The “Family 500+” Programme was implemented in 2016 as an antidote to demographic issues in Poland. Polish families have received PLN 500 per month for each child under 18 ever since. Until 30 June 2019, the benefit for the first child was granted to parents or legal guardians who met the income criterion, whereas for the second and subsequent children the funds were paid regardless of income. Since 1 July 2019, the child benefit has been paid also for the first child, regardless of income. The parents who work abroad are also entitled to the 500+ benefit. The “Family 500+” Programme is covered by the social security coordination provisions, effective in the EU Member States and the countries of the European Economic Area. The aim of this coordination is above all to establish the benefit amount, eliminate cases where the money is paid in more than one country at the same time and enforce payment of unduly received benefits.
To date NIK has conducted two audits on child benefits. Their results showed clearly that the social security system in Poland does not work properly.
The Minister took numerous efforts to streamline the child benefit system. For instance, he organised training programmes for province office employees responsible for coordination of social security systems. The Minister provided governors with financial aid to strengthen the staff of province offices after they took over tasks from the province marshals. In 2017, it was less than PLN 4 million and in 2021 it was nearly PLN 56 million. Due to the Minister’s efforts in 2018-2020, the number of FTEs to handle these tasks went up by 37%. Also, the requests were reviewed more efficiently. In 2020, one employee handled 73.5% of requests more than in 2018. Besides, in 2018-2020 the average cost of issuing a decision went down by nearly 19%, i.e. from PLN 231 to PLN 188. The Ministry’s data point to significant differences between individual provinces in that respect.
In 2021, several legal solutions were adopted to streamline the coordination of the social security system. For instance, the amending Act of September 2021 changed the institution granting child benefits to the Social Security Office. Also the way of submitting requests has changed – from that moment, they were to be submitted only electronically. The new provisions were supposed to speed up the process of granting child benefits to the families of migrating individuals. Besides, the new law was to compensate the child benefit amount, e.g. in case the benefit granted abroad was lower than in Poland.
Poland was one of the first EU countries to access the Electronic Exchange of Social Security Information system. The system implementation on 2 September 2019 considerably improved the flow of information between relevant foreign institutions. This in turn translated into shorter and simpler procedures and thus faster review of child benefit requests.
On 1 January 2018, governors took over tasks from province marshals related to granting child benefits. All in all, nearly 78.5 thousand child benefit cases were taken over. According to NIK the audited governors were properly prepared to take over those tasks and adequately used funds to perform them (in the audited period it was over PLN 67.5 million in total). The takeover did not always go smoothly, though. The great majority of cases (as much as 68%) needed to be reviewed from the scratch since the marshals did not do anything about them. Staff shortages were one of key difficulties. Nearly 250 employees in total went to the audited province offices. About 8.5% of them did not take up work, though (because of maternity leaves, childcare leaves, sick leaves and others).
The majority of audited province offices struggled with a big number of unsettled cases. As of 30 June 2021, over 61 thousand requests in total were not reviewed, of which in nearly 59 thousand cases the province offices did not take any actions. As a result of the great number of acquired cases and related organisational chaos, employees of four audited public institutions were not properly informed about their rights and obligations or the scope of their responsibilities. In some cases public offices did not make job descriptions, made them with delay or failed to document them properly. That was inconsistent with the management control standards, the Labour Code and the ordinance on job descriptions.
The audit revealed that nearly 57% of requests were reviewed after the deadline. In some cases (8%) one had to wait up to 3.5 years. Delays were identified in nine of ten institutions. Besides, nine public offices failed to inform parties to proceedings that the requests were not reviewed.
It happened that the right to child benefits was given to non-eligible persons. In 2018-2021 (until 30 June) the auditees issued over 6 thousand such decisions totalling nearly PLN 13.7 million. The audit showed that the governors – who were statutorily obliged to recover those receivables – executed their tasks with delay. In three institutions more than half of decisions concerning unduly received benefits were issued after the deadline (in one case after 3.5 years). Also enforcement proceedings were conducted sluggishly. In an extreme case the proceedings were started after more than two years. In three public offices NIK auditors identified single situations where receivables or interest due to unduly received benefits – amounting to PLN 1.1 thousand in total - were not pursued at all.
In 2018 – 2021 (1st half), over a thousand requests were submitted for relief in the repayment of unduly received benefits. The governors reviewed most of the repayment relief requests (57%) after the deadlines defined by the law (up to 2.5 years) and 35% of reliefs were granted without checking properly if that was justified.
None of the audited entities applied relevant provisions of the Tax Ordinance with regard to reliefs in the repayment of unduly received benefits or they applied those provisions selectively.
Consequences of delays in proceedings to establish unduly received benefits and repayment reliefs as well as differences in the interpretation of legal provisions were bitter for eligible persons as they had to pay higher interest.
Recommendations
To the Minister of Family and Social Policy to start legislative works on the State Assistance Act, to make sure it specifies if the Tax Ordinance provisions apply to issues not set out in the Act, and if so, to what extent.
To the Minister of Finance to recommend interpretation of effective provisions of law defining the area of budget reporting in a way to ensure homogenous use of principles of recording unduly received benefits covered by the coordination and adequate recognition of related incidents in budget reports.
