policy, e.g.
from 2016, parental benefit has been granted to women without
sickness insurance (1,000 zlotys per month for one year after the
baby was born), but also independent factors, for example the
increased labour demand might have motivated some mothers took
up employment, which could significantly increase family income.
The second task requires an evaluation of what was a result of
the first task. It is not enough to say that the benefit has reduced the
poverty by x% to determine whether it is a small, medium or large
impact. If the poverty concerned about 1.5 million children, the
reduction to 700 thousand seems big but still leaves hundreds of
thousands of children in poverty.
27
 Table 1. Level of child poverty reduction by several types of cash benefits (decreasing order according
to the level of poverty reduction by family allowances)
Relative poverty
Country Family allowances Pensions Social security Housing allowances Benefits for workers
after transfers
Percentage reduction of child poverty before transfers
Austria 12.1 64.0 18.0 1.0 9.0 26.0
Finland 8.9 59.0 3.0 17.0 21.0 42.0
Ireland 15.5 58.0 3.0 4.0 19.0 42.0
Slovenia 9.3 56.0 16.0 13.0 2.0 25.0
Iceland 8.7 54.0 0.0 1.0 19.0 27.0
Hungary 20.7 53.0 15.0 6.0 2.0 21.0
Sweden 10.5 52.0 4.0 8.0 14.0 34.0
Norway 9.5 50.0 6.0 2.0 5.0 45.0
Czech Republic 10.6 46.0 9.0 3.0 3.0 22.0
Germany 13.5 46.0 6.0 14.0 1.0 24.0
Estonia 14.6 43.0 9.0 0.0 1.0 14.0
United Kingdom 19.0 43.0 4.0 24.0 23.0 11.0
Belgium 15.0 42.0 8.0 2.0 0.0 25.0
France 16.4 42.0 8.0 3.0 21.0 21.0
Malta 16.0 41.0 13.0 12.0 1.0 16.0
Luxembourg 23.3 40.0 5.0 4.0 6.0 16.0
Cyprus 9.4 36.0 6.0 1.0 1.0 16.0
Denmark 8.5 33.0 0.0 0.0 12.0 50.0
Lithuania 18.4 31.0 16.0 10.0 1.0 15.0
Slovakia 14.9 31.0 22.0 3.0 0.0 11.0
The Netherlands 14.2 30.0 3.0 14.0 9.0 15.0
Latvia 20.9 19.0 5.0 0.0 0.0 6.0
Romania 33.2 19.0 12.0 3.0 0.0 3.0
Poland 22.1 18.0 25.0 2.0 1.0 11.0
Bulgaria 21.0 16.0 14.0 2.0 0.0 6.0
Italy 23.3 15.0 8.0 1.0 0.0 13.0
Portugal 20.8 14.0 10.0 4.0 0.0 14.0
Greece 22.7 6.0 7.0 0.0 0.0 2.0
Spain 22.6 5.0 6.0 0.0 0.0 15.0
Source: Bradshaw, Huby 2014: 32.

The evaluation of the obtained influence is in this case only
fragmentary. As mentioned above, there are two other goals that
are considered equivalent. One of them (investment in human
capital) needs to be made more specific because it is not clear how
to measure it. For each of them, it is necessary to perform the first
task, i.e. to determine the direction and magnitude of the impact of
benefit and then the evaluation task.
The sole effectiveness in achieving one or all of the goals is still
not a sufficient basis for a full evaluation because it does not take
into account the side effects (they may be positive but also ne-
gative). In addition, a certain level of effectiveness can be achie-
ved at different costs. The expenditures on 500+ are estimated at
around 24 billion zlotys per year. Public spending on broadly
defined social assistance in 2015 amounted to 45 billion zlotys, but
the state budget spending accounted for 17.4 billion zlotys (go-
vernment social assistance) (Republican Foundation 2016). Thus,
it can be said that government social assistance has increased by
more than 130%*.
The full assessment of 500+ is not the subject of this article.
We focus on the determination of impact of this benefit on total
poverty and child poverty. Can this be done before we have data on
family income and expenditures from 2016? Yes, as a tool has
been developed to assess the impact of reforms of the tax-benefit
system on income poverty, even before these reforms were im-
* Compare estimates that social spending from the state budget on social
assistance will increase by 202% in 2016 compared to 2013 (Sawulski
2016).
plemented. This tool consist of tax and benefits microsimulation
models. In Poland, two operational models of this kind are SIMPL
(Myck 2009) and the model of the Ministry of Finance (Konopczak,
Skibicki 2012). Polish literature already contains a monograph
devoted to the general problem of microsimulation models, as well
as to comparing the two Polish models (Żółtaszek 2013). In par-
ticular, the SIMPL model has been used to analyse the redistributive
impact of the various reforms introduced or proposed in Poland
(e.g. Morawski, Semeniuk 2013; Myck et al. 2012, 2015).
There is no space here for detailed presentation of the essence,
technical details or assessments of the strengths and weaknesses
of microsimulation models. This is a tool that is intended to assist
decision-makers in making decisions about changes in the tax and
benefits system. It allows to estimate not only the redistributive
effects of reforms such as the change in poverty or inequality, but
also their costs for public finances.
The results of applying microsimulation models to estimate the
impact of 500+ on the total poverty and child poverty will be
presented below. Data on the redistributive impact of 500+ come
from a note from the Ministry of Family, Labour and Social Policy
(MRPiPS 2016), from the World Bank (Inchauste et al. 2016 in the
tables as WB) and the European Commission (KE 2017).
Estimates of the impact on extreme poverty (the criterion of po-
verty is here the subsistence minimum) is more difficult as it con-
cerns spending, not income. Hence, the World Bank experts have
adopted two scenarios:
1) families spend all income coming from 500+;
2) families spend less than 100% of income coming from 500+.

28 Social Policy No 1 ENG/2017

 Table 2. Total estimates of the impact of 500+ on extreme poverty and relative poverty
Before 500+ After 500+ Reduction Reduction
Type of poverty Comments
(in %) (in %) (in pp) (in %)
Total extreme poverty 7.5 3.9 -3.6 -48.0 Total for expenses; Data from BBGD 2014, WB 2016
Total extreme poverty 7.5 4.6 -2.9 -39.0 In line with the trend; Data from BBGD 2014, WB 2016
Total relative poverty 18.7 13.9 -4.8 -26.0 Data from BBGD 2014, WB 2016
Total relative poverty 17.3 13.4 -3.9 -23.0 EU-SILC 2013, MRPiPS 2016
Total relative poverty 17.7 12.5 -5.2 -29.0 EU-SILC 2014, KE 2017
Designations: BBGD – surveys of household budgets by GUS; EU-SILC – Eurostat income and living conditions survey.
Source: own elaboration, data sources as in comments.

Table 3. Estimates of the impact of 500+ on relative poverty of different types of families
Relative poverty
Poverty before 500+ (in%) Poverty after 500+ (in %) Reduction (in pp) Reduction (in %) Comments
by family type
Poverty of families 1 + children 21.1 4.1 -17 -81.0 EU-SILC 2014, KE 2017
Poverty of families 2 + 1 11.5 6.9 -4.6 -40.0 EU-SILC 2014, KE 2017
Poverty of families 2 + 2 16.2 4.4 -11.8 -73.0 EU-SILC 2014, KE 2017
Poverty of families 2 + 3 33.9 1.1 -32.8 -97.0 EU-SILC 2014, KE 2017
Poverty of families 3 + children 22.0 12.9 -9.1 -41.0 EU-SILC 2014, KE 2017
Source: own elaboration; data as in the comments (adjustment in the last line to the source: instead of 1.1 the original states 12.9, because it reflects the difference in pp).

Relative poverty relates to income and its threshold is 60% of
the median of equivalent income (calculated per head according to
the equivalence scale).
The simulation shows that after the introduction of 500+ the
total poverty, regardless of its type, decreases by several dozen
percent. Nearly two times greater decline can be expected in case
of extreme poverty compared to relative poverty.
The results of the simulation, reported by the European Com-
mission, included information on how poverty among families with
children could be reduced. The relative poverty of families with
children may decrease by several dozen percent, though not in all
families on a similar scale. The “two parents and one child” families
may be the least affected. Probably in this case many families
exceed the income criterion, and thus 500+ affects only the part of
them. A similar reduction scale is apparent for families with three or
more adults and children. In other families, reductions are greater
than 50%, but still smaller for families with one parent and one child
as well as two parents and two children. This is may be also related
to the exclusion by income criterion.
The highest level (over 90%) of child poverty reduction con-
cerns families with two parents and multiple children. The picture of
the poverty of families with children is thus fundamentally altered
– the families with a small number of children are the most vul-
nerable and not the large families as it was in the past. If we take
into consideration families without children, then the risk of poverty
will relatively to families with children increase a lot.
In the same source we can find the following information on the
poverty rate in households without children:
– one person under 65 years of age: 30.3%
– one person aged 65 years and over: 23.1%
– two persons, both under 65 years of age: 13.7%,
– two persons with at least one person aged 65 years and
more: 9.9%,
– three persons or more: 14%.
It is expected that, after the reform, poverty will concern
households without children to larger extent than those with chil-
dren (tab. 4).
Introduction of 500+ can significantly change the risk of rela-
tive poverty. While there were three types of families with children
in the first five, after the implementation of 500+ there would be
only one. First places are being occupied by single person house-
holds, especially those with members under 65 years of age.
Households are the main unit in the study of poverty. After the
conversion of household incomes to comparable units and the
application of the poverty threshold, subsets of poor and non-poor
households can be distinguished.
Moving on to the discussion of the poverty of individuals
requires first to assume that all people in poor households are poor
and in the non-poor households they are non-poor. As children are
considered persons aged 0-17. Child poverty is measured by divi-
ding the number of poor children by the number of children and
multiplying by 100%, which gives the percentage of poor children.
The simulation shows that the impact of 500+ on child poverty
is approximately two times greater than the effect on total poverty.
Similarly, extreme poverty of children is reduced more than relative
poverty. The larger scale of the impact on child poverty than on the

Table 4. Comparison of the poverty of families with children and without children after the introduction of 500+
With children Poverty before Poverty after Difference of position
Type of family Ranking Ranking
or without children? 500+ (in %) 500+ (in %) in the ranking
Without children One adult <65, no children 30.3 2 30.3 1 1
Without children One adult > = 65, no children 23.1 3 23.1 2 1
Without children Three or more adults without children 14.5 7 14.5 3 4
Without children Two adults <65 13.7 8 13.7 4 4
With children Three or more adults with children 22.0 4 12.9 5 -1
Without children Two adults, at least one > = 65 9.9 10 9.9 6 4
With children Two adults with one child 11.5 9 6.9 7 2
With children Two adults with two children 16.2 6 4.4 8 -2
With children One adult with children 21.1 5 4.1 9 -4
With children Two adults with three or more children 33.9 1 1.1 10 -9
Source: own elaboration; KE 2017 data (adjustment as in the Table 3, adjustment for three or more adults without children: instead of 4.4 in the original adjusted for 14.5).

Social Policy No 1 ENG/2017 29

 Table 5. Total estimates of the impact of 500+ on extreme and relative poverty of children
Before 500+ After 500+ Reduction
Type of child poverty
(in %) (in %) (in pp)
Extreme poverty of children 11.9 0.7 -11.2
Extreme poverty of children 11.9 2.7 -9.2
Relative poverty of children 28.1 10.2 -17.9
Relative poverty of children 23.2 10.5 -12.7
Source: own elaboration, data sources as in comments.
total poverty is due to the rules for the granting of 500+. The main
prerequisite is the children in the family, and their number used to
be decisive to the scale of family poverty.
These are not all microsimulation results that have been re-
ported on 500+. Some also referred to poverty, albeit very specific
– energy poverty. It requires a more complex measurement that
takes into account low income but also high energy expenditure.
The impact of reducing the 500+ on energy poverty was several
times weaker than on the total relative poverty (from 1.4 to 2.7 pp.
less), although in absolute numbers it reflected from 540 thousand
to 1.03 million people less in energy poverty (Owczarek 2016; Lis
et al. 2016). The income growth resulting from 500+ was broken
down by income deciles, showing that families with lower incomes
are more likely to benefit from the scheme, mainly because of the
income threshold for the first child, and that families with children
are more at risk of poverty (Myck et al. 2015).
CONCLUSIONS
An assessment of the impact of 500+ on poverty can be made
by means of tax and benefit microsimulation models, before we
have access to household budget data from 2016. In Poland
simulations have been performed with this method and interesting
results have been obtained. However, it is important to remember
that these are static simulations that do not take into account the
impact of 500+ on labour supply and do not take into account the
impact in the medium or long term.
In the past Poland, in comparison with other countries, has only
slightly reduced child poverty. The paradox was that the pensions
were more influential in that regard than family allowances. This
situation should basically get changed by the high level of child care
benefit, covering more than half of the children.
Several simulations of the impact of 500+ on the financial
situation of families show that poverty in Poland may be reduced by
several dozen percent, with greater impact to be expected in
reducing the extreme poverty than relative poverty and in reducing
child poverty than total poverty, namely:
– total relative poverty can be reduced by at least 23%,
– total extreme poverty by at least 39%,
– relative poverty of children by at least 55%,
– extreme poverty of children by at least 77%,
– relative poverty of large families by as much as 97%.
The reform may lead to changes in the structure of the risk of
poverty. In the past, it was spread in different ways on families with
children and without children. After the reform, households without
children may be more at risk.
The first data on the indicators of total poverty and child poverty
in 2016 will be available in the GUS communication on economic
poverty. It should be applied to check real trend and the accuracy of
simulation results.
REFERENCES
Behrendt C. (2002), At the Margins of the Welfare State: Social Assistance
and the Alleviation of Poverty in Germany, Sweden and the United
Kingdom, Ashgate, Burlington.
Bradshaw J.R., Huby M. (2014), Decomposing Child Poverty Reduction,
”European Journal of Social Security”, Vol. 16, No. 1, p. 26–50.
30
Reduction
Comments
(in %)
-94.0 Total for expenses; Data from BBGD 2014, WB 2016
-77.0 In line with the trend; Data from BBGD 2014, WB 2016
-64.0 Data from BBGD 2014, WB 2016
-55.0 EU-SILC 2013, MRPiPS 2016
Inchauste G., Corral Rodas P., Goraus K. (2016), Skutki dystrybucyjne
programu Rodzina 500 Plus [Distribution effects of the Family 500+
program], nota z 2 maja [note from 2 of May].
Fundacja Republikańska (2016), Mapa wydatków państwa [Map of state
expenditures], http://www.mapawydatkow.pl/ [accessed on 23.02.2017].
KE (2017), In-depth analysis of tax reforms – POLAND.
Konopczak K., Skibicki J. (2012), Mikrosymulacyjny model podatkowo-
zasiłkowy Ministerstwa Finansów – dokumentacja [Tax and benefit
microsimulation model of the Ministry of Finance – documentation],
MF Working Paper Series, No 12, http://www.mf.gov.pl/documents/
764034/1209344/mf_wp_12.1.pdf [accessed on 18.02.2017]
Lis M., Miazga A., Sachach K., Szpor A., Święcicka K. (2016), Ubóstwo
energetyczne w Polsce – diagnoza i rekomendacje [Energy poverty in
Poland – diagnosis and recommendations], Institute for Structural
Research, Warsaw.
Morawski L., Semeniuk A. (2013), Zakres ubóstwa a reformy podatkowo-
świadczeniowe w latach 2006–2010 [The extent of poverty and tax
reforms in 2006–2010], “National economy”, No. 4, p. 21–40.
MRPiPS (2016), Wpływ programu Rodzina 500 plus na zagrożenie
ubóstwem [Impact of the Family 500+ program on the risk of poverty],
https://www.mpips.gov.pl/wsparcie-dla-rodzin-z-dziecmi/rodzina-500-
plus/dokumenty-i-opracowania/wplyw-programu-rodzina-500-plus-
na-zagrozenie-ubostwem/ [accessed on 15.02.2017].
Myck M. (2009), Analizy polskiego systemu podatkowo-zasiłkowego z wy-
korzystaniem modelu SIMPL [Analyzes of the Polish tax and benefit
system using the SIMPL model], „Problemy Polityki Społecznej. Studia
i Dyskusje [Problems of Social Policy. Studies and Discussions”, No. 9,
pp. 87–100.
Myck M., Kundera M., Najsztub M., Oczkowska M. (2015), Programy
wyborcze 2015: kto zyska, kto straci i ile to będzie kosztowało [Election
programs 2015: Who will win, who will lose and how much it will
cost], V Raport Przedwyborczy CenEA, Szczecin [V Preliminary Report
of CenEA, Szczecin], http://www.cenea.org.pl/images/stories/pdf/
commentaries/raport5.pdf [accessed on 18.02.2017].
Myck M., Morawski L., Semeniuk A., Domitrz A. (2012), Dystrybucyjny
wpływ reform podatkowo-świadczeniowych wprowadzonych w latach
2006–2011, [Distributive impact of tax and benefit reforms introduced
in 2006–2011], Microsimulation Report: 01/2012, CenEA Center for
Economic Analysis [Fundacja Centrum Analiz Ekonomicznych CenEA],
Szczecin.
Owczarek D. (2016), Ubóstwo energetyczne – nowe wyzwanie, nowe roz-
wiązania [Energy poverty – new challenge, new solutions], Fundacja Bli-
sko, http://fundacjablisko.pl/index.php/owczarek-ubostwo-energetyczne-
nowe-wyzwanie-nowe-rozwiazania/ [accessed on 12.02.2017].
Rafalska E. (2016), Wystąpienie Elżbiety Rafalskiej, Minister Rodziny, Pracy
i Polityki Społecznej podczas pierwszego czytania rządowego projektu
ustawy o pomocy państwa w wychowywaniu dzieci w dniu 9 lutego
2016 r. [Speech by Elzbieta Rafalska, Minister of Family, Labour and
Social Policy at the first reading of the government draft state aid law on
raising children on 9 February 2016], https://www.mpips.gov.pl/
wsparcie-dla-rodzin-z-dziecmi/rodzina-500-plus/dokumenty-i-
opracowania/wystapienie-elzbiety-rafalskiej-minister-rodziny-pracy-i-
polityki-spolecznej-podczas-pierwszego-czytania-rzadowego-
projektu-ustawy-o-pomocy-panstwa-w-wychowywaniu-dzieci-/
[accessed on 22.02.2017].
Rządowy projekt ustawy o pomocy państwa w wychowywaniu dzieci
(2016) [Government draft on state aids in raising children], Druk
Sejmowy nr 216, http://www.sejm.gov.pl/Sejm8.nsf/druk.xsp?nr=216
[accessed on 12.02.2017].
Sawulski J. (2016), Budżet zmarnowanej szansy, Opinia IBS o projekcie
budżetu państwa na rok 2016 [Budget of wasted opportunity, IBS
Opinion on the State Budget for 2016], IBS Policy Paper 01, Instytut
Badań Strukturalnych, Warsaw.
Żółtaszek A. (2013), Modele mikrosymulacyjne. Teoria i zastosowania
ekonomiczno-społeczne [Microsimulation models. Economic and
social theory and applications], University of Łódź.
Social Policy No 1 ENG/2017
 SUMMARY
Child care benefit (500+) is a new cash instrument of family policy introduced in Poland in 2016. There were
a lot of discussions on many respects of the new benefit. One of them is expected impact on child, family and total
poverty. In the first part I described goals of family policy and the 500+ in comparison to family benefits. Second
part contains critical examination of official justification of 500+ in the light of a theory of poverty reduction by
cash benefits. In the main part I presented shortly microsimulation models and results of three of them (Ministry
of Finance, World Bank and European Commission). It is likely that 500+ impact on overall poverty and child and
family poverty in financial dimension will be impressive. In the result the change of the structure of poverty risk in
Poland can be substantial.
Keywords: family benefits, child allowances, poverty, microsimulation, child poverty, 500+
Keywords

INFLUENCE OF THE 500+ PROGRAMME

ON THE POLISH LABOUR MARKET
• WHAT IS, WHAT WILL BE WHAT TO EXPECT...
Elżbieta Kryńska
Institute of Labour and Social Policy,
Warsaw, Poland

INTRODUCTION for the establishment, development and functioning of families, and

The Constitution of the Republic of Poland states that the family
is under its protection and care (art. 18), and the state in its social
and economic policy takes into account the good of the family.
Families who are in difficult financial and social circumstances,
in particular large and incomplete ones, have the right to special
assistance from the public authorities (art. 71)1. This imposes
specific obligations on the public authority, which, when inspiring
and undertaking its actions, should take into account the needs and
duties of the family while at the same time taking into account the
principles of subsidiarity and intervention.
Family policy lies in the area of socio-economic policy that
determines the present and future prospects for the development
of each country. The set of solutions developed and used within
it affects the shape of other areas. This concerns (among other
things) the labour market, closely linked to family policy, by re-
gulating the size and activity of the workforce. After all, work is
a production factor that is in the hands of families (households),
and its rent is a primary source of income.
The aim of this paper is to identify the likely impact of one of the
family policy instruments in Poland, the “Family 500+” programme.
The analyses were focused on the supply side of the labour market.
The demand side, without neglecting it, was treated as one of the
determinants of labour supply. As we are still lacking in reliable
research, as far as comprehensive research in this area is con-
cerned, the analysis is based on the knowledge contained in the
source literature and the research experience of the author.
ELEMENTS OF FAMILY POLICY IN POLAND
Family policy is currently drawing the attention of theoreticians
and practitioners working in the area of socio-economic government
policy. The term “family policy” was introduced quite long ago, in
the 1940s. This was related to the need to emphasize the impor-
tance and relevance of actions undertaken within the framework of
social policy, which is part of family policy2. It is defined as a whole
body of legal norms, actions and means implemented by the state
to create the right conditions for the family – its establishment,
proper functioning and fulfilment of all important social roles (Ka-
merman 1994; Balcerzak-Paradowska 1993, 1999, 2004; et al. 2017).
Family with children is the subject of family policy, and its
primary purpose is to support the development of the family and to
assist in fulfilling its economic, care and educational role. The
actions undertaken within it are conducive to creating conditions
above all – to have and raise children, as one of the most important
functions of the family is procreation (Kalinowska-Sufinowicz 2013).
This is why family policy is of particular interest nowadays
when unfavourable demographic phenomena such as population
decline and aging are caused by, among others, low fertility.
The challenges put to family policy are not limited to demo-
graphic processes. The establishment and functioning of the family
is also influenced by recent economic, social and political changes,
such as (Balcerzak-Paradowska 2009: 20–21):
– changes in the family structure leading to the transition from
the traditional family model to a variety of forms of family life. The
reduced stability of family increases the number of families formed
by single parents with children, the higher the risk of poverty and
social exclusion, and the risk in properly fulfilling the tasks of edu-
cation and socialization;
– changes in the labour market as a result of increased labour
market flexibility, which in practice means, among others, job in-
stability combined with increasing demands on employees;
– changes resulting from the process of globalization, inte-
gration and increased international dependence, creating the need
to give special importance to economic growth and its stimulants.
The changes of labour reality influences the ways of providing
work in households and families.
Firstly, the development and increasing use of ICT in the second
half of the 20th century, the establishment and implementation of
telematic techniques, the liberalization of the telecommunications
market, the commercialization of the media and the dynamic de-
velopment of social media, have led to the emergence of an in-
formation society (Kryńska 2017: 143–145). This environment often
offers jobs without any professional training (in particular IT tra-
ining), where only a computer with Internet access is needed and of
course an elementary ability to use it. The anonymity of Internet has
also made it a platform for exchanging information about employers
and earnings (Malec 2017: 64), which has considerably enriched
the sources of information on the labour market.
Secondly, the change in ways of satisfying some consumer
needs. They ignore formal institutions for this purpose, deciding to
use networks of informal contacts (e.g. for the provision of care or
educational services). This eliminates the need to use existing in-
stitutions and their workforce for this purpose. This results in tem-
porary jobs being created for persons whose status on the official
labour market may be different and may also include professional
inactivity.

Social Policy No 1 ENG/2017 31

 Thirdly, the isolation of groups of workers due to their attitude to
work, the way they work, and their attitude towards the work itself.
They are based on the resignation from the customary (“traditional”)
career path, consisting of gradual promotion in permanent work, for
a discontinuous professional career. This involves switching from
employment to working as a sole trader/service provider in order to
diversify the various professional experiences (Baltes et al. 2011:
197–225). There may also be breaks in the work service during
which the employee focuses on activities for personal development
or family responsibilities3 (Kryńska 2017: 145–146). Climbing the
career ladder has been replaced by a discontinuous career, the sta-
bility has been replaced by a change (Sobierajski 2017: 56).
Family policy may be general (when it is addressed to all fa-
milies with children) or selective (when it applies to selected family
categories such as large families, dysfunctional, poor or incomplete
families). Its instruments are legal and institutional regulations, as
well as social, lucrative, compensatory, redistributive, egalitarian,
stimulating and encouraging social services.
Financial instruments of family policy in Poland include (among
others):
1) family allowances for parents, which purpose is to partially
cover the costs of childcare. They depend on the age of children –
up to the age of 18 or the completion of schooling but not longer
than 21 years of age or up to 24 years of age if the child continue
his / her education at school or college and have a moderate or
severe disability. They are available to parents, one parent or legal
guardian, the tutor and the learner (adult learner, dependent parent
for death or court order or court settlement alimony). Family allo-
wances require meeting the income criterion. They are supple-
mented by childbirth allowances, childcare allowance during pare-
ntal leave, lone parenting, upbringing children in large families,
education and rehabilitation of a child with a disability, allowances
for the school year outset and the child’s education at school
outside place of residence4;
2) The Large Family Card (implemented in 2015), which large
families with numerous benefits, including a system of discounts
and additional allowances for families with 3 or more children up to
18 years of age, up to the age of 25 if the child remains at school
or college and with no age limit for children with a moderate or
severe disability. It also includes foster families and family orpha-
nages. The card is granted to every member of the family. Family
income is not a criterion to receive the Card. Large Family Card
holders have the opportunity to get cheaper entrance to cultural
institutions, leisure centres and bookstores across the country,
making it easier for large families to enjoy recreation and reduce the
cost of living. The Large Family Card is valid both in public
institutions and in private companies5;
3) annual parental leaves, which can be used by all parents
(working full-time, self-employed, unemployed, farmers, contract
workers and students) who receive a new parental benefit of
1 thousand zlotys for even 12 months6;
4) labour taxation system7 providing reliefs related to the fa-
mily situation of the taxpayer. Wage taxation can serve as a stimu-
lus to influence the behavior of both employers and employees
on the labour market. It can be executed through the implementa-
tion of reliefs, exemptions or higher rates to differentiate charges.
In practice it depends on the situation of the employees’ household.
It includes separate tax wedge calculations8 related to the civil
status (single and married persons) and the number of people
earning9;
5) two preferences in income tax. One of them is the possibility
of joint taxation of spouses, as well as single parents, as if the child
was the second earning member of the family, and the second is
tax exemption for children (since 2007)10.
And last but not least, non-financial, but significant, instru-
ments – the development and availability of childcare facilities
(nurseries, kindergartens, school childcare, childcare for children
and young people with disabilities), as well as legal solutions ena-
32
bling the merger of work and family life (flexible time work, part-
time work, etc.).
A simple comparison of the measures in force until 1 April
2017 shows that the “Family 500+” programme has increased the
scope and level of benefits for people with children, especially as
compared to family allowances (Szarfenberg 2017: 2).
The 500+ benefit is a solution similar to the German benefit
known as Kindergeld. This family benefit, in line with the income tax
law, is granted to citizens of the European Union who work in Ger-
many or conduct business activity and are subject to the “unlimited
tax liability” (from all of income (incomes), regardless of location of
sources of income). Kindergeld is granted to children residing in
one of the Member States of the European Union. The child does
not have to be registered in Germany. The allowance is, in principle,
granted to each child until it reaches the age of majority. In case of
children above the age of 18, Kindergeld can be paid up until the
age of 25, as long as the child is studying.
FACTORS DETERMINING THE QUALITY OF LABOUR
RESOURCES AND THEIR PROFESSIONAL ACTIVITY
The size of the labour resources and their professional activity
are complex categories, influenced by many diverse factors that
can be classified into five basic groups. These are demographic,
legal, economic, socio-cultural and institutional factors.
Among demographic factors there are the quantity and stru-
cture of the population by age, sex, education and migration.
1. Age is important because the smallest proportion of
professionally active people is formed by the oldest and youngest
groups of the working age. In the first case, this is the result of the
gradual deactivation of people in the pre-retirement age, mainly due
to the acquisition of pension or early retirement options. In the case
of young people this is mainly due to staying within the school
education system.
2. The structure of the population by sex, because women,
due to the well established pattern of social roles, are characterized
by lower professional activity at all ages, and especially at the age
of increased maternity and parental responsibilities.
3. The structure of the population by level of education, as
we can observe a principle that the higher is the level of educa-
tion of labour resources, the bigger is their professional activity.
Gary Becker in the “Family treatise” treats the family as a small
factory (for example, the higher the earnings, the greater the
willingness of women to pursue a career, when staying at home
becomes unprofitable). He explains by rational economic rea-
sons the fact that more educated people have fewer children (Trea-
tise... 1981).
4. Foreign migrations which are important depending on their
direction and size, as well as the customs of the migrant’s home
country.
Legal factors affect the professional activity of labour resou-
rces. These factors will include the legally permitted acquisition of
pension rights, affecting the length of the working time of indivi-
duals, and thus the duration of their presence on the labour mar-
ket. The trend is simple: the higher the age of acquiring pension
rights, the greater the supply of labour. Similar pattern but with the
opposite direction exists in the case of compulsory school age.
Also valid is the working time, minimum wage, and availability of
alternative sources of income (e.g. unregistered or non-work
related).
As for the economic factors, in the first place, it is important to
point out the supply and prices of products offered to consumers.
The high level of those in relation to regular salaries and income
derived from alternative activities can induce and / or increase la-
bour related activity and vice versa.
In the case of choice between work, free time and other duties,
two effects are observed: substitutability and income, operating in
the opposite direction:
Social Policy No 1 ENG/2017
 – the substitution effect leads to an increase in the number of
working hours, because free time, which has become relatively
more expensive, is replaced by additional income. There is therefore
an increase in the labour force’s activity;
– the income effect reduces the number of working hours as
a result of increased purchasing power of an individual leading to
an increased demand for free time or other activities. This results in
a decrease in the labour force’s activity.
Thus reducing salaries and restricting access to alternative
activities can affect both the reduction and the increase in pro-
fessional activity.
The socio-cultural factors determining the amount of labour
resources and their occupational activity include the prevailing
traditions and customs of the population. The level of professional
activity is determined to some extent by the preferred family model
or the traditions of professional work of women, as well as attitudes
towards the work of both men and women.
Institutional factors determining the size and structure of the
occupational group are connected with the environment of the
process of work. This means, first of all, the development of the
institutions of childcare and dependent care. The lack of such faci-
lities, or limited access to them, caused, for example, by the high
price of their services, affects the reduction in professional activi-
ty, especially (but not only, of course) of women and low-skilled
persons.
Institutional factors will also include the situation on the labour
market. There is a phenomenon of discouraging the search for work
in the situation of high unemployment. Persons who are discou-
raged from seeking work are transferred from the professionally
active population to the passive population. On the other hand,
professional activity is growing in the context of good labour market
conditions characterized by low unemployment.
ABOUT THE “FAMILY 500+” PROGRAMME
income families. Low income families received it also for the first
child12.
After the election was won by this party, the law determining
the terms of acquisition of the right to childcare benefit and the
rules of granting and paying13 was adopted. The programme has
been in operation since 1 April 2015.
In 2017, measures were taken to make the aid more effective
and reach the people to whom it was directed. In short, it was
designed as a program seal to make it difficult or impossible to file
fraudulent claims14.
The “Family 500+” programme (hereafter 500+) was very
well received by people with children, as indicated by the results of
the survey. After almost a year of operation, its acceptance level
remained very high (77%, with 20% disapproval) (CBOS 2017).
As a result of the “Family 500+” programme, an additional
amount of 27 billion zlotys was transferred directly to the hands
of Poles in 2016. According to the declarations of disposers,
three quarters of this money was spent on children or partly on
children. Most of the money from Polish families, according to
the declarations, was transferred towards companies offering acti-
vities for children, especially sports, as well as for the tourism and
cultural industries15. In May 2017 the program covered about
3.9 million children up to 18 years (about 57.7% of all in Poland)
living in about 2.6 million families16.
In 2017, the “Family 500+” programme will be valid throughout
the year. The government assumes that it will cost around 23 to
25 billion zlotys or more17. This money will go to families with
children.
Let us consider what is and probably will be the impact of
500+ on the number and professional activity of labour resources
in Poland, though it’s not an easy task. There are no reliable and
reasonably comprehensive studies in this area yet, so the con-
siderations may be based on the knowledge contained in the
source literature and in the research experience of the author.

The “Family 500+” programme was announced in 2014 in SHORT TERM

the election program of one of the political parties. This program
provided support for families with children, especially large fami-
lies, by a monthly childcare benefit of 500 zlotys for each second,
third and subsequent child in the family.
In its original form, the benefit was granted to any raised child
up to the age of 18 years11. Families with two children were to
receive 500 zlotys, with three children – 1000 zlotys, with four –
1500 zlotys. This rule applied to each subsequent child and also
applied to single parents. The benefit was universal except for low-
The short (or rather very short) term means here the period
between the first quarters of 2016 and 2017, which was deter-
mined by the availability of the published data on the Economic
Activity of Population conducted by Central Statistical Office (GUS)
(Table 1).
The data in Table 1 indicate that the first 500+ experience in the
study period did not negatively affect the size and professional acti-
vity of the labour resources. The coefficient of activity was almost

Table 1. Selected information on the labour market (data for the first quarter of 2016 and 2017)
Coefficients Family and home
Employment Economically Number of non-working
of professional responsibilities as a cause
Indicators inactive people for 1000 workers
activity of occupational inactivity
Specification
Q1. 2017/ Q1. 2017/ Q1. 2017/
Q1. 2016 Q1. 2017 Q1. 2016 Q1. 2017 Q1. 2016 Q1. 2016 Q1. 2016
Q1. 2016 Q1. 2016 Q1. 2016
% ths. % ths. % ths. %
Total 56.1 56.2 52.1 53.2 13,495 99.3 918 95.9 1,702 105.3
Men 64.5 64.8 60.0 61.3 5,212 98.8 667 94.8 . .
Women 48.3 48.4 44.9 45.8 8,283 99.6 1,225 96.7 . .
Cities 56.0 56.0 52.3 53.2 8,169 99.4 912 96.4 . .
Rural areas 56.2 56.6 51.9 53.2 5,326 99.3 926 95.1 . .
By education level
Tertiary 80.2 80.2 77.5 78.2 . .. .. .. .. ..
Post-secondary and
64.7 63.9 60.7 60.7 . .. .. .. .. ..
vocational secondary
General secondary 50.8 51 45.4 47.0 . .. .. .. .. ..
Basic vocational 58.7 58 53.4 53.9 . .. .. .. .. ..
Lower secondary, basic
16.9 16.4 14.1 14.3 . .. .. .. .. ..
and incomplete basic
Source: GUS 2017.

Social Policy No 1 ENG/2017 33

similar, and the employment rates were even slightly higher. There
were fewer passive people; the number of unemployed per 1000
employed was also smaller. Businesses continue to see job crea-
tion processes rather than liquidations (the number of employees
has increased from 16,012,000 to 16,281,000, or 8.3% in the
same category among men and women). This has been the case in
both the general population and in the collective of men and
women, in cities and in rural areas. The average number of hours
spent in main and additional work increased by 1% (by 0.2% among
men and by 1.6% among women).
The number of employed persons increased mainly due to
employment on the basis of employment contracts, with the use of
indefinite contracts replacing fixed-term contracts (3.2%, 3.8%
respectively). This demonstrates the process of adjustment on the
demand side of the labour market.
However, this is not the result of a lack of response to 500+,
which would be an unauthorized over-interpretation. During this year,
we faced a continuation of the decline in population and labour re-
sources, and above all the improvement of situation on the labour
market (the unemployment rate decreased from 7.0% to 5.4%). This
indicates that, at the same time, new job opportunities have emerged
(the number of job vacancies has increased from 358,000 to
430,000, or up to 1/5), average job search time has decreased from
11.2 to 9.9 months, And the number of unemployed people who lost
their jobs decreased by almost 30% (from 476 thousand to 336
thousand).
However, it should be noted that:
– firstly, the employment rate of people with relatively high
qualifications (especially with higher education) has increased.
Among people with low qualifications there are no increases, there
are even some decreases;
– secondly, the number of inactive people indicating that family
and home-related responsibilities are the main reason of their
situation has increased more than 5%;
– thirdly, the number of unemployed women who resigned
from seeking work increased by nearly 30% (29.2% exactly) from
24 thousand to 31 thousand. Such increase was not recorded du-
ring this period in the population of unemployed men, on the con-
trary – their number decreased (from 49 thousand to 40 thousand,
i.e. by 9.4%) (GUS 2017).
Perhaps it was the effect of expected changes.
MEDIUM TERM
The 500+ benefits are not subject to PIT tax, but only VAT and
excise taxes when spent on domestic consumption or customs
duties on foreign purchases. In this sense, they are indifferent to the
tax system, especially to labour taxation; they do not directly affect
the market of products and factors of production. The direct impact
of 500+ can only be discussed in the context of the amount of
benefit. In case of lack of revaluation by the inflation rate, the 500+
benefit will melt, this becoming an incentive for professional activity
(unregistered or ad hoc jobs). Of course the opposite will happen in
the opposite case.
This benefit, however, significantly influences the relative be-
nefits of households resulting from the professional activity
of parents. This result in a number of consequences, including
the change in the structure of the risk of poverty: the house-
holds without children will be subject to higher burden (Szarfen-
berg 2017: 6). This will stabilize (ceteris paribus) their professional
activity.
Further changes in the supply of labour resources and their
professional activity, taking into account all factors determining them
will result mainly from the deteriorating demographic situation,
which means negative impact of these changes on the potential
development of the Polish economy18.
In 2016, the Center for Economic Analysis (CenEA) published
an analysis of the impact of the childcare allowance paid under the
34
500+ on parents’ decisions on employment. These analyses show
that over the course of several years, the program can reduce the
number of employed parents by about 235,000 people. About
25 thousand single parent families and over 200,000 people in
married couples will give up work – largely those in which both
parents are currently working. The resignation from employment
will be undertaken mainly by women, persons with lower or se-
condary education and those living in cities up to 100 thousand
residents and in rural areas. The program will discourage from
professional activity parents in 3+ families as well as those with
one and two children (Program... 2016).
It is difficult to discuss specific numbers, but we have to agree
with the general tendencies, especially when benefits are not
inflation linked. It will not work on such a scale in the opposite
case.
The expected deactivation and depletion of labour resources in
the medium term will deepen the shortage of labour force, espe-
cially low-skilled workers and specialists. Employers today in-
creasingly point to the lack of hands to work as a barrier to the
development of businesses19. With the difficulty of finding the right
people on the labour market we are facing the growing discrepancy
between the preferred and the actual number of hours worked. This
should improve the negotiating position of persons employed in
business entities, and further – their wage claims, affecting the
growth and structure of wages and, further, global demand. It may
also accelerate inflation, change the price-earnings ratio in the
labour market, and strengthen the tendency to relocate jobs. In the
extreme case, the rising labour costs may result in the outflow of
foreign direct investment.
The probable decline in work-related disruptions will be
accompanied by a decrease in the professional competence of
inactive persons. This will lead to difficulties in returning to the
labour market and will cause the need to launch special programs
for them, developed and financed largely by public authorities. This
will especially be the case for members of families with long-term
disability, long-term unemployed and / or low-skilled, willing to
work in manual labour posts. Their reinstatement will be difficult,
time-consuming task but well recognized in the long-term unem-
ployment survey (see, for example Bronk et al. ed. 2014). The re-
maining employee groups should not be much affected by the
500+ benefit.
Temporary absenteeism on the labour market has the unde-
sirable effect of limited access to social security (disability, sick-
ness, accident and retirement). In extreme cases this can lead the
today’s 500+ beneficiaries to deprivation of their right to a pension
or a substantial reduction in their future pensions.
The demand for workers is partly met by foreign immigrants
from Ukraine, Belarus, Russia and Moldova. This requires a well-
thought-out immigration policy that promotes the creation of a ba-
lance in the labour market (Organiściak-Krzykowska 2017: 26, 28).
Experiences of other highly developed countries indicate that these
employees (not including a small group of high-class specialists) in
the labour market are working in the segment with a relatively low
level of wages, lack of opportunities for career advancement, limi-
ted opportunities for career development, job instability and other
similar (negative) features. This is offset by differences in exchange
rates and thus relative wages. These considerations apply only to
temporary, short-term, ad-hoc migrations.
It is also possible to increase the influx of foreign workers and
their families into the Polish labour market. That would require
public expenditure – preparation of appropriate facilities to allow
them to integrate with the inhabitants. It considers institutions of
a social, educational and cultural character, also providing assis-
tance to a certain extent. The assessment of key competences (in
particular the ability to communicate in Polish, IT competencies
and initiatives and entrepreneurship) should be the subject of their
work, then the identification of education and training needs of
immigrants, and further assistance in their fulfilment.
Social Policy No 1 ENG/2017
 For obvious reasons, the 500+ benefit mostly affects the ba-
lance of public finances, and especially the state budget. The ge-
neral government deficit in 2016 amounted to -4,435 million zlotys
(2.4% of GDP) (GUS 2016). The central institution’s deficit was at
that time – 48,157 million zlotys. Let us recall that about 27 billion
zlotys of this was transferred to the hands of Polish families. In the
period January-April 2017, the estimated budget deficit amounted
to 0.9 billion zlotys (1.5% of GDP), which is likely to be significantly
lower in the full-year perspective (MF 2017).
This is good news. If it is not confirmed, we should reconsider
the structure of state expenditure, and especially the size of in-
vestments. Their limitation will reduce the demand for employees
needed to deliver them, who are employed within the public sector
(by government and local government).
It is difficult to make predictions about the size and structure of
demand for employment in the private sector. This demand is, as
we know, a derivative demand and (ceteris paribus) is due to the
demand for goods and services in the economy and the means of
their production and distribution.
The magnitude of demand for goods and services is determi-
ned by a multitude of factors, primarily of an economic nature. The
problem is that the prediction of economic phenomena is usually
subject to very high uncertainty. Economic forecasts in relatively
stable times are generally made for short periods (1–2 years),
much less frequent are medium-term ones (5 years) and quite
sporadically and at a high level of generalization for long periods.
Therefore, when attempting to establish intermediate periods
for labour market phenomena, the predictability of the behaviour of
its demand side should be taken into account. However, let us note
that according to the European Commission’s forecasts until the
end of 2018 in the EU countries, including Poland, the slow growth
of employment can be expected to continue, with the gradual re-
duction of the current growth rate (NBP 2017: 11).
In addition to lowering the economic growth rate, the impact of
ICT-related information and telecommunications will be likely to
have an ever-increasing impact on ICT employment and the emer-
gence of an information society. It often offers jobs without any
professional training (in particular IT), where the only need is to
have a computer with Internet access and elementary skills to use
it, which is possible nowadays in almost every family. The know-
ledge base on the labour market was also enriched, mainly about
employers and wages.
A factor that may affect the demand for labour is, as previously
pointed out, a change in the ways of satisfying some of the needs
of consumers using networks of informal contacts. They may be
interested be ad-hoc jobs, while remaining (officially) inactive.
SUMMARY
The “Family 500+” programme has a short history and only
a few research papers have been dedicated to it so far. However, it
should absolutely be studied because this type of family policy
instrument was introduced for the first time. A list of factors taken
into account in identifying the factors (solutions) affecting the remu-
neration and the supply and demand side of the labour market pro-
posed in the article is not complete. The paper did not aspire to do
that. It is based on too fragile premises to be treated as pure
research study. It would be useful to study the heuristic methods to
predict future phenomena. It would also be useful to use the Ger-
mans’ experience and the influence of Kindergeld on the labour market.
The analyses contained in the paper, regardless of how in-
complete and subjective, indicate that over the next few years the
following consequences of the Family 500+ program for the labour
market should be considered:
1) decrease in the supply of labour resources and their pro-
fessional activity, especially in certain population groups,
2) increase in salaries,
3) decrease in demand for labour.
Social Policy No 1 ENG/2017
These tendencies will be strengthened by other phenomena
present on the Polish labour market and in its surroundings in the
foreseeable future.
Family policy in Poland cannot be based on financial assistance
to households only. It is about working out solutions that will
simultaneously provide their members with a commitment to the
labour market and job stability.
1
Constitution of the Republic of Poland of 2 April 1997 (Journal of Laws
of 1997, No. 78, item. 483).
2
The term “family policy”, as used today, appeared for the first time in
A. Myrdal’s work (1941).
3
The results of the CBOS survey from 2013 indicated that love and frien-
dship were the highest in the hierarchy of Polish youth (41%) together
with successful family life (48%). Acquisition of interesting work in line
with interests as a goal was set by 41% of respondents, and 35% aspired
to achieve high professional status (CBOS 2013).
4
INFOR.PL, Amount of family allowance in 2017/2018, http://kadry.
infor.pl/kadry/ubezpieczenia/zasilki_i_inne_swiadczenia/757241,
Wysokosc-zasilku-rodzinnego-20172018.html [accessed on 22.7.2017].
5
MRPiPS, What is the Large Family Card? http://www.mpips.gov.pl/
wsparcie-dla-rodzin-z-dziecmi/kar ta-duzej-rodziny/czym-jest-karta-
duzej-rodziny/ [accessed on 30.7.2017].
6
Elements of Polish pronatalist family policy were presented in Witkowska
2017.
7
Labour taxes include income taxes and social security contributions
(paid by the employee and by the employer). Income taxes from em-
ployed workers are not directly related to the labour market, although
they affect the behavior of both partners involved in the labour process,
i.e. employers and employees. Social insurance contributions have
direct influence on the functioning of the labour market (Boeri, van Ours
2011). Tax systems in many countries take into account the personal and
socio-economic situation of taxpayers. Adjustment to their payment
capacity is based on the tax solutions adopted there, taking into account
the family situation, especially the maintenance of children (Ślesicka 2011).
8
The tax wedge is the share of labor taxation in the total cost of work bor-
ne by the employer. It also covers the various types of financial services
provided by an employee, such as income-related workmen’s allowan-
ces to increase financial incentives for work (see OECD 2014)
9
Detailed analyses (Kryńska 2015) have shown that relatively small
differences in tax burdens on persons who are members of different
types of households are observed in Poland. There is no doubt that the
taxation of work in Poland does not take into account the financial
situation of low-income people, especially those who are upbringing
children. This creates circumstances that favour the pauperisation of
certain social groups, on the one hand, and on the other – is at odds with
the declarations of necessity of pursuing a pro-family policy. These
minimalist solutions result the situation, where one of the important
instruments of family policy, namely taxation, is not used to meet the
family policy goals.
10
More on this topic: Rękas 2012: 426–429.
11
The Law and Justice (PiS) program 2014, p. 108, http://pis.org.pl/do-
kumenty [accessed on 17.7.2017].
12
The benefit for the first child was granted only if the income in the family
does not exceed 800 zlotys per month per person. In the case of fami-
lies with disabled children the threshold was higher and amounted to
1.2 thousand zlotys.
13
Act of February 11, 2016 on state aid in raising children (Journal of
Laws, No 2016, item. 195).
14
Among others, by people living in informal relationships and allegedly
single parents or people fictitiously reducing their income
15
Research Institute ARC Rynek i Opinia, http://www.arc.com.pl/program_
rodzina_500_plus_nie_tylko_dla_dzieci-41999581-pl.html [accessed on
20.7.2017].
16
Data obtained from the Ministry of Family, Labour and Social Policy [July
2017].
17
Budget for 2016 and the Family 500+ programme. Experts argue if
the state can afford it, https://www.money.pl/gospodarka/wiadomosci/
artykul/budzet-2016-i-program-rodzina-500-plus,81,0,2010193.html
[accessed on 20.7.2017]. Morawiecki: The cost of the 500+ programme
in 2017 may amount to as much as 25 billion zlotys, http://business.onet.pl/
35
 enter tainment/kraj/morawiecki-koszt-programu-500+-w-17-may-
wyniesc-nawet-25-mld-zl/y6mfmp [accessed on 20.7.2017].
18
Not mentioning the impact of lowering the retirement age.
19
The results of the survey of economic entities in the textile industry,
clothing and companies dealing with the design of fabrics or garments
located in the Lodz region. The study was conducted for the project
Textile industry in the future – analysis of the labour market in the area
of the textile and clothing industry in the Lodz Region in June 2017. The
lack of job candidates (and mainly the seamstresses) was mentioned,
due to (among other things) a negligible educational offer, which was
accompanied by little interest, and above all the resignation from the
work of women who received 500+.
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SUMMARY
The aim of this paper is to identify the likely impact of one of the family policy instruments in Poland, the
“Family 500+” programme. The analyses were focused on the supply side of the labour market. The demand side,
without neglecting it, was treated as one of the determinants of labour supply. As we are still lacking in reliable
research, as far as comprehensive research in this area is concerned, the analysis is based on the knowledge
contained in the source literature and the research experience of the author. The article presents elements of family
policy in Poland, factors determining the number of labour resources and their professional activity, the programme
“Family 500+” and its influence on the Polish labour market in the short term, as well as the probable impact in
the medium term.
Keywords: family 500+, labour market, family policy, work resources, professional activity
Keywords
36
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Social Policy No 1 ENG/2017
CHILD CARE BENEFIT 500+ AS COMPONENT OF LOCAL KNOWLEDGE:
ATTEMPT TO GET INSIGHT
INTRODUCTION
A lively debate is taking place on the 500+ childcare allowance
(introduced by the Act of 11 February 2016 on State Aid in Raising
Children, Journal of Laws 2016, item. 195), involving both axiolo-
gical and economic rationales, with the latter having often an in-
strumental character, as they are interpreted as arguments in poli-
tical disputes. This approach is not conducive to the quality of the
ongoing discussion. As is commonly known, people usually have
different points of view, and disputes over values are usually un-
decidable, although M. Ossowska once taught that this does not
mean that they cannot include logical arguments.
In the public debate – taking place both in the media and in
scientific literature – we can also find research results and articles
devoted to the 500+ family allowance and focused not only on the
broadly understood influence of this benefit on the situation of
Polish families but also on economic processes. Past analyses and
studies related to benefits are generally academic. The authors pre-
sent complicated models illustrating the details of the discus-
sed issue (see, among others, Szarfenberg 2017; Gromada 2017;
MRPiPS 2016).
It is therefore possible to say that the debate over the 500+
benefits is “elitist” in the sense that it involves competent persons
having access to opinion-making public media. There is no publi-
cation showing how the new 500+ benefit is perceived by its
beneficiaries and how it fits into their “local knowledge”.
The aim of this article is to show the “sample” perception of
500+ benefit among its beneficiaries in two categories of members
of the local community: the category of family members benefiting
from the social assistance system due to poverty and the category
of “experts” who have contacts with these people on a daily basis
and have their own views on how childcare benefit has changed the
daily lives of family members in difficult financial situations and
how it is perceived by them.
The information contained in this small sample of materials
shows the need for in-depth qualitative research on the perception
of the 500+ benefit in families in difficult financial circumstances
and in other categories of families. It is not excluded that conducting
such research in various social categories could produce interesting
results. The attempt to locate perceptions of the 500+ benefit in
“local knowledge” structures would be equally important.
In summary, the materials presented below are intended to
illustrate the functioning of the 500+ benefit in the awareness of
the inhabitants of one of the Polish communes, where research
was conducted on the processes of poverty inheritance for several
months in the first quarter of 2017*. The 500+ benefit was a se-
condary thread in that research, but it appeared with a lot of inten-
sity in the statements of local experts, i.e. local public employees,
* Articles used in the article were collected as part of the project Potentials
– new forms of social capital in the municipality of Opatów, funded by
the Operational Program Knowledge-Education-Development (PO WER.04.
01.00-00-DU26/16), implemented in partnership by the Institute of La-
bour and Social Policy, the City of Opatów and Osi CompuTrain. As part
of the study, 10 case studies of families touched with poverty inheritance
were conducted as well as 22 in-depth interviews with staff of institutions
who have daily contact with families threatened with the processes of
poverty inheritance. The employees of these institutions (e.g. social wor-
kers, family assistants, teachers, school educators, community room
workers, employees of the regional family assistance center) are gene-
rally called experts because of the requirement of anonymity.
Social Policy No 1 ENG/2017
Kinga Pawłowska
Warsaw University of Technology, Warsaw, Poland
working for the social welfare centre, the municipal office, the
school or the police, and in the statements of members of families
supported by the social assistance system.
Apparently this benefit awakens in the local community a great
deal of emotion in a particular continuum: from satisfaction and
newly acquired sense of security through regret and disappointment
to irritation, jealousy and anger. Intricate, complex emotions are
shared by both local staff who see the use of the “500+ benefit” in
families supported by the social assistance system, as well as fa-
mily members benefiting from both the social assistance system
and the “500+ benefit”. Sometimes, within one family, feelings about
the impact of the benefit are extremely different.
It is not excluded that the public discussion of the 500+ is
somewhat distorted by the hidden assumption that people are
consistent in their views. More precisely, the participants in these
discussions assume that the human “living worlds” are internally
coherent, that human views compose some internally consistent
whole, etc. In particular, it means that those participants are con-
vinced that people can be divided completely into supporters and
opponents of the benefit. In social philosophy such coherence is
expected from a treaty. But can such coherence be prudently
expected also from people submerged in the peculiarities of “local
knowledge”?
“LOCAL KNOWLEDGE”
C. Geertz, the adherent of “local knowledge”, would probably
give a negative answer to the above question about the coherence.
“Local knowledge” is, in general, a cognitive order manifested in
the “common idea” rooted in the experience or in “common sense”.
According to Geertz, it is a full-fledged “cultural system”, no less
important than scientific considerations in which “objective” re-
search results are presented (Geertz 2005b).
If we are to seriously treat publicly-held views on the need for
a close relationship between science and social realms, it becomes
inevitable to learn how people think. It goes without saying that this
is one of the key issues investigated by many classics of anthro-
pology, such as A. Radcliffe-Brown, B. Malinowski, E. Evans-Pri-
tchard and L. Lévy-Bruhl.
However, it must be clearly stated that “local knowledge” is
governed by its own laws and is different from what can be found
in coherent arguments of scientific work or journalism marked with
ideologies. “Local knowledge” is generally chaotic and disorderly,
just like human thinking, filled with personal experiences and re-
lated emotions. It is also difficult to reach the meanings hidden in it.
According to Geertz: Anthropology can be useful here as usual:
pointing out unusual cases, comparing them with others in a chan-
ged context. When we look at the people who draw other con-
clusions than we do, who take other teachings in the hard school
of life, we soon realize that everyday thought is more problematic
and more mysterious than it seems from the perspective of Pa-
risian cafes or the Oxford Common Room. As one of the oldest
districts of human culture – not really ordered or uniform [bolded
by K.P.] but still striving beyond the labyrinth of small streets and
squares to a less coincidental shape – it demonstrates in a par-
ticularly obvious way the motives for which these settlements were
built: the desire for the world to become obvious (ibid.: 85).
Taking all this into account, it seems reasonable to know these
“local knowledge” elements that begin to build around the “Family
500+” programme, which is relatively new but raises emotions from
the very beginning. In line with this version of ethnography, which
37
emerges from Geertz’s work, what separates the research process
from the “ordinary” qualitative research is the attempt to interpret
the content of the collected material in the context of all the in-
formation obtained during the study – including those coming from
the researcher’s observations.
Geertz described it this way: [...] Ethnography comes down to
a thick description. What an ethnographer must really face... is
a huge multitude of complex conceptual structures, many of which
will overlap or intertwine with each other... Practicing ethnography
is like attempting to read a manuscript... – a manuscript written
in a foreign language, faded, full of abandonments, inconsistencies,
suspicious corrections and biased comments [...] (Geertz 2005a:
24–25).
It is perhaps worth to complement the metaphor of the “ma-
nuscript” used by Geertz with the metaphor of “palimpsest” to
emphasize the overlap of various “networks of meanings”. It can be
reasonably assumed that the way of perceiving the childcare be-
nefit is very strongly dependent on the previously formed knowledge
resources that influence the reception and interpretation of the new
provision by the respondents.
The term of “local knowledge” has been treated in this article as
an inspiration. Perhaps it will also be a source of inspiration for
researchers who will decide in the future on an exhaustive analysis
of the rooting of the new 500+ childcare benefit in broadly under-
stood “local knowledge” systems.
500+ BENEFIT IN OPINIONS OF MEMBERS OF THE FAMILIES
Firstly, we will provide opinions on the 500+ benefit expressed
by members of families benefiting from the social assistance
system due to poverty. These opinions, as evidenced by the colle-
cted materials, are very diverse, sometimes also within a single
household.
Some respondents, as expected, clearly experienced a positive
impact on the daily functioning of the household. This is evidenced,
among others, by the following statements (The original spelling
was retained in quotes, while all names, surnames and some local
names were changed. All bold in quotes are from the author of the
article).
• [And do you feel the impact of this 500+?]. Well, with the
500+ it’s a little easier... [1,000 zlotys] I take this 500+ plus work,
so it’s easier. Because at first, without the 500+ – I did have to do
some side jobs. [But legally, or in illegally?]. Illegally. Well, my wife
was also doing her best. But now with the 500+ it’s a little
easier...
• [Please tell, madam, has this 500+ somehow concerned
you...?]. It’s Krzysiek, who receives it. And besides, from the help
centre, I’ve been given a “temporary benefit” for two months, it
reflects 370 zlotys, but we have a lot of fees. And apart from all we
buy stuff for children, clothes or you know... shoes for winter.
Tomorrow he will take the money, that’s it. First we pay the fees
and then spend the rest on food for kids. When someone gets
a payment, we usually spend it on food. More food.
• [And has the 500 + changed something in your life, in the
life of your family? Do you feel it and how do you feel it?] I do feel
it because before, as I was receiving for living only childcare and
family allowances, it used to be enough only for part of the month.
When I pay all the fees, I do not even have money to buy shoes.
And now, I’m bit more sure, so when my kid comes, saying “Mom,
my shoes broke open,” I know I can just go to the store and buy
new ones. I know I don’t have to, as they say, save money for rainy
days, to have something in case of some incidental problems.
Now I’m sure that, just in case, I can always afford to buy the
bread, that at home there will always be something to eat,
something warm for the children, also to dress them. I’m sure
they are well taken care of.
Family members statements indicate that the 500+ benefit are
designed to meet the immediate needs of families, including fees,
38
clothes and food. In addition, these measures allow to build an at
least relative sense of security, where everyone can afford to buy
a brad when needed or cover unexpected expenses, such as buying
new shoes or paying for a school trip. None of the interviewees
confirmed unequivocally to have managed to save some money.
It is therefore clear from the collected material that the funds
coming from the services are spent on a regular basis and regulate
past liabilities, including bailiffs.
By this point, “local knowledge” seems predictable and at least
to some extent in line with the straightforward idea of the legislator.
This uniform smooth image significantly is however complicated by
two independent statements made by women, who – according to
the context of the interviews – are most involved in the management
of household budgets.
• [How do you assess the 500+, did that change your
situation or not? And how do you generally spend that money?].
Live has changed, I spend it on kids, because the kids have grown
up and the clothes are not cheap now. As they gave us 500+,
prices went up. It’s a bit better, but it’s not enough. Once you
start spending, it literally disappears in a moment. Because
clothes for children are expensive.
[I’ve already heard you have the impression that prices have
risen as the 500+ has come – do you feel something like this...].
Yes, I do, everybody’s complaining. Before the 500+, it was
different.
[And you know what prices exactly has risen?]. Well, prices of
food, clothes went up. And shoes, basically everything.
[Do you manage to save some money?]. No, not really.
• [And do you feel the impact of 500+? How has your life
changed?]. How to say it? When 500+ came, prices went up, as
they say, gradually, yes.
[But what do you mean by “prices”, all of them?]. Prices,
prices up here in X. In one shop you can buy a little cheaper, but
the second one is too expensive. Prices have changed a lot.
[And why do you think this is the impact of 500+?]. Because
before 500+ we got enough money (boy). We could afford more
(mother). And as 500+ came in, we started to experience some
shortcomings.
[So you do not feel much the impact of 500+?]. I thought it will
be possible to save a bit, but it is hard to save.
[Yes just spend it for current needs?]. Yes, for current needs.
Both respondents are convinced that local retailers have
responded to the service by raising prices for goods, including
those for children, such as children’s clothing. Consequently, in the
first statement there is a vague conviction that: It’s a bit better, but
it’s not enough. In turn, the second respondent, together with
a teenage son, estimates that after the introduction of the 500+
benefit, her family situation has not improved, it has not remained
the same level, but it has even worsened and it is currently difficult
to “make ends meet”, while earlier it was possible.
Those statements, surprising in the context of the purpose of
providing the benefit and common expectations related to the
benefit, can be interpreted in many ways, but under condition that
we assume that the category of truth in describing the “local
knowledge” of people is moderately applicable. The first and sim-
plest solution would be to empirically verify the claim that prices in
local stores increased after the introduction of 500+. Perhaps
opinions derived from the everyday experience describe the local
reality better and more accurately than detailed analyses of econo-
mists, who usually work on much larger samples, and the per-
spective of an average citizen is not recognized by them.
However, if forecasts and economic trends prepared by eco-
nomists would be consistent with the respondents’ opinions, this
could indicate the particular vulnerability of people in financial
difficulties to fluctuations in commodity prices. It is well known that
those with the smallest budget have the largest share of their
resources allocated to basic goods – fees and food. It is therefore
possible that price fluctuations that are not perceived by a person in
Social Policy No 1 ENG/2017
a better financial situation are immediately felt in less privileged
households.
However, if the observations of the respondents were not in line
with reality, in the sense that the prices would not change, then the
question is what stands behind this paradoxical and inconsistent
interpretation of the “local” reality and the 500+ benefit? One po-
ssible interpretative pathway could lead to mental coping with one’s
own helplessness, on which the 500+ benefit has no greater in-
fluence. But the question of what might cause the negative inter-
pretation of the impact of the 500+ benefit on people’s daily lives
remains open.
The interpretation of the collected material becomes even more
complicated given the information that sometimes conflicting opi-
nions can be obtained from the members of one household. One of
the respondents rated the 500+ benefit as definitely positive.
• [How do you assess 500+? Has your situation changed
under the influence of this 500+?]. It has changed, a lot has
changed... With the 500+, well, I could for example buy clothes fir
kids not with my pay, so some expenses were covered... So it’s
going to be better now, it is kind of profitable... So, yes, that helps
a lot. [And do you feel it, sir?]. Yes, it’s easier. Much better.
The above quoted statement would be not surprising and it was
in line with expectations but the author was the husband of the
previously quoted respondent, who said: As they gave us 500+,
prices went up. It’s a bit better, but it’s not enough. It turns out that
within the same household, its members express two different
opinions.
In any case, it is very clear that the “local knowledge” of the
members of the local community, their common-sense and
common beliefs are certainly not uniform. Families as a whole, as
well as their members, differ significantly in this respect. This belief
illustrates the wealth and variety of ways of perceiving and eva-
luating the 500+ benefit, which will become even more evident in
the opinions of local “experts” that will be presented below.
THE 500+ BENEFIT SEEN BY EXPERTS
After a brief presentation of family members receiving support
from the social assistance system, who are also receiving the
500+ benefit, it is time for the local “experts” who work with fa-
milies in difficult financial circumstances.
The topic of 500+ benefit and its impact on the situation of
families, their daily life is very often mentioned in the course of talks
about families benefiting from social assistance due to poverty.
This is particularly important because there are many large families
in the investigated group of families. It is not difficult to calculated
that, for example, in a family of five minor children, in which the
threshold required by the statutory income threshold is not excee-
ded, the household budget got suddenly improved by an additional
amount of 2,5 thousand zlotys. This is a significant amount.
The question then arises as to how those families in financial
distress allocate these resources. Obtaining a direct response from
family members is very difficult, as these people – according, for
example, to social workers – are very discreet on this issue and
they react irritably to any attempt to interfere in the management of
their budget. This is shown, among other things, by the following sta-
tement from one of the respondents: There are families who do not
really want to work with a social worker about spending these re-
sources and planning this budget. The worker is trying to advise
something, how to allocate money at the particular moment, but
the lady says that at this point there is a need to buy something else.
For this reason, much more detail on the impact of the 500+
benefit can be found in the comments of experts, who, based on
daily contacts with families in financial distress, drew up several
interesting conclusions, which show the “overt” and “hidden” fun-
ctions of the 500+ benefit in a new angle.
It should be emphasized that the opinions of “experts” were
very unambiguous and rarely allowed to conclude that the in-
Social Policy No 1 ENG/2017
terlocutor is a “supporter” or an “adversary” of the benefit. As with
any social change, the 500+ benefits also include, in addition to
the benefits, some undesirable effects that the interviewees per-
ceive. Almost in all opinions, ambivalence was present, among
others in the following excerpts.
• The situation was different before the 500+. Because it was
worse even in those large families. For example buying textbooks
for school, the school programs are changing so often, there is no
possibility that one book could be used by several siblings, you
have to buy exercises as well [...]. There were situations that we
had to be support these families, so that they are not left alone.
And we did support then, as much as we could. Well, because we
can give some money but only as much as we can afford.
[And what is the effect of the 500+?]. Much has changed for
the better. As I visit people, I’m surprised because different
things are done, like some refurbishments, the appearance of
the house is changing, the appearance of people change, their
clothes change. You can see on the example of children, there
is no shortage there.
• There was once this little guy, and that was before the
500+, who said “ma’am, they laugh at me. Because they have
Nike shoes, and my mom won’t buy me such shoes, because we
have no money”. Because you now, that was a large family, they
even had no modern washing machines just and old one. She
the woman was so tired with laundry. And the little one stood there
and cried, “I will never have these Nike shoes”. And as I did this
interview, with this family, I pointed out that he was crying [...]. And
not only did they get a new washing machine, an automatic one,
but also some other equipment, shoes for children, jackets, and
those Nike shoes. I can’t even tell you how he reacted: he started
kissing me, sat on my back, we were taking photos, he literally
kissed those shoes. I was so terribly moved. Because to someone
it can be such a little thing... to spend some money on shoes. But
for him it was a lot [in dialect]: “I will go to school and will be proud
of my shoes! Oh let them see, I have Nike shoes as well”... And
that how the 500+ looks like here, that children may ask
parents for such things, for things that they did not have before,
contrary to their peers. who were bulling them a bit. Our village is
so small. Everybody know each other, they go to the bank, the
children are standing in the queue and say, “Your mother is the one
who go and ask for allowance”. You basically cannot hide it [...].
And when they see you coming back from the social service office,
everybody knows you are taking allowances. And they will point it
out. And when it comes to contributions at school or something
like that, they say: “You will not have to pay now, when your mother
takes 500+”. And I think parents need to talk about these matters,
in front of children, because I do not believe that they alone [...]
and that is why they go and say such things. They compare them-
selves to one another. In a larger city people sometimes don’t even
know their neighbours.
• [And as it comes for incomes, do those people have a pro-
blem with keeping their job if they already have one?]. This can
differ. When there are opportunities and such a person is already
implemented in such a system of work, that is currently in force, he
or she is working. But there are situations where you work a little
bit and then stop [...]. Why? Well, how to say it? A little bit due to
laziness, idleness. It must also be said. That it is not so wonderful,
clear. Among people there are so many different personalities, so
many characters... Some of the get bored after a while. He or she
will start to take medical leaves, and then it is well known that the
employer will look for another who will be more willing to work.
And I do not know if it’s because of the years he was sitting
jobless, he got used to the fact that he’s getting some allowan-
ces, which are now considerable, because of those 500+. For
some it is a good way to live... Although this, God forbid, I do not
negate that it is not needed. This is very needed, but there are
some guys thinking “why would I go to work now, there are so
many benefits I can stay at home.
39
 The above quoted passages come from one interview and are
the result of the observation and reflection of one person who is
well aware of the ambiguous consequences of the 500+ childcare
benefit.
The entire continuum of the various “overt” and “hidden” fun-
ctions of this benefit, show s more and less favourable effects, that
appear also in the statements of other experts, who very similarly
perceive the present situation. This situation, shortly speaking,
appears to them as ambiguous – filled with “white”, “black” and
shades of “gray”.
Official remarks by local staff about the 500+ benefit often
start with a long list of different advantages – changes in people’s
housing, furnishings, basic appliances (e.g. washing machines),
changes in the appearance of family members, in their clothing.
The situation of children is also changing, in the sense that, for
example, there are no problems with preparing a school starting kit
for them. That would mean the adult members of the family are
investing in the means coming from the benefit in the general
household. Additional money is also spent on repayment of out-
standing debts.
As can be seen from the collected material, the money provided
by the benefit not only allows them to meet basic needs but also the
needs related to social status, which is an important element of
functioning in a small community. In this circumstances, the basic
social status marker for children are clothes and shoes. The most
important is not their quality, but the brand.
Sometimes it also happens that children’s “status” needs take
the form of explicit claims. Moreover, such claims they are so-
metimes part of a skilful “manipulations” or are used by the parents
who are in conflict with each other. This is indicated by the following
excerpt from the statement of the author already quoted above:
• [And do children take part in this? They know that their mom
gets 500+ and they demand. How does it look like?]. I don’t want
to deny how helpful it is. This 500+ is a great help. But some
people get upset, sometimes they have the right to it and that’s
just how it is. There was for example a dysfunctional family, they no
longer live in our village, there was violence, supervision of the
curator and generally [...]. Only that there were no parenting
possibilities there, the mother was completely unable to cope with
it. Children quickly understood it and it went bad. My mom bought
me a new phone, because she has 500+, my mom went for a trip
somewhere. Only that it was due to the fact that the father was
manipulating these children. It was a struggle of parents with the
kids used as methods to fight. So when the kid was saying he
or she needs something, then the father was replying: “And why
is your mother having some problem with that? After all she gets
the 500+”.
[Because it is the mother who receives it, not the father?]. Yes.
And this girl, who now goes to V–VI class, she used to come to her
mother and say to her: “You got those 500+? The we are going
to Ostrowiec!”. And they harassing the mother, so she couldn’t
cope with it, and they were finally were all going to Ostrowiec.
And the girl used to say, “You will buy me this and that, and also
this”. And she was calculating: “Well, you have not spent that
500 zlotys on me yet, did you?”.
Spending this benefit on children, as seen in the above quota-
tion, can also take on a caricatured form when children are ma-
nipulated by their parents, begin to overbid parents and force them
to determine how they will use the 500+ benefit. This approach
does not necessarily have to be consistent with their broadly
understood good, as it is based on the consumer needs generated
in a peerless environment. It turns out that it is not always the best
solution to spend money directly on the needs of children and to
satisfy their wishes.
Another unintended consequence of introducing a childcare
benefit is that the reluctance to work by people benefiting from the
social assistance system due to difficult financial circumstances or
even abandoning work. This opinion appeared in the statements of
40
experts very often, in a variety of versions, as evidenced by the
following excerpts from the statements:
• [People are becoming more lazy because of this?]. Yes. It
makes no sense any more. Currently, when you have a large
family, it makes no sense to work. People don’t even look for
work at the moment.
[It discouraged them from working?]. Yes. Yes. Well, if you
get every month 5,000, sir, then well...
[But to get five thousands you need to have a large “team”,
right?]. But no, no, no! Absolutely not! There are also family
allowances. This is not synonymous. This is a help that does not ...
500+ is just one of the components, that is supposed to serve the
family.
[And you think this assistance can spoil those families?]. Yes,
it can.
[And how broad would this phenomenon be, how do you think?
When you meet these families, do you really think they get too
much of this help? Let me phrase it this way. If the family is entitled
to receive some support, then it should benefit from it, because
that is the policy of the state. And we go such a direction, that it’s
impossible to be denied.
[But would you make this help dependent on, let’s say, some
own contribution from those persons?]. Yes, for example. Yes. Or
I would not give money, in the sense of cash, only some help in
the form of subsidy to nursery or extra lessons.
• Yes, but in a large family, with many kids, it’s hard to take
that job. And does it sometimes happen that there is a cohabitant,
I mean in this large family, and he doesn’t really want to act,
because he has the 500+ now, so he sees no need to seek
work? [...]. The father. Yes, the father. So there are six children, but
somehow they could share, one could work in the afternoon [...].
I tell them: Don’t you think about the future? About retirement?
After all, children will one day grow and you gonna loose be-
nefits. [...]. Besides that we’re not sure the 500+ gonna last...”.
But here no one thinks this way “What for?”.
[An what about retirement and other things?]. Well, that’s what
I say to him, to think about the future. “You know, the money
earned does not decrease the benefit, so you would just get
more income”. “But what for?”. The 500 + is already a lot for
them. They get additional help from the social centre, they learn
that “Even though you get 500+, you’re still eligible to other allo-
wances because you’re below the income criterion, so you may
apply”. But for them this money is not really impressive. “Why
would I need that money, there’s already a lot of money”. We even
offered them lunches here. We go, ask the mothers to subscribe
lunches for children, because the social centre can pay for it.
But the mother says: “What for?” – she can pay for those lunches
herself. That’s how it looks like: we give, we offer, but they [...].
They don’t want this help. It’s a problem of excess, I guess. There
is too much of this assistance […]. That’s really weird. [Please
correct if I’m wrong, but does it show that this 500+, makes
people a bit lazy?]. Partially yes, in some environments.
[And it deprives them the motivation?]. Yes, in some cases...
It’s all very varied. But there are cases like this, I would say rare,
rare, but they exist, indeed. Because I see a lot of these families,
that buy new furniture or do something to change their quality of
life. To improve these housing conditions. They invest in something:
replacing the fridge, buying a washing machine [...]. Every family
is different. The cases of passivity caused by this money, the
lack of willingness to work, are rather rare. They are rare, but
they exist.
• [You think that this 500+ is a good idea, after all?].
Absolutely yes, but maybe there should be some other form of
distribution of funds, more targeted to children, not given in
cash, as often this money is spend on alcohol or some current
needs.
[Do these people take into account that the money was
supposed to be for children?]. In this environment, people rather
Social Policy No 1 ENG/2017
think this is just an additional source of income. I know from my
conversations with many different people that some people
give up work altogether, because if there are several children
in the family, then working is no longer economically viable.
[You think it works like that?]. It happens sometimes. I talk to
a lot of people, and some of them have left work, because they
have three children and they got 1,500, and if he used to earn
1,800, the why should he work.
[But he would have 1,500 plus 1,800]. But there is no such
thinking. He will earn some more money from side jobs,
illegally. I know it from private conversations.
[But how many of such people can there be?]. Well most of
the people from this environment, who didn’t work before the
500+ anyway, and some who used to work somewhere legally,
but now give up, because they got a regular cash flow from the
benefit, enough for the current needs, and for the rest they will
somehow figure it out, do some side jobs for example. That’s
how people think in this environment [...]. You would have to
change their mentality. Sometimes children are just a tool
to get social assistance, to get the 500+.
[Do you think they are treated like this?]. Of course.
It is clear from the above interviews that, in some families,
getting a 500+ childcare allowance discourages parents from
taking up work and even encourage them to stop working at all. In
these families, the benefit is treated as an additional source of
income, allowing to limit the effort already made to take care of the
daily well-being of the family. To put it bluntly, there are parents –
including, or perhaps mostly fathers – who think they do not have
to work because now they children earn they living. Such an
opinion has been heard by the person working for a local institution,
when she went for a visit and was surprised to see the father of
a family asleep at high noon.
However, it should be clearly stated that this is not always the
case, and that such applications cannot be extended to all families
receiving support from the social assistance system. In the opinion
of respondents, however, it cannot be denied that similar situations
occur. Moreover, it is also not excluded that what the experts want
to be the interpretation of what they heard from people is merely
a repetition of a stereotype known for over two hundred years,
according to which economic coercion is the most effective tool for
encouraging people to take up work.
SUMMARY AND CONCLUSIONS
Materials used for the reconstruction of “local knowledge”, that
is, the common thinking of people benefiting from the social assis-
tance system due to poverty and people working in local institutions,
manifest a multidimensional and multifaceted picture of “overt” and
“hidden” functions of the 500+ childcare benefit in the group of
families in difficult financial situation interested by the benefit.
Of course, the material presented above is too modest to be
generalized in any way. They allow however – even very preliminary
– to gain some insight into what how the “500+ benefit” is per-
ceived by those whose opinions generally have no greater chance
of reaching and be quoted in the public debate. Drawing attention
to the voices coming from below is important as far as the eman-
cipatory function of contemporary humanities is being realized
(Rakowski, Malewska-Szałygin 2011).
Noteworthy are several claims relating both to the benefit itself
and to the characteristics of “local knowledge”. First and foremost,
it must be clearly stated that the childcare benefit itself is received
by members of families in difficult financial situation in at least two
ways. Some people declare that their family’s financial situation
has improved, there no longer have problems with meeting their
immediate needs, and this usually involves gaining a very well
desired sense of security. On the other hand, there are also people
who are more critical about the consequences of the introduction of
this childcare benefit. In their opinion, the situation of their house-
Social Policy No 1 ENG/2017
hold did not change or deteriorate significantly, as the prices of
goods in local shops increased with the introduction of the benefit.
As a consequence, the balance is zero or even negative.
The purpose of this article is not to verify the empirical re-
levance of the collected statements. The question as to whether
these people may be right in the empirical sense of this term is as
important as the question of what they have to say in this matter.
But even if they are wrong and the prices of goods have not risen,
then we are still trying to answer another question – what prompted
respondents to give such an answer. One of the possible inter-
pretative paths suggested in the article could lead to the need to
mask one’s own helplessness and powerlessness. However, this is
clearly only one of many possible answers.
Opinions in the group of “experts” working at local institutions
regarding the consequences of introducing the 500+ benefit for the
daily lives of families benefiting from social support due to their
poverty are also not clear and rather ambiguous. Of course, it
always depends on the particular family. There are households where
– in their opinion – a lot has changed in favour after the imple-
mentation of the benefit – parents paid off outstanding debts,
renovated the apartment, bought new equipment, the parents and
children are “better” dressed. Was that the legislature’s idea?
However, there have been clear and numerous voices in the
local community, including those presented in the article, indicating
that the 500+ childcare benefit acts demotivating and discourages
from finding and / or retaining job. Some people assume that when
the money that so far had to be earned can now be received in the
form of benefit, then there is no reason to work. The vision of
summing up the amount of benefit and the current income, seen as
a chance to significantly improve the situation of the household and
invest money, for example in the development and education of
children (e.g. language classes, the development of children’s in-
terests and talents), is often not much interesting.
The respondents’ comments were aimed at changing the form
of payment of benefit to tangible assets. Yet, another thought, well
known to people with knowledge of change processes, including
social change, has appeared in the collected material. This thought
was already mentioned in the quoted interviews.
The key to the success of any change, including the change
that is supposed to result from the 500+ childcare benefit, is the
awareness of people. Briefly speaking, the success of social
change is a function of its rooting in “local knowledge” in the local
system of meanings. This process is already underway but its im-
plementation is turbulent. This is because new ideas proposed in
the framework of family policy do not fall into the vacuum, but are
already well formed, permeated by habits and ways of thinking
known to generations.
The basic conclusion that follows from the article discussed
here would be that it is not worthwhile to underestimate the wisdom
of common sense and common thought – the wisdom rooted in
“local knowledge”, irrespective of how difficult, confusing, surpri-
sing, or even irritating this “knowledge” may occur.
REFERENCES
Geertz C. (2005a), Opis gęsty: w poszukiwaniu interpretatywnej teorii
kultury [Thick description: in search of an interpretative theory of
culture], in: Interpretacja kultur: wybrane eseje [The Interpretation of
Cultures. Selected essays], Wydawnictwo Uniwersytetu Jagielloń-
skiego, Kraków.
Geertz C. (2005b), Myśl potoczna jako system kulturowy [Common thought
as a cultural system], in: Wiedza lokalna: dalsze eseje z zakresu
antropologii interpretatywnej [Local Knowledge: Further Essays in
Interpretive Anthropology], Wydawnictwo Uniwersytetu Jagiellońskiego,
Kraków.
Gromada A. (2017), Rodzina 500+ jako polityka publiczna [The 500+
family as a public policy], „Seria Analizy, Polityka Społeczna, Ekonomia”
[Analysis Series, Social Policy, Economics”], Instytut Studiów Zaawan-
sowanych [Institute for Advanced Studies], http://krytykapolityczna.pl/
file/2016/02/gromada_rodzina_500.pdf [accessed on 10.09.2017].
41
MRPiPS (2016), Raport „Rodzina 500+” [“500+ Family” report], Warsaw,
http://www.mpips.gov.pl/wsparcie-dla-rodzin-z-dziecmi/rodzina-500-
plus/dokumenty-i-opracowania/raport-rodzina-500-plus-stan-na-30-
listopada/ [accessed on 10.09.2017].
Rakowski T., Malewska-Szałygin A., red. (2011), Humanistyka i dominacja:
oddolne doświadczenia społeczne w perspektywie zewnętrznych
rozpoznań [Humanism and domination: bottom-up social experiences
in the perspective of external recognitions], Instytut Etnologii i Antro-
pologii Kulturowej Uniwersytetu Warszawskiego, [Institute of Ethnology
and Cultural Anthropology, University of Warsaw], Warsaw.
Szarfenberg R. (2017), Wpływ świadczenia wychowawczego (500+) na
ubóstwo na przykładzie mikrosymulacji [Influence of child benefit
(500+) on poverty on the example of microsimulation], „Polityka Spo-
łeczna”, No. 4.

SUMMARY
The paper is about child allowance (500+), a new family benefit introduced in Poland in 2016. In the public
sphere there is a lot of discussions connected with this new benefit, but most of them present the specialist’s
points of view. The main goal of this paper is different, it present the elements of ”local knowledge”, the local
points of view: people who benefit from the social system because of their difficult financial situation and people
who work in the local public institutions and observe the impact of the new child allowance on the poor people
everyday life. In the paper there are presented the qualitative research results. Conclusions are ambiguous and
complicated – in the respondent’s opinions we can observe both the advantages and the disadvantages of the
new child allowance (500+).
Keywords: child allowance, poverty, „local knowledge”, local points of view
Keywords

THE “FAMILY 500+” PROGRAMME:

POTENTIAL IMPACT ON DEMOGRAPHIC PROCESSES,
HE LABOUR MARKET AND THE PENSION SYSTEM
Maria Pierzchalska
European Social and Technical School in Radom, Poland

INTRODUCTION of modern and innovative social policy. It does require adjustment,

Family policy has for several years been the subject of public
debate in Poland. It has been exacerbated especially in 2016 with
the implementation of the 11th of February 2016 State Aid for Child-
Support Act1. Sources of increased interest in the subject matter
include demographic phenomena which are characterised by
unfavourable changes in the structure of the population, especially
the aging of society and decreasing fertility ratios. Social laws
contained in the Constitution of the Republic of Poland2 in the
section Economic, social and cultural freedoms and rights (prima-
rily in art. 71), including the state’s policies in relation to the family
unit, are not fully respected by the state. Their scope is limited by
many factors, including the financial capabilities of the central
budget.
The aim of this article is to present, after a year of functioning,
the initial results of the “Family 500+” programme in the context of
the positive procreation reactions anticipated by the government:
impact on demographic processes, especially an increase in the
number of births, impact on the labour market, primarily for
women, where despite a reduction of unemployment an imbalance
is still prevalent, and in the future – on the pension system and the
rate of pensions for women. These issues are in the long-term
difficult to diagnose. They are and for many years will be the sub-
ject of analyses and social discourse.
The 500+ child-care benefit has introduced a different philo-
sophy of family policy and its instruments. It may be a real change
in that policy, provided that financial resources are secured for its
continuation. In 2009 Poland has spent 0.7% GDP on families,
which is the least among EU countries. In 2015 these expenditures
have increased to 1.4% GDP (Structure… online; Ministry of Fa-
mily, Labour and Social Policy [MRPiPS] 2015).
It can be assumed that the execution of the “Family 500+”
programme has significantly increased expenditures on family
policy. The state aid for child-support program intends to change
the structure of social expenses to the benefit of family policy. It will
become solidified in Polish socio-economic reality as an expression
as the year of its functioning has shown the need for change, in
favour of beneficiaries, as well as in order to eliminate irregula-
rities.
This article incorporates results of statistical studies conducted
by the Central Statistics Office (GUS), departmental statistical data
of the Ministry of Family, Labour and Social Policy, NIK (Supreme
Audit Office), OECD and Eurostat, as well as collective information
and studies acquired from the institutions operation in the areas
of the labour market, social insurance and broadly understood
social statistics (see, among others: GUS 2008, 2014a, 2014b,
2016, 2017a; RRL 2014, 2016; Szymańczak ed. 2016)3.
It should be noted that data regarding studied thematic seg-
ments, e.g. demographics (birth and change ratios), labour market
(unemployed, the professional activity index, including women), or
the income level of households, including the economic poverty of
children, are not fully comparable due to methodological differences
adopted for individual studies.
THE DEMOGRAPHIC SITUATION OF FAMILIES
AS A CHALLENGE TO FAMILY POLICY
In the 1990’s negative demographic changes of a global nature
began occurring in Poland (in highly developed countries the be-
ginnings of this process were perceivable as far as the mid 20th
century), which were based in changes to the family model. Prog-
noses by GUS (Central Statistics Office) and Eurostat indicate that
depopulation of a country and the biological aging of society shall
take on an unprecedented scale. This is confirmed by short- and
long-term prognoses, according to which in 2035 the population in
Poland will be about 36 million, in 2050 – 34 million, while in 2060
– 33,1 million (GUS 2008, 2014a, 2015; Waligórska, Witkowski
2016: 37–53). The process of population decline has occurred in
the initial period of economic and political changes and has once
again been exacerbated in the years 2013–20154.
A harbinger of positive change can be seen in the number of
births in 2016 – 383 thousand children, which is nearly 13 thou-

42 Social Policy No 1 ENG/2017

sand more than a year prior. In the opinion of the government this
was the first sign of the “Family 500+” programme’s impact,
although such conclusions require a high degree of caution due to
the very short period of the programme being in effect.
The number of marriages in the 2–3 year perspective has
a direct influence on the fertility index and number of children
born (Balcerzak-Paradowska et al. 2014: 16–65; Firlit-Fesnak
2007: 189–191). Simultaneously, the number of divorces and
separations in 2016 was at a relatively significant level. Although
compared to Western Europe the marriage breakdown rate in
Poland is lower, the permanence of this institution is becoming
weaker. Instead, forms of quasi-family life begin to emerge, which
is pointed out in reference literature (Balcerzak-Paradowska 2003:
323–336). Demographic changes are, among others, a result of
choices made by young people who decide to take on studies and
achieve economic stabilization, postponing starting a family until or
after 30 years of age. Thus the shift in the median age of women
giving birth to their first child: in 1990 this was 26 years of age,
while 29,9 in 2016.
Apart from the traditional family understood as a nuclear re-
lationship based on marriage and biological parenthood – as one of
the forms of family – there are alternative forms of family life, such
as cohabitation and registered partnerships, as well as single pa-
renthoods (single mother or single father), foster families, recon-
structed families, family children’s homes and homosexual rela-
tionships.
Family or pro-family policy, also called the state’s policy for
children and families, is one of the special policies within social
policy. One of the most commonly accepted definitions of such
policy is the one formulated by A. Kurzynowski: the totality of legal
norms, actions and means intended by the government to create
appropriate living conditions for the family, its establishment,
proper functioning and its fulfilment of all socially important roles
(Kurzynowski 1991: 8; Kłos, Szymańczak online). This definition
shows, that family policy is primarily a system of actions supporting
families in the performance of their functions. It is distinguished
from other sectors by the specifics of its objectives which are car-
ried out to the benefit of the family. Reference literature expresses
the opinions that such policy could be a separate, autonomous
system encompassing comprehensive actions of the state to the
benefit of families.
In the opinion of St. Golinowska (2007: 8) family policy is under-
stood as public actions in the following three areas:
1) creating law regarding the forming of a family, its material re-
sources, health, protection of children and responsibilities of parents;
2) supporting families with children through financial and in
kind benefits;
3) facilitating access to goods essential to fulfilling the family’s
primary functions, i.e. housing, care services, education, upbrin-
ging and recreation for children and adolescents5.
Reference literature distinguishes two types (kinds) of family
policy. The first is addressed directly to the family, while the second
is indirect policy, undertaken in other areas of the state’s operation,
which also influence the family’s functioning, e.g. tax and housing
policy or the implementation of programs for professional activa-
tion, especially of women.
Despite the government’s awareness of the occurring demo-
graphic processes and significance of the risks, which is shown in
public debate, family policy in the last two decades – even though
declared as a priority of the state – has not been comprehensively
encompassed in one document, and its scope has not been for-
mally established. Individual instruments directly or indirectly sup-
porting families are included in the base State pro-family policy
programme, which has been adopted by the government in 1999.
It was intended to cover the years 2000-2010, however subsequent
governments have implemented new solutions6.
The report by the Ministry of Labour and Social Policy (MRPiPS
2011) and GUS publication regarding pro-family actions (2016: 23)
Social Policy No 1 ENG/2017
inform of family policy instruments directed towards specific groups
and environments. These are:
a) institutional forms of family support – aid in the care of
children up to 3 years of age, forms of care for pre-school aged
children, forms of activities for children and adolescents, family
assistants, family support centres and social work with families
experiencing difficulties, institutional aid for families with disabled
children and an adult family member, and other intangible forms of
family support and child care;
b) material aid and relief for families with children – income tax
deductions due to child upbringing, family welfare benefits, alimony
fund benefits, social security benefits for poor families with chil-
dren, school and social scholarships and other forms of pupil and
student aid, aid for families in acquiring housing and subsidising of
housing expenses, Large Family Card.
The condition for granting family benefits is not exceeding cer-
tain income thresholds: 674 PLN or 764 PLN in the case of disa-
bility (since the 1st of November 2017 respectively 754 PLN and
844 PLN). According to the Supreme Audit Office, the nominal de-
termination of an income criterion at an excessively low level
results in family benefits, contrary to the assumptions of legislators,
not being an element of family policy, but becoming in actuality an
element of social security (NIK 2015: 5).
The objectives and authorities of the state in terms of pro-family
actions are distributed among numerous instruments which are not
coordinated by any single body responsible for family policy. The
scope and role of the labour and social policy department, expan-
ded with the “family” branch, has increased in this area on the 16th
of November 20157.
Discussing the family policy welfare benefits it is necessary to
take into consideration the new benefit introduced on the 1st of April
2016 named the child-care benefit as part of the “Family 500+”
programme which, as a social transfer, is intended to support house-
holds with children regardless of their material status. This benefit
in a radical way directly influences the shape of social policy,
creating a “new” family policy.
According to initial GUS data, the effects of the program have
positively impacted the reduction in the rate of poverty (although
there are voices in the public debate, that financial resources could
have been allocated better by not paying them out to the wealthiest
families). According to demographers, however, it is still too early
to make judgements regarding the increased fertility of women,
as the increased number of births itself may be caused by the in-
crease of women in their reproductive age, i.e. an increased num-
ber of births by women aged 25–29 and 30–34 years old; the more
important statistic is the increase in births of second and, especially
third children8.
THE “FAMILY 500+” PROGRAMME
According to the provisions of the State Aid for Child-Support
Act, the “Family 500+” programme has been initiated on the 1st of
April 2016. According to the assumptions of the Ministry of Family,
Labour and Social Policy, the regulation is intended primarily to aid
families raising children and counteract the demographic decline in
Poland by providing parents with a new child-care benefit.
As a justification the department states demographic data
regarding decline in the number of births lasting over 25 years.
It does not guarantee a simple demographic renewal, as a birth
rate depression has been prevalent since 1989 (Assessment…
online). It is further added, that the progressing demographic
decline is followed by an increase in the number of people living
in economic poverty. It is stated that the Act is directed to-
wards families who need to support children and its objective is
primarily to partially cover the expenses associated with fulfilling
the subsistence needs and upbringing of children. It is assumed
that the introduced child-care benefit will allow to decrease the
existing economic limitations, especially among younger people
43
deciding to have offspring, particularly a second and subsequent It is estimated that the cost of raising one child in Poland until
child (Ibid.) reaching the age of 18 falls within the range from 176 thousand
The intervention tool of the implemented solution is the monthly, PLN to 190 thousand, and two children – from 317 thousand PLN.
tax-free child-care benefit in the net amount of 500 PLN, applicable Even though parenthood is not just a result of an economic costs
to children under up to the age of 18. It’s scope encompasses: and benefits calculation, one should understand the concerns of
a) all children who are the second and subsequent child, parents regarding the economic security of families, which may
regardless of the amount of income, negatively influence decisions on the number of children (Costs…
b) part of the children who are the “first child” – depending on 2016: 5).
the income criterion in the amount of 800 PLN or 1200 PLN in the
case of a disabled child9. IMPACT OF THE 500+ PROGRAMME
This programme, considered by the government as a priority, ON THE LABOUR MARKET
constitutes an instrument in the area of active family policy. Apart
from the assumed objectives (decreasing the financial burden of Determining the impact of the “Family 500+” programme on
families and encouraging decisions to have a larger number of the labour market is difficult due to the dynamic changes which
children), it is treated as an investment in the development of Polish take place within the labour market itself, i.e. systematic decrease
families, and therefore also in human capital. in unemployment, and also due to the relatively short functioning
time of the programme (April 2016 – July 2017), as well as the pre-
Figure 1. The number of families with children up to 18 years liminary and incomplete, continuously changing statistical data13.
of age collecting the child-care benefit, This only allows for an initial study of the labour market and the
in thousands (as of 30.06.2017) professional activity of women14. According to announcements by
GUS, full data will be available in mid 201715.
zwith
szeĞciorgiem dziecichildren
i wiĊcej
The impact of the 500+ programme on the labour market, in-
six and more 5 1
cluding professional activity, refers to both parents, but primarily to
zwith
piĊciorgiem dzieci
five children 10 3
women, as they are the ones who bear the consequences of paren-
with four children
z czworgiem dzieci 39 17 thood. The potential increase in shortages of labour supply and
withzthree children
trojgiem dzieci 173 132 deliberate resignations from work, weakening the professional acti-
vity anticipated by certain experts as a result of this programme,
with two children
z dwojgiem dzieci 610 897
are difficult to be considered accurate16, as there are many other
with dzieckiem
z jednym one child 726 factors related to this phenomenon.
0 300 600 900 1200 1500 1800 Labour market data (Table 1) indicates differences in the indi-
number
liczba of families
rodzin entitled
uprawnionych do to a benefit na
Ğwiadczenia forpierwsze
the firstdziecko
child cators between the 4th quarter of 2016 and the 1st quarter of 2017:
liczba
number rodzin pozostaáych
of other families the number of employed has decreased by 47 thousand, the num-
ber of unemployed by 32 thousand, while the number of profes-
Addendum: in June 2017 the programme was used by 2,7 million families entitled to
claim benefits for 3,97 million children: 726 thousand (28%) of them have one child, sionally inactive by 5 thousand. This does not confirm the pro-
1,5 million (58%) – two children, 378 thousand (14%) are multi-child families; gnoses anticipating a significant reduction in employment.
including 117 thousand families claiming the benefit for a disabled child. Among
approximately 6,9 million children (aged 0–18 years old) 3,1 million (as the first child)
have been excluded due to exceeding the income threshold. Table 1. Basic BAEL results for people aged 15 and above
Source: www.mrpips.gov.pl/aktualnosci-wszystkie/rodzina-500-plus-art,9008.ponad- +/-
29mld-zl-trafilo [accessed on 24.07.2017]. Specification Q4 2016 Q1 2017
(2017:2016)
Number of employed in thousands 6328 16 281 - 47 thou.
Based on the prognosis, GUS anticipates that within 10 years
Number of unemployed in thousands 958 926 - 32 thou.
there will be an increase in the number of births by 278 thousand.
Number of people professionally
In 2016 there were 382 recorded live births; approximately 13 thou- passive in thousands 3410 13 405 - 5 thou.
sand more children were born than during 2015 when a decrease
Professional activity index in % 56.3 56.2 - 0.1
in the birth rate per annum was recorded (GUS 2017: 13)10.
Employment index in % 53.2 53.2 0.0
For many years family has been one of the greatest values in
the life of Poles. This is why directing the 500+ child-care benefit Unemployment rate in % 5.5 5.4 0.1
towards families is one of the instruments, by which the government Addendum: The professionally active population in Q1 2017 counted 17 208
wants to support it in difficult situations. This is in line with the assum- thousand, including women in general 7731 thousand; employed 7317 thousand,
unemployed 414 thousand, professionally inactive 8253 thousand according to data
ptions of the family policy: the state should respect the family’s by rynekpracy.org, the number of professionally inactive has decreased by 9 thousand
autonomy and serve its empowerment (Rymsza 2016: 56–58). people. A reduction in the number of working individuals by 47 thousand occurred
primarily in the population of men. The employment index for people in their repro-
It could be concluded that this programme intends to meet the ductive age was 71.3%, including 75.0% for men and 67.1% for women.
expectations of society which along with the progressing economic Source: own study based on data by GUS 2017e.
development expected improved quality of life. The first positive
signal after the first 9 months of the programme’s operation in 2016 This data relates to 2016 (usually to the first quarter, prior to the
is the visible decrease in the scope of poverty among multi-children implementation of the 500+ benefit) and two quarters at the turn of
families, households with disabled individuals, as well as inha- 2016/201717. An analysis of the programme’s impact on the labour
bitants of rural areas and cities below 20 thousand citizens11. This market during the period of several quarters with incomplete and
is confirmed by a simulation by R. Szarfenberg: the “Family 500+” incomparable statistical data cannot be a rationale for determining
programme has decreased extreme poverty among children by as its negative impact or lack thereof. Relative measures have been
much as 94%, the number of impoverished among the youngest taken into consideration, which enable to initially assess the situa-
will decrease by 500 thousand and extreme poverty in general by tion in three areas: professional activity, employment and unem-
48% (Kłos, Szymańczak online)12. ployment. Particular attention has been drawn to the shaping of the
According to demographers, the current demographic trend may labour market situation depending on gender, which is one of the
be caused by the increased number of women in their reproductive primary characteristics used in labour market analysis18.
age (15–49 years old). They believe that its analysis should be The level of professional activity among women is lower than
conducted over a long term (statements by J. Witkowski and that of men (women have for several years constituted appro-
I.E. Kotowska; How… 2012). ximately 45% of the professionally active), however, a trend of their

44 Social Policy No 1 ENG/2017

professional activity increasing is clearly visible. Most likely this is women and cultural changes (emancipation), including personal
caused by the necessity to supplement the household’s income, aspirations.
which relates to the portion of families who struggle with material The unemployment rate – the lowest since nearly a quarter of
difficulties. a century (and one of the lowest in the EU) – also applies to
By supporting families financially, the programme has “boos- women. In a comparable period it has decreased by 1.6% reaching
ted” the finances of households, which in certain cases resulted in 5.4% in Q1 of 2017 for both genders. At the end of 2016 a decrease
lowering the desire to pursue work after giving birth to a child. This of women registered as unemployed has been recorded as com-
situation may apply especially to women who have so far worked pared to 2015; the highest decrease was seen among women aged
at less attractive positions, who feel “exploited” due to unfavoura- 18–24 (by nearly 26.7%, i.e. by 26,7 thousand) and aged 25–34
ble working conditions and low wages. This argument is given as (by 10.1%, i.e. by 26,3 thousand).
a justification of the professional deactivation of women (which has 926 thousand unemployed were recorded in the 1st quarter of
not been confirmed by statistics), who prefer to stay home raising 2017. This number has decreased in relation to the comparable
children, and supplement their income by family welfare benefits, period of the previous year by 277 thousand, and compared to the
the husband’s earnings and other sources. Such a phenomenon 4th quarter of 2016 – by 32 thousand. The decrease in the number
without a doubt exists, yet requires research as to its extent and of unemployed applied to women to a larger degree, which may be
methods of aiding such parts of the population. evidence of them undertaking work or their exclusion from the
Among the six labour market indicators for women (Table 2) it unemployed register as a result of voluntary resignation (95,5 thou-
is difficult to point to a single phenomenon which could be con- sand women and 65,8 thousand men), or due to gaining entitle-
sidered a direct result of the child-care benefit. The labour market ments to pension or taking on studies (nearly 55 thousand).
sector is subject to many factors which in equal measure impact The number of professionally passive individuals due to family
the rise of activation, as well as inactivity. Nonetheless, the pro- responsibilities and domestic care in the 1st quarter of 2017 was
fessional activity index for women (employed and unemployed) 1792 thousand and was higher by 90 thousand compared to the 1st
which expresses the share of professionally active women aged 15 quarter of 2016 and lower by 38 thousand compared to the 4th
and above in the population shows a minor increase in the value of quarter of 2016. The highest number of professionally inactive indivi-
this indicator (by 0.1% in Q1 of 2017). While the labour market has duals were people reaching retirement age (nearly 6800 thousand)
seen a partial withdrawal of women between the ages of 25 and 44 and people expanding their qualifications and undertaking studies
(approximately 147 thousand), this tendency has lasted for several at the age of … (2390 thousand people) (GUS 2017c).
years since the introduction of beneficial changes to family policy
in the years 2010–2015. The age range may indicate that these are Figure 2. Number of professionally inactive individuals
mothers raising small and older children, or also partially individuals in the years 2015–2017 (by quarters), in thousands
taking care of older or disabled family members19. In diagram 1 the
9000
distribution of professional activity by age differs depending on 8341 8283 8291 8253
8000
gender. In the case of women the highest percentage of those
7000
professionally active occurs in the age range of 40–49, which can
6000 5291 5212
be interpreted as a return of women to work after having raised small 5119 5152
5000
children. 4000
3000
Table 2. Labour market indicators for women 2000
Q1 Q4 Q1 1000
Difference
Specification 2016 2016 2017 0
(1) (2) (3) (3-1) (3-2) Q1IQ1
kw.2015
2015
2015 I Q1
kw.2016
2016 IVQ4
kw.2016
2016 I Q1
kw.2017
Q1
2017 2016
Women’s professional activity liczba biernych
Number zawodowoinactive
of professionally mĊĪczyzn
men
index (in %) 48.3 48. 3 48.4 0.1 0.1 liczba biernych
Number zawodowoinactive
of professionally kobiet women
Women’s employment rate (in %) 44.9 45.5 45.8 0.9 0.3
Source: own study based on BAEL GUS.
Women’s unemployment rate
(in %) 7.0 5.7 5.4 -1.6 - 0.3
Certain of the labour market indicators presented above (it should
Number of working women
(in thousands) 7 202 7 293 7 317 115 24
be noted that data from GUS and other analytical and research cen-
tres have been supplemented, which occasionally invalidates prior
Number of women professionally
inactive (in thousands) 8 283 8 291 8 253 -30 -38 determinations) to a larger extent applicable to women, constitute
an initial discernment of the impact of the “Family 500+” pro-
Professionally passive due to
family responsibilities gramme. The three analyzed indicators: professional activity, em-
(in thousands) 1 702 1 830 1 792 90 - 38 ployment and unemployment, the following elements should be
considered most significant:
Addendum: According to GUS data from August this year among 1,79 million people
professionally inactive due to family responsibilities, the number of women was 1,57, 1. The professional activity ratio overall is 56.2%. During 2016
i.e. approximately 30 thousand fewer than in the 4th quarter of 2016. The number of it is possible to notice fluctuations of the professional activity index
non-working individuals (unemployed and professionally inactive) per 1000 working
people was: 918 people in the 1st quarter of 2016, 880 non-working people in the 4th
for the subpopulation of women from 48.3% in the 4th quarter of
quarter of 2016, and 880 in the 1st quarter of 2017. 2016 to 48.4% in the 1st quarter 2017. The cause could be the
Source: own study based on data by GUS 2017d. 500+ programme, providing a lack of effective support of women
in reconciling their maternal functions with professional work. It is
The women’s employment rate has increased in the 1st quarter necessary to create regulations which favour women’s aspirations.
of 2017 in relation to the 1st quarter of 2016 to 45.8% (by 0.3%), Applicable provisions are contained in the European employment
although theoretically the professional activity of women, according strategy (Golinowska 2012).
to first reports by analysts, should decrease due to the expected 2. Employment is not decreasing. The concerns regarding “pu-
negative impact of 500+ (the age of women is an interesting shing out” women from the labour market as a consequence of
element requiring further analysis). The number of employed wo- 500+ benefits have not been confirmed. The primary employment
men has increased per annum (Q1 2016 to Q1 2017) by 115 thou- rate for the labour market applicable to people aged 15 and abo-
sand, which can be explained by the dominant higher education of ve in general during the analysed period has remained unchanged

Social Policy No 1 ENG/2017 45

(53.2%); for men it has decreased by 0.3%, and has increased for
women by 0,3%.
3. The unemployment rate index – a significant parameter
which determines the position of employees in the labour market
– has achieved the lowest value (5.4%) in the recent quarter
century. A decrease in the intensity of unemployment has occurred
in the population of women, which translates to a decrease in the
number of unemployed women. Approximately 40% of professio-
nally inactive people are individuals in their reproductive age, and
the most frequent cause of inactivity in this group, apart from
retirement, are study and family responsibilities20.
The author of the subtitle Work means a secure family con-
tained in the report Costs of raising children in Poland 2016 notes
that in Polish reality the family provides for itself through work, and
its availability is one of the primary factors which ensures lasting
prosperity for society (Costs… 2016: 7).
Women may resign from work after receiving a benefit in the
amount of 500 PLN for the child, especially if they have been per-
forming jobs which did not provide satisfaction and due to a lack of
opportunities for reconciling professional work with raising their
children21.
To summarise, the program which in its assumption is an
investment in human capital has a diverse impact on individual
spheres of life. By in general boosting the family by reducing the
costs of upbringing, it has created opportunities of effectively
reducing the scale of poverty, especially among children, and pre-
venting social exclusion (Balcerzak-Paradowska, Golinowska ed. et
al. 2009).
Initial demographic changes are also observable, evaluated by
the government as a clear increase in the number of births22.
Provided that in the future the share of women in the labour market
does not decrease (the effectiveness level may be achieved at
different expenses), this direction may be considered socially bene-
ficial (after its adjustment) due, at least, to the reason of decreasing
child poverty rates, and thereby improving the living situation of
families with children, even though the income criterion for the first
child excludes approximately 3,1 million children from collecting
the benefit.
IMPACT OF THE “FAMILY 500+” PROGRAMME
ON THE PENSION SYSTEM AND PENSIONS
An interesting question is the impact of the “Family 500+”
programme on the pension system and pensions, in particular the
subsistence of women (to a lesser extent men) and their families,
which as a result of professional inactivity may receive a minimum
pension or be deprived of it overall. From an economic perspective,
the actual level of retirement benefits is decided by the amount of
income achieved during the period of professional activity. In the
case of long-term professional inactivity the negative consequences
apply to individual people (e.g. payment of unemployment benefits,
low pension), but also influence a decrease in production and re-
duction of insurance contributions (taxes). The result is the emer-
gence of a group which, requiring social support, shall become
a social security client.
Demographic prognoses indicate a decreasing population of
people in their productive age and a rapidly increasing group of
people in their post-productive age as a result of population aging.
A concern arises for the growing pension fund deficit, which may
upset economic growth, thereby significantly limiting public spen-
ding, as the correlations between national income and social
security are bilateral in nature (Barr 2010: 130–198).
The primary aim of the pension system is to secure income for
citizens after reaching the retirement age, which is expressed in art.
67 of the Polish Constitution of 1997. It should be remembered,
that the right to social security is a value expressed in EU and
international law, including art. 34 of the European Union Charter of
Fundamental Rights, which recognises the right to social security
46
benefits for all employees and individuals who are their dependants,
including in the event of illness, dependency or old age23.
The need for a pension system, disregarding the genesis of the
idea of security derived from the cross-generational contract,
arises from the lack of earning ability after reaching the retirement
age (social risk) and gaining the right to a pension. Usually it is the
primary source of income, and in our reality often the only one,
which allows subsistence in a post-productive age. Participation in
the system is mandatory. It guarantees the acquisition of insurance
coverage in the event of a specified risk, on the condition of paying
contributions throughout the period of employment. This results in
the creation of financial resources (capital), which is used to pay
out current pension benefits to people who have reached their
retirement age. Pension, according to the reformed rules, constitu-
tes a result of dividing the basis of its calculation by the average
further life expectancy for the age, at which a given person retires.
The pension insurance contribution in the amount of 19.52% of the
basis of social security contributions is a constituent of remunera-
tion, is compulsory in nature and is non-refundable, but is the basis
for determining the pension amount which is paid out until the end
of a pensioner’s life.
In this simplified structure one should pay attention to the exis-
tence of phases in a person’s life, in which a particular role is
played by the period of professional activity. During that period
work, as a source of income, apart from other benefits enables the
performance of the insurance obligation, i.e. deduction of part of
a person’s remuneration in a specified amount in the form of con-
tributions. Another phase is the period of reaching the retirement
age which entitles to a pension. In the current system the amount
of remuneration and life expectancy in years decide the pension
amounts. From this perspective, the most beneficial periods are
associated with earnings from the average period of full professional
activity, when they are usually at their highest level.
It can be supposed that, from the perspective of a parent
(usually the mother) entitled to collect the 500+ benefit, who
perceives barriers in reconciling the roles of parent and employee,
life “in retirement” is a distant future. It should be concluded, that
there is a lack of knowledge in society regarding the effects of
professional inactivity in the context of future pension benefits, and
thereby subsistence in a person’s old age. There is a common be-
lief that it is the state’s obligation to ensure the citizen’s subsistence.
This opinion is still prevalent, despite an information process
conducted by the Social Insurance Institution for several years.
For the last several years in the ever changing socio-political
and economic reality parents to a greater or lesser extent have had
to reconcile the performance of parenting roles and professional
work, remaining gainfully employed. It seems that the gradual eli-
mination by the state of barriers in raising small children in par-
ticular and the current changes in the labour market should result in
the belief, that work is becoming a central element of the contem-
porary person’s life, significantly impacting their position in the
social structure (Haponiuk 2014: 6). From the perspective of the
labour market and family policy, it should be assumed that income
from work is tantamount to family security.
Due to incomplete statistical data and a its high variability, it is
difficult to prove how many parents, women in particular, have
resigned from work (and for how long a period) for family related
reasons (although it should be assumed that men in this group
constitute only a few percent). Among nearly 2,8 million families
who collect the 500+ benefit it can be estimated that in the 1st quar-
ter of 2017 approximately 100 thousand women were professionally
inactive due to their family responsibilities, which is 38 thousand
fewer than in the last quarter of 2016.
Data in this regard is fluid due to the varying periods for which
entitlement to such benefit applies (there is an increase in the
number of new-born children, but also a decrease due to passing
the age of 18), or changes in the income criterion. There is also
a lack of data whether women have resigned from work prior to or
Social Policy No 1 ENG/2017
after the introduction of the benefit. Professional inactivity may last
a year, but can also last many years, which is determined by the
number of children and their age (phases of family life), the wo-
man’s age, the family’s material situation, employment conditions
and social infrastructure (Kurzynowski ed. 2001). It should be assu-
med that among women professionally inactive due to family respon-
sibilities, at least over a dozen percent have taken care of the eldest
family members. This phenomenon shall grow along with the pro-
cess of so called double aging of society and lack of institutional care.
In the current system with a defined benefit, the amount of paid
out benefit is associated with remuneration and combined tenure.
The longer the tenure, the greater the accumulated capital which,
upon retiring from work, will be the basis for calculation a pension
according to the rule which was the leading slogan when implemen-
ting the retirement reform in 1999: what you save in contributions
on your account is what you get back as pension.
A relevant factor will be the length of the period outside the
labour market. In order to collect a pension at least in the minimum
amount, it is necessary to have an accumulated employment time
of at least 20 years for women (since the 1st of October 2017) and
25 years for men. Assuming that in several years the common
retirement age will not function in our pension system and only
the capital accumulated from contributions will be applicable, the
amount of remuneration received throughout over 40 years in order
to gather the appropriate amount becomes all the more important.
There are concerns that a lower accumulated amount which does
not entitle to a pension may be “allocated” by the state, which fa-
ced with such a solution must offer an alternative form of social
security.
The professional inactivity of women is a challenge for the
pension system. Women are a huge burden for it, as they retire
earlier and, due to living several years longer than men, collect pen-
sions longer. While raising children women do not pay contribu-
tions, which is a loss for the Social Insurance Fund.
In Poland cross-generational solidary has been upset. The pro-
visions of the pension reform have placed emphasis on the in-
dividual prudence regarding one’s retirement security, which over
several years has not proven itself. What remains is a system which
guarantees pensions, but their level will continue to decrease.
Individual prudence means making decisions regarding volun-
tary savings, which does not necessarily have to be effective. This
is evidenced by the attitudes of Poles towards saving – as they in
fact declare that it is “worth saving”, but only 9% of respondents
save funds to “secure their future when retired”. Most do not do so
regularly or do not save at all. This is a result of budgetary limita-
tions or insufficient abilities in the area of savings (The attitudes…
2011). In Poland every fourth working citizen admits to not taking
any actions towards saving for their retirement, as they intend,
during their retirement, to use the resources which will be paid out
by the Social Insurance Institution.
This preliminary analysis has highlighted certain problems
which may occur in the pension system for women (and men) col-
lecting the child-care benefit and professionally inactive while
raising their children.
SUMMARY
Summarising the analysis results, it is possible to formulate the
following conclusions:
• The demographic impact of implementing the child-care be-
nefit can be evaluated after several years of the programme’s
functioning. This is due to the difficulty of considering its first result
to be 13 thousand more childbirths in 2016 compared than a year
prior, as 500+ is only one of many factors impacting the procrea-
tion attitudes. It is necessary to conduct an analysis of second and
subsequent childbirths, comparing their increase to previous years
(evaluation, according to the department’s announcement, will take
place after 3 years of the programme’s functioning). One cannot
Social Policy No 1 ENG/2017
discount the phenomenon of “getting accustomed” to the benefit,
which will result in a slowdown of its impact on the number of
births24.
• Extreme child poverty has decreased by 94%. Thus, living
conditions are improving. An important psychological aspect of
the programme is strengthening familial and social bonds and
restoring the sense of dignity to parents and children. It can be
assumed that the child-care benefit prevents social exclusion of the
young generation.
• From the perspective of the child-care benefit’s impact on
the labour market, there is no perceivable impact on the professio-
nal activity of men and, especially, women, as in both groups
an increase of that rate is visible. This translates to an increase in
the number of people who are professionally active or looking for
work. One can clearly see a trend of increased professional activity
among women.
Proposals for introducing new systemic solutions
1. Introduction of a third tax threshold, which would exclude
families with the highest income from the ability to use the “Family
500+” programme. In exchange, it is advisable to make another
adjustment of the programme by diversifying the benefit amount
depending on the child’s age: a lower benefit for children up to the
age of 13 and a higher one for children aged 14 and above, which
is justified by the increased related expenses.
2. Entitlement to the 500+ benefit for the first child in con-
nection with professional activity.
3. Intensification of actions to eliminate institutional barriers in
order to facilitate the reconciliation of professional work and family
life through changes to the Labour Codee and arrangements with
employees (flexible employment: flexible work time and pay, nume-
rical and functional flexibility). Transition to an individual scope and
distribution of work time.
4. Introduction of a special fee (tax) for the childless, who
achieve income higher than the average household income.
5. Introduction of a legislative provision regarding payment of
insurance contributions for women raising three and more children,
as an element of realising the doctrine of “supporting those who
have children”, applicable in most EU countries25.
6. Implementation of a marital pension which the husband would
share with his wife for the period of her work when raising children
and maintaining the home.
7. Undertaking long-term policy actions towards changing the
pension system for people beginning professional work by introce-
ducing a citizen pension benefits. This would involve commen-
ment off a long period of preparations for changing the pension
system together with preparation of mandatory savings program-
mes to supplement income from the pension benefit. Such a so-
lution is necessary in the face of:
– a growing deficit of the Social Insurance Fund and instability
of the pension system, which will guarantee pensions at the level of
30% of remuneration,
– the increasing phenomenon of population aging due to a de-
crease in the number of people in their productive age (lowering of
the retirement age since the 1st of October 2017) and decreasing
population growth.
Observations arising from the presented data
and public debate
Currently there is no sufficiently complete data in order to re-
liably evaluate the “Family 500+” programme. Statistical studies
are scattered, while presented analyses are fragmented. There is
a lack of a consolidated document which specifies the state’s fa-
mily policy which takes this programme into consideration.
A full analysis would require empirical studies over a longer
term in regards to the living conditions of family households and
47
professional activation of women amid the overall actions of the
state in the area of social, and family, policy. It is also necessary to
systematically monitor the effects of the programme in terms of
demographic changes (procreation decisions) and values of family
policy expenditures.
The “Family 500+” programme was anticipated by society. In
this regard it can be considered a pro-social action, similarly to
lowering the retirement age. However, its implementation in con-
ditions of a low birth rate and decreasing population may in the
future make constructing a budget more difficult. Also, its negative
impact on the professional activity of women (provided this pheno-
menon is confirmed) is difficult to be considered as a positive
element of the economy.
The approach of women towards professional activity is largely
dependent on the significance of income from work (apart from
infrastructure related to child care) as the primary basis of a fa-
mily’s subsistence. This is why, apart from systematically increa-
sing the minimum wage, as a reference point to the remuneration
system, it is necessary to adhere to the long-term financial stability
of the family, as this rule plays an important role in planning its
development.
There is a need for a new cross-generational contract for the
purpose of investing in the young generation. This means the pur-
suit of ensuring balance in the social security system between
expenses on support of the young generation and the pension sys-
tem. This will be a difficult task due to the progressing population
aging process (especially in light of so called double aging), which
will result in emphasis on expenses related to care over such
people, if in the future institutional care will more frequently be re-
placed by informal care (Zielona… 2010: 9).
1
Journal of laws 2016, pos. 195.
2
Constitution of the Republic of Poland dated 2nd of April 1997 (Journal of
Laws 1997, no. 78, pos. 483).
3
See also: numerous announcements of BAEL, CBOS studies, Social
Diagnoses from subsequent years and academic studies devoted to the
processes of family creation, development and breakdown, as well as
the social roles of women and men in family and professional life.
4
It was possible to reverse this phenomenon in Q1 of 2014. At the time
91,5 thousand children were born in Poland, which is 1,2 thousand more
than in Q1 of 2013 and applied primarily to large cities. See GUS 2014c.
5
That author believes, that the traditional family model today is obsolete
in a statistical sense (Golinowska 2012: 22).
6
In the years 1999–2013 several programs have been created for the
benefit of families: the set of reforms from 2004, thoroughly amending
the system of family benefits; the document Population Policy of Poland
passed by the government in 2006; the document Family policy project
from 2007; the President B. Komorowski family policy programme titled
“Dobry klimat dla rodziny” [“Good climate for the family”] of 2013 (pre-
pared by the team lead by minister for social affairs I. Wóycicka), which
formed the foundations of the so called Family Act of 2015; reforms of
the Labour Code, as well as the so called “nurseries” act of 2011 (amen-
ded in 2013) regarding organization of child care for children up to the
age of 3.
7
The “family” of MRPiPS covers the issues regarding: demographic con-
ditions, care over children up to the age of 3, protection and support of
families with children, especially those in difficult material and social
situations, development of alternative care, coordination and organization
of cooperation.
8
According to I.E. Kotowska, monitoring of procreation behaviours only
on the basis of GUS data is insufficient due to many new solutions
introduced in the years 2013-2016 for the purposes of family policy, and
which have created a different climate around the family. These are: pa-
rental leave and its increased flexibility, parental benefits, the Large Fa-
mily Card, the “zloty for a zloty” mechanism, changes in tax deductions
for children, verification of the income criterion and a family policy
programme developed in 2013 at the Chancellery of the President of
Poland under the supervision of I. Wójcicka. See: interview in OKO.press,
https://oko.press/luty-bez-baby-boomu-zachwiala-sie-propagana-
sukcesu-demograficznego [accessed on 24.07.2017].
48
9
On the 1st of August 2017 a bill has been implemented introducing
changes to the “Family 500+” programme, eliminating undesirable pheno-
mena, such as adjusting the income to the income criterion which
entitles to the child-care benefit for the first child (so called lost revenue
at the same employer), declaring a status contrary to the factual child
upbringing, as well as claiming of benefits by individuals not residing
within the country.
10
In the opinion of prof. P. Szukalski the increased birth rate may be related
to an improved labour market situation and the fact that individuals born
during the demographic boom of the turn of the 1970’s and 80’s decide
to have children. Source: http://www.portalsamorzadowy.pl/polityka-i-
spoleczenstwo/liczba-u [accessed on 16.06.2017].
11
According to GUS a minor (below 1 percentage point) decrease in the
value of the extreme and relative poverty index has been recorded in
2015. In 2016 a decrease in the degree of extreme poverty among chil-
dren aged 0–17 slightly below 6% has been recorded (from 9% in 2015).
See GUS 2017d.
12
According to the report’s authors, the child-care benefit also decreases
social inequalities. The Gini index should fall from the level of 0,364 to
0,318. Source: http://www.money.pl/gospodarka/wiadomości/artykul/500-
biedni-po [accessed on 18.02.2017].
13
Depending on the source of information, these are: GUS data based on
a representative BAEL study, MRPiPS data regarding the unemployed
originating from labour offices, and reporting of terminations for reasons
applicable to the workplace, as well as partial studies by socio-economic
analysis centres.
14
Quarterly survey studies conducted by GUS.
15
R. Szarfenberg concludes (according to data from the years 2015–2016),
that there will be a minor increase of people professionally passive due
to family reasons (8%). See Szarfenberg 2016.
16
According to the CenEA Centre for Economic Analysis, 25 thousand
single parents and 200 thousand married parents may resign, www.
praca.pl/poradniki/rynek-pracy/500-wplynie-na-rynek-pracy_1635.html
[dostęp 10.09.2017]. According to a study conducted in July 2016 by
Millward Brown at the commission of Work Service SA. 240 thousand
employees (i.e. 1,5,% of all employees) who achieve earnings between
2000 and 3000 PLN consider resigning from work; www.workservice.
com/pl/centrum-prasowe/Informacje-prasowe/Ekspert-HR-komentuje/
Program-500-nie-zrewolucjonuje-polskieg-rynku-pracy [accessed on
10.09.2017].
17
The reduction by GUS of the population number by approximately 250
thousand in Q1 of 2016 impacts the levels of variables, e.g. the number
of professionally active or working people, to a lesser extent relating their
dynamic and relations between the variables (the professional activity
index, unemployment rate). Detailed analyses are required, whether, e.g.
the declining population reduces the beneficial impact of the rising pro-
fessional activity index. See NBP 2017: 22).
18
A. Titkow presents life roles preferred by women in a publication from
2007.
19
The phenomenon of partial withdrawal of women from the labour market
is dependent on – among other factors – the phases of family life, which
determine their needs, from the birth of a first child up to leaving the
family by the last child. See Kurzynowski 2011: 163–178; Zasępa 2002.
20
M. Chądzyński in the article I am a working woman (2017) writes, that
there is a decrease in the number of mothers who prefer to take care of
their families rather than look for a full time job. He states that the
number of women professionally passive due to family reasons has de-
creased in the 1st quarter of 2017, but this applies to women who do not
yet have children or who have already raised them (aged 15–24 and
45–54). In the 1st quarter of 2017 there has been a decrease in the
number of youngest women not searching for work due to home
responsibilities by 18 thousand, while in the 45–54 age group 0 by
20 thousand. All the while, among women aged 25–44 (with theoretically
the most offspring), the group of women professionally inactive due to
family reasons has only decreased by 2 thousand.
21
The strain between the roles of a woman fulfilling family responsibilities
and a professionally active one are presented by M. Gagacka (2011:
24–40).
22
According to demographer prof. Irena Kotowska, the current effect of the
“Family 500+” programme is a short-term one and will ultimately
influence the so called birth calendar, i.e. those who have been planning
offspring may now decide to have a child. Based on studies in Po-
land and abroad prof. Kotowska believes that long-term effects are
brought by stable support of families, but through a complete set of
solutions which support the work of parents, especially women. Source:
Social Policy No 1 ENG/2017
 www.gazetaprawna.pl/ar tykuly/959775,prof-kotowska-o-programie
500+ [accessed on 13.07.2016].
23
Recognition of the right to social security benefits is contained in many
other international legal acts, starting with the Universal Declaration of
Human Rights. See Sanetra 2014: 30–31; Uścińska 1996.
24
According to I.E. Kotowska the effects of the 500+ programme, if they
occur, will be short-lived. See www.gazetaprawna.pl/artykuly/959775,prof.-
o-programie500plus [accessed on 13.07.2016].
25
M. Chadzyński i J. Kapiszewski in the article Cieszmy się tym co mamy
(2017: 6–10) state that it is possible to reverse the course of reasoning
and introduce a childless tax (so called bachelor tax which exists in
many countries, including the former People’s Republic of Poland) for
people above the age of 25 who earn above the average income in
a household, or a variant proposed in Germany: increase the income tax
by 1 percentage point. The justification of such action would be the fact
that childless individuals are able to invest in themselves and achieve
significant profits. An additional tax could be their contribution to the
state healthcare and care systems at the time of reaching an elderly
age.
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SUMMARY
The “500+ Family” programme, which runs from mid-2016, is the opening of a new chapter in Polish family
policy. It is the response of the government to the demographic crisis caused by the mass emigration of young
people and the low birth rate, which is due to the rapidly increasing number of people in retirement age, resulting
in aging society. The main objective of the program is to create conditions conducive to having and raising
children, resulting in a reversal of the unfavourable demographic trend to increase the fertility rate. The program
is also an investment in human capital and reduction of poverty among families with children. The assumed
population growth and the transformation of the family model depends on changes in the workplace, which are
primarily the responsibility of women. The barriers to participation of women in the labour market, such as the lack
of flexibility in working time, inequality in earnings, the inability to reconcile work and family responsibilities, and
the fear of professional inactivity. This deprives them of both the independence as well as the ability to self-
fulfilment or loss of previous competences. The consequence of this will be the loss of the right to a fair old-age
pension as a result of the non-payment of insurance premiums for future retirement. The introduction of the 500
Plus program causes of necessity of changes in the economic and social policies of the state.
Keywords: “500+ family” programme, family, family policy, female labour market, seniority, pensions for women
Keywords

NOTES

50 Social Policy No 1 ENG/2017

 NOTES

Social Policy No 1 ENG/2017 51

 NOTES

52 Social Policy No 1 ENG/2017

 About the Authors
Elżbieta Bojanowska – doctor of sociology, social politician, assistant professor at the Institute of Sociology of
the Cardinal Stefan Wyszyński University in Warsaw; Undersecretary of State at the Ministry of Family, Labour and
Social Policy. Main areas of research: population ageing and its socioeconomic consequences, intergenerational
CONTENTS relations and problems related to poverty and social exclusion.

FROM THE EDITORS – Elżbieta Bojanowska, Kazimierz W. Frieske ....................
Michał Brzeziński – is an Adjunct Professor at the Faculty of Economic Sciences University of Warsaw where he
teaches history of economics and political economics. His research interests include modelling income and wealth
distribution, measurement of poverty and inequality, happiness economics and economic policy in Poland. His
publications are found in journals such as Economic Systems, Empirical Economics, Journal of Applied Econometrics,
1
Physica A, Applied Economics, Economics Letters, Scientometrics, and Social Indicators Research.

IS THE 500+ CHILD BENEFIT PROGRAMME OVERGENEROUS? POLISH SOCIAL Stanisława Golinowska – Professor at the Jagiellonian University Medical College, Cracow, and at the Institute
for Labour and Social Studies, Warsaw. She has led and participated in many scientific Polish and European projects
PROTECTION EXPENDITURE ON BENEFITS AND SERVICES FOR FAMILIES about social policy and public health, particularly on poverty, ageing, disability and long-term care, especially oriented
WITH CHILDREN COMPARED WITH OTHER MEMBER COUNTRIES OF THE on Central and Eastern European issues.

EU AND OECD – Krzysztof Hagemejer .................................................................
COMBATING POVERTY THROUGH FAMILY CASH BENEFITS. ON THE
FIRST RESULTS OF THE PROGRAMME “FAMILY 500+” IN POLAND –
Stanisława Golinowska, Agnieszka Sowa-Kofta ...................................................
HE 500+ CHILD BENEFIT SCHEME AND SOCIAL WELFARE IN POLAND –
Elżbieta Bojanowska .............................................................................................
THE IMPACT OF “FAMILY 500+” PROGRAMME ON HOUSEHOLD INCOMES,
POVERTY AND INEQUALITY – Michał Brzeziński, Mateusz Najsztub .................
1 Krzysztof Hagemejer – PhD, professor at Bonn-Rhein-Sieg University of Applied Sciences, Germany. Lecturer
at Collegium Civitas, Warsaw and Maastricht Graduate School of Governance. Economist, specializing in economics
and financing of social policies. Between 1993 and 2014 at Social Protection Department of the International Labour
Organisation in Geneva, 2013–2014 Chief of Social Protection Policy, Standards and Governance Branch. Key
member of the team working on new international labour standard, Recommendation no 202 concerning National
Floors of Social Protection, adopted by the International Labour Conference in 2012. Before joining the ILO, assistant
7 professor at the Department of Economics of Warsaw University and adviser to the Polish Minister of Labour and
Social Policy.
Elżbieta Kryńska – Professor Krynska works at the University of Lodz, where she is a Director of Department
13 of Economic Policy, and in the Institute of Labour and Social Studies, where she is a Head of Department of
Employment and Labour Market. Her professional interests are focused on contemporary labour markets issues.
She is a well-known expert in the area of socio-economic policy, in particular within labour market issues. She has
participated in many seminars and conferences, presenting results of research studies. She is an author of about
16 300 research papers and books. Professor Krynska has been a project manager in many national and international
research projects.

EFFECT OF CHILD CARE BENEFIT (500+) ON POVERTY BASED ON
MICROSIMULATION – Ryszard Szarfenberg ........................................................
INFLUENCE OF THE 500+ PROGRAMME ON THE POLISH LABOUR MARKET.
WHAT IS, WHAT WILL BE WHAT TO EXPECT… – Elżbieta Kryńska ...................
Mateusz Najsztub – has been working as an analyst in Centre for Economic Analysis, CenEA in Szczecin since
2013. He obtained his Master’s Degree in Chemistry from the Adam Mickiewicz University in Poznań in 2011. In his
25 work at CenEA he focuses mainly on the SIMPL and EUROMOD microsimulation models that provide the opportunity
to analyse direct effects of tax and benefit policy reforms on household disposable income. Apart from keeping the
model up to date he also is involved in technical maintenance including data correction and weight adjustments.
He also works with results of the SHARE 50+ survey, where he focuses on analysing social exclusion among 50+
31 population.

Kinga Pawłowska – is a sociologist and anthropologist. Since 2008 she has worked as an Assistant Lecturer, and
CHILD CARE BENEFIT 500+ AS COMPONENT OF LOCAL KNOWLEDGE: since 2015 as an Associate Professor at the Faculty of Administration and Social Sciences at the Warsaw University
ATTEMPT TO GET INSIGHT – Kinga Pawłowska ................................................. 37 of Technology. Her scholarly interests are diverse, yet they concentrate mainly around the issues of social policy,
inheriting of poverty, sociology and anthropology of organization, power in organization and critical management
studies. She is an author of a few articles, and co-author of monographic works and handbooks. She has participated
THE “FAMILY 500+” PROGRAMME: POTENTIAL IMPACT ON DEMOGRAPHIC in the projects on social economy and the processes of inheriting poverty. Now, she carry out the project on power
in organization.
PROCESSES, HE LABOUR MARKET AND THE PENSION SYSTEM – Maria
Pierzchalska .......................................................................................................... 42 Maria Pierzchalska – A graduate of the Faculty of Law and Administration at the University of Warsaw. From 1991
PhD in economics from the Faculty of Economics and Social Sciences at the Warsaw School of Economics. Since
1977 she was an employee of the Social Insurance Institution in Radom. In 1991 she became director of Social
ABOUT THE AUTHORS Insurance Institution in Radom. Since 1995 she has been rector of the several Universities in Radom. She is an author
of several publications on social security and social policy. She is a organizer and co-organizer of numerous scientific
conferences, founder of the “Open Hearts” Foundation and the Polish Social Insurance Association in Radom.
Founder and rector of the European University Radom-Warsaw.
Content List and Abstracts are easy to find at the following website:
http://politykaspoleczna.ipiss.com.pl Agnieszka Sowa-Kofta – Assistant Professor at the Institute of Labour and Social Studies and expert of the
Center for Social and Economic Research – CASE Foundation. Her research interests focus on social protection
policy, including poverty, inequalities, health and long-term care. She has been participating in numerous national
and international research projects.

Ryszard Szarfenberg – PhD in political sciences, employed at the Warsaw University in the Institute of Social
Policy, main research areas are poverty, social exclusion and social assistance, reviewer at the International Journal
of Social Welfare.
View publication stats

Nr indeksu 369209
PL ISSN 0137–4729
Editors: Elżbieta Bojanowska, Ph.D. (Cardinal Stefan Wyszyński University), Kazimierz W. Frieske,
Professor (Institute of Labour and Social Studies)
Reviewers: Professor Bożena Balcerzak-Paradowska (Institute of Labour and Social Studies), Professor
Marek Bednarski (Institute of Labour and Social Studies), Professor Jolanta Grotowska-Leder (Univer-
sity of Lodz), Professor Barbara Pasamonik (The Maria Grzegorzewska Pedagogical University), Profes-
sor Krzysztof Piątek (Nicolaus Copernicus University in Toruń), Professor Zenon Wiśniewski (Nicolaus
Copernicus University in Toruń)

The Institute of Labour and Social Studies – ILSS (Instytut Pracy i Spraw Socjalnych) based in Warsaw,
Poland, is a scientific research institute. The Institute has been operating for forty years serving not only
government administration and policy makers, but also taking active part in academic research works,
tutoring and supervising series of publications, especially those valuable in the teaching process. The
Institute’s basic research works are accompanied by applied studies, and the requirements of current and
strategic social and economic policies. The main forms of activities are: Research activities as: statutory
research, State Committee for Scientific Research grants, international projects, seminars, conferences.
International co-operation as: international research projects, bilateral research projects, data
base development; Expert reports and consulting as: assignments commissioned by various institutions,
activities of public services; Education as: post-graduate studies, phd studies. The research activities of
the Institute cover the labour and social policy questions in an interdisciplinary manner. The research THE POLISH MONTHLY JOURNAL
directions are adjusted to the current needs of the national socio-economic policy, and comprise such
areas as economy, law, political sciences, sociology, pedagogic sciences. The research covers the topics
crucial to currently pursued socio-economic policy and directions of change processes, such as:
• Labour problems (labour market policy, migration for work, human resources management,
working time, remuneration and motivation systems, occupational science, labour law).
• Collective labour relations (social partners, collective disputes, employee participation, collective
bargaining, collective agreements, collective labour law).
• Social policy (state social policy, social security, social institutions and instruments, family

CHILD BENEFIT PROGRAMME 500+

problems and family policy, poverty, social exclusion and counteracting measures).
Institute research findings are used by the central and local government administration as well as
by business entities. The publishing house of the Institute prepares numerous publications (for Polish
and international markets) that are useful in the teaching process. The seminars and conferences
organized by ILSS are forums for exchanging experiences, ideas, expertise and knowledge on a national
OUTCOMES AND OUTPUTS
and international level. The researchers employed in the Institute are recognized scientists, both
in Poland and abroad. Their expertise and experience encourages foreign partners to undertake
international research projects with ILSS. As a leader of labour and social studies in Poland, ILSS took
part in numerous EU funded research activities under 6th & 7th FP, PHARE, Leonardo da Vinci, etc.  IN THE SHADOWS OF EU
The Institute has actively participated in the processes of accession and integration of Poland into
the European Union. In the wake of the accession the research activities focused on:
– Problems of adaptation of Polish law to European legal regulations,  EXPECTED IMPACT ON LABOUR MARKET
– Influence of EU integration on labour market situation and trends,
– Labour market and social policy and the challenges of integration,
– European and Polish standards of social security,
 POTENTIALITIES: DEMOGRAPHY
– Social exclusion and reintegration. AND PENSION SYSTEM
Poland’s accession into the European Union on 1st of May 2004 does not mark the end of the ILSS
activities and struggles in these research areas. On the contrary, we expect new problems to appear
and to be identified and dealt with. If you have any questions regarding activities or research of ILSS,
 AGAINST POVERTY AND INCOME INEQUALITY
please feel free to contact us. We are eager to undertake any form of international cooperation with
institutions and individuals.  PERCEPTIONS WITHIN LOCAL KNOWLEDGE
OF THE POOR
INSTITUTE OF LABOUR AND SOCIAL STUDIES
address: ul. Bellottiego 3B, 01-022 Warsaw, Poland; office: tel. (48 22) 53 67 511; fax (48 22) 53 67 514
e-mail: instprac@ipiss.com.pl
Management: Łukasz Arendt, General Director of the ILSS
Izabela Hebda-Czaplicka, Economic Director
The Owner of the Title: Ministry of Family, Labour and Social Policy,
00-513 Warszawa, Nowogrodzka street, 1/3/5
Publisher: Institute of Labour and Social Studies, 01-022 Warszawa, J. Bellottiego street 3B
Published and Financed by the Owner of the Title
Printed and bounded by: Publishing House MFLSP. Ordering 643/2017. Number of Copies: 150. No 1 ENG (13) WARSAW 2017