Poland · Income Support and the Social Safety Net During the Transition

This report describes the system of income transfers in Poland, assesses current arrangements, and makes recommendations for improvements. There are two main conclusions. First, current arrangements require reshaping to meet the needs of a market economy: additional expenditure is needed for unemployment compensation and poverty relief, with cuts in excessive spending on some other benefits. Second, the savings from the latter (growing over time to 3 percent of GDP) will finance most, though possibly not all, the additional costs of the former. With appropriate reshaping, therefore, it is possible to have an affordable, efficient and adaptable social safety net. The recommendations are not intended as a rigid blueprint, nor to guide Poland towards any specific model of income support. The aim is more limited: to suggest a solid foundation, upon which Poland can build a system which corresponds to its specific needs.