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Ceturtdiena 20.02.2020 | Name days: Smuidra, Vitauts, Smuidris
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Latvian government proposes increasing state family benefits

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Latvia, state, benefits, families, welfare ministryIn the context of expected tax changes it is proposed to increase the family state benefit for children, estimating that this may cost an additional amount from EUR 81 to EUR 97 million a year, according to information available to LETA in regards to the offer for tax policy guidelines for 2021 to 2025.

This is an offer from Welfare Ministry and Bank of Latvia. It may change during discussions with social partners.

The government’s action plan details the objective for Finance Ministry to develop by 31 May 2020 medium-term state tax policy guidelines. The goal of new guidelines is providing support for the improvement of residents’ quality of life and contributing to growth of the national economy and international competitiveness.

 Changes to guidelines also offer multiple scenarios for support for families with children by means of increasing family state support. This also means benefits for dependents in all scenarios would be kept at EUR 250.

The first scenario offers changing the state family benefit system, rejecting additional benefits per child in each family. It is proposed to pay EUR 25 for one child, EUR 100 for two children, EUR 300 for three and EUR 100 on top for every next child. This proposal’s negative influence on the state budget is estimated at EUR 97 million.

The second scenario proposes paying EUR 25 for one child, EUR 100 for two, EUR 225 for three and EUR 75 for every next child. The negative influence of this proposal on the state budget is estimated at EUR 81 million.

The third scenario proposes maintaining the current family benefit amount but no longer applying benefits for children in a family’s care. At the same time, it is also proposed to adopt a new EUR 50 benefit for employed people for children. The current benefit system provides EUR 11.38 for the first child, EUR 22.76 for the second child, EUR 34.14 for the third child and EUR 50.07 for the fourth and every next child. This proposal’s negative influence on the state budget is estimated at EUR 30 million – EUR 45 million.


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