Lithuania attempts to tackle its alcohol crisis with welfare cuts


While countries like Finland and the Netherlands consider universal basic income, welfare recipients in Lithuania are bracing themselves for even more government intervention. In addition to means tests, politicians are currently debating controversial measures to introduce mandatory treatment for welfare recipients struggling with alcohol abuse.

In December, the head of Lithuania’s Parliamentary Economy Committee, Remigijus Žemaitaitis, put forward a bill that would strip alcoholics of welfare payments and unemployment benefits if they refuse treatment. An inter-institutional action plan for tackling alcohol-related problems is to be drafted later this month.

Lithuania has one of the highest levels of alcohol consumption in the world. According to the World Health Organisation, in 2015 Lithuania had the second-highest number of alcohol-related deaths in the world – nearly 15 per 100,000.

Although recent measures, such as the banning of the sale of alcohol in petrol stations, has shown a willingness to tackle the problem, two recent news stories reveal the true extent of the crisis.

In November, a man killed four women after consuming an excessive amount of alcohol. Two months later, a father with an alcohol addiction killed his two children by throwing them into a well following a domestic dispute. Both men were on benefits.

For Vitalis Nakrosis of the Public Policy and Management Institute think-tank, the Lithuanian government needs to find a “balanced alternative” to both the universal income model and Lithuania’s rigorous system of testing for benefits if it truly wants to help the most vulnerable.

“It is the so-called ‘front office’ that needs to be strengthened and engaged–service providers who are the closest to families at risk,” he tells Equal Times. “Many civil servants prefer working with policy-making, monitoring and similar functions in Vilnius, in warm offices and a team environment rather than directly engaging with families-at-risk, usually in rural areas, cold weather, and without adequate funding.”


Workfare: welfare with work strings attached

Lithuania’s welfare system is already frugal. According to the Ministry of Social Security and Labour, only 4 per cent of people in Lithuania receive welfare benefits, while 9 per cent are unemployed and more than one-fourth of Lithuanians live at risk of poverty.

The amount of unemployment benefits received depends on one’s previous employment history. But unemployment and low income often overlaps. Those on unemployment benefits, especially if they are considered to be ’low-skilled’, can be called to perform public works by local employment offices. Those on income support, if fit to work, are now subject to a requirement to perform socially-useful work that benefits the local community.

Surprisingly, this once controversial measure is supported by some of Lithuania’s trade union leaders.

“Unemployment benefits should not be confused with income support. The former is like insurance. As for public works, even the position of the International Labour Organization is different now. Previously it was regarded as forced labour, but not any longer,” Artūras Černiauskas, the president of the Lithuanian Trade Union Confederation, tells Equal Times.

Petras might beg to differ. The 52-year-old former construction worker gets meagre welfare support in exchange for maintaining green areas for a public enterprise in Alytus, the region with the highest unemployment rate in Lithuania.

“I used to work in construction, but now I can’t do it for health reasons,” he tells Equal Times. “Some months I pay €100 (US$110) just for my heating, and here I get a minimum wage (€350, or US$390), or allowance, which I’ll still lose if I remain unemployed for the whole year. Plus €81 ($90) in welfare benefits – what remains? Perhaps I could chew some grass here,” he jokes.

His colleague Gerardas, 46, says he cannot even qualify for unemployment allowance, as he spent most of his life farming and did not accumulate much employment history.

“I receive just enough for cigarettes and fuel,” he tells Equal Times. Meanwhile, his municipality is currently debating how to prevent welfare recipients from using allowances for such pleasures by disbursing allowances via social workers rather than handing out cash.

This way, social workers can control what the benefits are spent on, and intervene early if they suspect it is being used inappropriately.


“Shaking off scoundrels”

In 2012, the Ministry of Social Security and Labour piloted a project in which five municipalities took over the responsibility for means-testing and disbursing welfare benefits. Municipalities could keep the money saved by rejecting benefit applicants.

The initiative won enthusiastic support from some sections of the Lithuanian media. For example, the country’s largest national daily, Lietuvos rytas, commended municipalities for “shaking off scoundrels,” which led to average savings of 20 per cent of municipal welfare budgets.

“We had full support of working people,” says Loreta Laugalienė, the head of the social support division of Raseiniai municipality, which participated in the pilot. “The Mayor’s main statement was that a working person should not live worse than a welfare recipient.”

The police cooperated by reporting people caught selling illegally purchased goods, such as alcohol and cigarettes. The number of welfare recipients shrank by 13 per cent in 2012. Laugalienė describes the cuts as an act of social justice – now only those in real need get help, and the local community is more positive towards welfare recipients, she says.

In 2014, the pilot project was rolled out across the entire country. Now, welfare recipients are also required to report the sale of larger items such as cars, or any unexpected windfall payments such as an inheritance. In smaller municipalities, local communities report on the people they suspect of receiving illegal income – usually cross-border trade, irregular work or remittances from family members abroad.

As reported by Lietuvos rytas, last year 439 families in Kaunas, the second-largest city in Lithuania, lost their benefits for refusing to perform socially-useful work. The average welfare payment was €62 a month. The means test is now supervised by advisory councils, which involves local NGOs and businesses. The capital Vilnius even has a hotline to report on welfare fraud.

One-fourth of all welfare recipients were called to do socially-useful work (up to 40 hours a month, as stipulated in the laws) in the first half of 2015. Benefits are provided as payments or in-kind, and are progressively reduced with time.

If new regulations regarding addictions are approved, municipalities will get even more power to examine how allowances are spent. Media reports about welfare recipients trying to trade their food stamps for alcohol has created public support for more scrutiny and compulsory rehabilitation.

“Socially-useful work is intended for providing and maintaining working skills,” says Svetlana Kulpina, head of the Financial Social Assistance Division of the Ministry of Social Security and Labour. “This also changes the attitude of the society that welfare recipients are dependent on the state.”

Černiauskas from the trade union confederation supports this view. “If people get services from society, they should give some services back.”

Nonetheless, no-one interviewed by the Equal Times supported more checks. In Laugalienė’s words, the current system already provides social benefits in kind, and the duty to work keeps recipients from drinking. Kulpina seconds that view, emphasising that the right to social support is guaranteed by the Constitution.