Western Balkans Social Protection Situational Analyses KOSOVO This project is funded by the European Union Western Balkans Social Protection Situational Analyses KOSOVO © 2022 International Bank for This work is a product of the staff of The World Bank with external contri- Reconstruction and Development / butions. The findings, interpretations, and conclusions expressed in this The World Bank work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. 1818 H Street NW, Washington DC 20433 This publication was produced with the financial support of the European Telephone: 202-473-1000 Union. Its contents are the sole responsibility of World Bank staff and do Internet: www.worldbank.org not necessarily reflect the views of the European Union. For the European Union, the designation of Kosovo is without prejudice to positions on status and is in line with UNSCR 1244/1999 and the ICJ Opinion on the Rights and Permissions Kosovo Declaration of Independence. The material in this work is subject to copyright. Because The World The World Bank does not guarantee the accuracy of the data included in Bank encourages dissemination of this work. The boundaries, colors, denominations, and other information its knowledge, this work may be shown on any map in this work do not imply any judgment on the part reproduced, in whole or in part, for of The World Bank concerning the legal status of any territory or the noncommercial purposes as long as endorsement or acceptance of such boundaries. full attribution to this work is given. Any queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@worldbank.org. ii Western Balkans Social Protection Situational Analyses KOSOVO Western Balkans Social Protection Situational Analyses KOSOVO Contents: ACKNOWLEDGEMENTS v LIST OF ACRONYMS vi 1. Introduction 1 2. Poverty and labor market outcomes 4 3. Brief overview of the social protection system in Kosovo 6 4. Cash transfers to support the poor, the vulnerable and persons with disabilities 9 5. Social services 13 6. Pensions 15 7. Employment and labor market policies 18 8. Disaster preparedness and response: learning from the COVID-19 response 21 9. Reform priorities and knowledge gaps 23 9.1 Kosovo: Reform priorities 25 9.2 Kosovo: Areas for further research/knowledge gaps 27 RESOURCES USED 28 Annex 1. Key gaps in management and delivery of social services 30 Annex 2. Existing pension schemes in Kosovo 31 iii Western Balkans Social Protection Situational Analyses KOSOVO List of Figures: Figure 1: Poverty headcount ratio at $5.50 a day in select countries 4 (2011 PPP, % of total population) Figure 2: Labor market indicators in the Western Balkans (2018 and 5 2019) Figure 3: Government programmatic spending on social protection 7 in Kosovo, 2008-2019 (% of GDP) Figure 4: Expenditure on social protection programs in select 8 countries, 2017-2019 (% of GDP) Figure 5: Composition of government spending on social protection 8 program in Kosovo, 2008-2020 Figure 6: Composition of spending on cash transfers in Kosovo, 9 2019 (% of GDP) Figure 7: Spending on last resort income support in select countries, 11 2016-2019 (% of GDP) Figure 8: Coverage and benefit incidence of social assistance 11 in select countries, bottom quintile, 2016-2018 Figure 9: Ratio of average pension to average gross wages 16 in select countries, 2018 Figure 10: Expenditure on labor market policies in Kosovo, 2018 18 (% of GDP) List of Tables: Table 1: Situational analysis of the social protection system 2 in Kosovo Table 2: Overview of the social protection system in Kosovo 6 Table 3: Pension parameters in Kosovo 15 iv Western Balkans Social Protection Situational Analyses KOSOVO Acknowledgments This situational analysis has been prepared by a World Bank team composed of Natalia Millán, Zoran Anusic, Stefanie Brodmann, Sarah Coll-Black, Jamele Rigolini and Cornelius von Lenthe. The team is grateful to Gozde Meseli Teague and Ana Maria Oviedo for contrib- uting to the data analysis. The team would like to thank representa- tives of GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit) for their generous sharing of information and Enrica Chiozza (European Commission), Dario di Benedetto (European Union Office in Kosovo) and William Wiseman (World Bank) for their useful comments. Special thanks to Darcy Gallucio for editing and providing detailed comments, as well as Elizaveta Tarasova for the cover page and graphic design. The team would also like to thank the Government of Kosovo for sharing feedback and views on findings and recommendations, in particular to Mentor Morina, Director of the Department for Social Policy and Family at the Ministry of Finance, Labor and Transfers. Finally, the team appre- ciates the validation of findings and comments received from members of the Austrian Development Agency (ADA), the International Organiza- tion for Migration (IOM), the Kosovo Disability Forum, Save the Children and UNICEF at a consultation of the situational analysis in October 2021. The analysis was made possible due to the generous funding from Europe 2020 Trust Fund by DG NEAR. The note was prepared under the guidance of Linda van Gelder (Country Director for the Western Balkans), Massimiliano Paolucci (Country Manager for Kosovo) and Cem Mete (Practice Manager, Social Protection and Jobs Global Practice, Europe and Central Asia Region). v Western Balkans Social Protection Situational Analyses KOSOVO List of acronyms ALB Albania ALMPs Active labor market programs BIH Bosnia and Herzegovina CSW Center for Social Work EARK Employment Agency of the Republic of Kosovo EU-SILC European Union Survey on Individual Living Conditions EUR Euro GDP Gross Domestic Product GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit HBS Household Budget Survey KAS Kosovo Agency of Statistics KPC Kosovo Protective Corps KPST Kosovo Pensions Savings Trust KSF Kosovo Security Force KSV Kosovo LRIS Last resort income support MFLT Ministry of Finance, Labor and Transfers MIS Management information systems MKD North Macedonia MLSW Ministry of Labor and Social Welfare MNE Montenegro NEET Not in employment, education or training NGO Nongovernmental organizations PAYG Pay-as-you-go PMT Proxy means test PPP Purchasing power parity RAE Roma, Ashkali and Egyptian SAS Social Assistance Scheme SRB Serbia Note: All dollar amounts are PPP US dollars unless otherwise indicated. vi Western Balkans Social Protection Situational Analyses KOSOVO Introduction An effective and equitable social protection system Conceptually, social protection systems rest on can help Kosovo to promote human capital, foster four main pillars: social assistance, social services, productivity, and reduce poverty. Since its inde- social insurance, and labor market programs.2 Social pendence in 2008, the country has made consid- assistance aims to protect people from falling into erable socioeconomic progress, benefiting from poverty and provide support at certain points in the support of the international community and its the life cycle or in response to particular vulnera- own diaspora. Kosovo’s economic growth has not bilities. It encompasses non-contributory (govern- been sufficient to reduce the high rates of unem- ment-funded) programs, including non-contrib- ployment or create formal jobs. It stands out as utory pensions (often called social pensions), and the Western Balkan country with the lowest labor family and child cash benefits. Social services market outcomes, especially for women, and is one support individuals and their families to improve of the poorest countries in Europe and the poorest their living conditions across the life cycle. Social in the Western Balkans, secondly to Albania. The insurance aims to smooth income across the life recent COVID-19 pandemic has highlighted the cycle and protect people from shocks and typically vulnerability of the population to the negative comprises benefits based on the length and level effects of shocks, which are anticipated to become of individual contributions (old-age, disability more frequent with climate change. And yet, in and survivors’ pensions). Finally, employment and contrast with other Western Balkan countries, labor market programs aim to improve the func- Kosovo’s working-age population is on the rise tioning of the labor market (through employment and the country stands to benefit from the demo- services), enhance labor supply (through training) graphic dividend. Kosovo can respond to these and increase labor demand (through subsidies or challenges and harness opportunities by investing public works); the programs also seek to smooth in human capital while promoting employment and income during unemployment (through unemploy- protecting those vulnerable to shocks. A strong ment insurance) or to protect employment due to social protection system can play an important role childbirth (through parental benefits). This set of in promoting these objectives. programs and policies helps families and individuals build resilience against events and shocks across Social protection is a fundamental pillar of social the life cycle and build human capital. policies. It is essential to protect people from falling into poverty and destitution; to help people cope Although the specific characteristics of each with adverse idiosyncratic or systemic shocks and system vary with history and local conditions, a smooth consumption over their lifetime; and to social protection system should ideally satisfy four ensure access to jobs and promote human capital basic principles. The first is adequacy. The level and accumulation. Social protection comprises a variety generosity of support provided should be aligned of policy tools, including cash transfers to the poor with the level of need of poor and vulnerable house- and persons with disabilities, social services for holds. The second is effectiveness and balance. Are vulnerable populations, employment and labor the funds allocated to each program used effec- market programs and unemployment insurance, tively or are there ways to improve impacts for equal and old-age pensions. levels of spending? Also, could program design be improved to better promote objectives such as Social protection systems contribute to overall poverty reduction, employment and the acquisition economic and social resilience and foster of human capital? And is the balance of spending long-term growth by securing continued invest- across programs appropriate given the population’s ments in human capital, including by promoting vulnerabilities and needs, with sufficient coverage adaptability in rapidly changing labor markets.1 of population groups throughout their life cycle? Back to table of contents 1 1 World Bank. 2012. Resilience, equity and opportunity. The World Bank’s Social Protection and Labor Strategy 2012-2022. World Bank: Washington, D.C. 2 Health insurance is not considered here, although it forms part of social insurance mechanisms. Western Balkans Social Protection Situational Analyses KOSOVO The third element is equity. Government spending protection but that such spending is largely unbal- on social protection systems should invest more on anced and ineffective, with little impact on poverty the poor and vulnerable than on the middle or upper or equity. Most government spending is allocated classes. Especially when not considering spending toward old-age pensions, and recent increases in on non-contributory pensions, this is not the case spending on war-related pensions have crowded in Kosovo. The fourth and final element is sustain- out spending targeted toward the poor. Spending ability. Is the level of spending sustainable across on social services and labor market programs is time and can the system honor promises made to disproportionately low. Benefits are not always future generations, in particular in terms of pension adequate and, in some cases, may cause disincen- benefits? tives for work. The ability of programs to meet the needs of beneficiaries varies significantly, which This note presents a situational analysis of the creates inequities and gaps in the system. A lack of social protection system of Kosovo. It assesses the case management and referral systems, as well as extent to which the social protection system fulfils low spending, make social services and labor market its purpose and proposes areas for reform in the programs largely ineffective, as people are not able short-, medium-, and long-term. To this end, this to access a range of services and benefits at the note seeks to assess each category of social protec- same time or in the needed sequence. There is also tion, namely: social assistance, social services, social concern regarding the sustainability of spending, insurance (specifically pensions) and labor market particularly with respect to new schemes that are programs, in terms of program coverage, equity, not based on data. Lastly, the system does not have sustainability and effectiveness. Based on this the capacity to respond to economic shocks and analysis, it proposes policy priorities and future crises, as witnessed during the COVID-19 pandemic. areas of focus. The note is based on analysis of administrative data, the most recent European The Government of Kosovo has developed a social Union Survey on Individual Living Conditions protection system from the ground up and has (EU-SILC) and Household Budget Survey (HBS), a experienced forward movement, roadblocks, and review of relevant literature, and engagement with setbacks. The challenges summarized in Table 1 are technical experts in the Ministry of Finance, Labor not new to the country,3 but nor are they intractable. and Transfers (MFLT) and with select development Recent initiatives raise equity and sustainability partners. concerns (for example, a universal child grant) but also demonstrate legislative commitment to The analysis finds that Kosovo spends a significant bettering the lives of the Kosovar population (new share of gross domestic product (GDP) on social laws on legislative and social services). Table 1: Situational analysis of the social protection system in Kosovo Area Main challenges Main recommendations Cash transfers • Social Assistance Scheme (SAS) is the only • Reform the SAS targeting mechanism for more poverty-targeted program. SAS has low coverage efficient poverty targeting; consider expansion of and stringent categorical eligibility criteria that coverage for stronger poverty reduction. exclude most of the poor. • Reduce spending on war-related pensions and • War veterans and other war-related pensions reallocate spending toward the poverty-targeted crowd out poverty-targeted government SAS. spending, are much more generous than those aimed toward the poor and may disincentivize • Assess the adequacy of the disability pension, work. expand coverage to persons with partial disabilities and drop regular reassessment. • Disability benefits are inadequate, inequitable and bias-exposed. Eligibility requires declaration of • Introduce an integrated beneficiary registry 100 percent disability with regular reassessments. drawing on existing MIS data. War-related or special pensions provide partial • Introduce a social registry (information system) disability benefits that tend to be more generous to better identify eligible households across and do not require reassessment. programs. • Information on social benefits is housed in • Introduce case management to ensure effective multiple management information systems. There support across the beneficiary life cycle. is no social registry. Back to table of contents 2 3 MLSW. 2017. Sector Strategy 2018-2022. 17.12. 2017. Western Balkans Social Protection Situational Analyses KOSOVO Social services • Social services coverage is low and quality varies. • Strengthen social services financing. • Social services lack a case management system. • Introduce a case management model. • Social services delivery lacks a system to coor- • Increase service delivery and human resources dinate referrals for social benefits and case financing. management. • Integrate social services and benefits provision: • Social workers do not receive adequate training incorporate regulations and procedures for refer- and a lack of professional profiles undermines rals. human resource management. • Expand the number of providers of child protec- tion services and their capacity. Pensions • Non-contributory pensions (basic, ex-contribu- • Redesign the basic pension to provide a minimum tory, special, and war veteran and other war-re- floor and to reduce for other pensions sources. lated pensions) vary significantly in equity. • Redesign the basic pension to means test and • Contributory pensions exclude most of the work- exclude 20 percent of the highest income earners. ing-age population (about one third participate in • Phase out ex-contributory benefits. the second pillar). • Consolidate existing categorical benefits. • Contributory pensions only provide temporary • Introduce a mechanism to provide annuities or support until the account is depleted. scheduled withdrawals for the second pillar. • Categorical pension benefits have proliferated, significantly increasing the fiscal costs of pensions. Employment and • ALMPs are not well resourced and do not partner • Increase public resources for ALMPs and allow active labor market with nongovernmental organizations, civil society partnerships with non-public providers. programs (ALMPs) or the private sector. • Strengthen the capacity of the Employment • The official employment agency (EARK) has low Agency of the Republic of Kosovo (EARK) by implementation capacity. hiring and training counsellors, including for • Programming decisions are not based on labor employer outreach, proactive case management market and jobseeker data and information. and specialized support for vulnerable groups. • Codified monitoring and evaluation standards • Base programming decisions on labor market and for data-driven reporting have largely not been jobseeker data and information. implemented. • Establish rigorous monitoring and evaluation. • There are no unemployment benefits to support • Assess options for temporary financial support for workers who lost their employment. those actively searching for jobs (unemployment benefits). Disaster • Lack of capacity to expand and contract the • Implement lessons learned from COVID-19 preparedness and social protection system for economic events and response. response shocks, as demonstrated during COVID-19. • Systematically assess the readiness of current social protection programs for crisis response, including: o Range/mix of programs; o Capabilities of rapid outreach, assessment, enrollment and payment; o Flexibility of program rules and procedures; and o Robust processes and systems. • Strengthen data collection and analysis. • Introduce a social registry (integrated beneficiary registry). • Build an information system with the capacity to assess eligibility in the midst of an economic event or shock. • Establish disaster risk protocols. • Identify financing mechanisms, including budget reallocations, reinsurance and reserve funds. • Map the responsibility of (internal/ external) actors for disaster response and establish coordination mechanisms. Source: Authors’ elaboration. The situational analysis of the social protection system in Kosovo unfolds as follows. After this introduc- tion, section 2 reviews the country’s main poverty and labor market outcomes; Section 3 provides a brief overview of the social protection system; Section 4 looks at non-contributory cash transfers to support the poor, vulnerable and disabled; Section 5 examines social services; Section 6 analyzes pensions; Section 7 explores employment and active labor market programs; Section 8 reviews the social protection response to the COVID-19 pandemic; and Section 9 concludes by identifying the knowledge gaps and main areas for reform. Back to table of contents 3 Western Balkans Social Protection Situational Analyses KOSOVO Poverty and labor market outcomes Kosovo stands out among European countries for its poverty and its low rates of employment and high rates of unemployment and inactivity, with concertedly worse outcomes among its youth, women and Roma, Ashkali and Egyptian populations. Yet Kosovo also stands out among Western Balkan countries for its demographic dividend and the potential return on investment in labor markets outcomes. Kosovo is one of the poorest countries in Europe quarters of 2018 and 2019, the overall Kosovar and the poorest in the Western Balkans after working-age population rose by 1.5 percent. Albania. One in four Kosovars lived on less than USD 5.504 per day in 2017 (Figure 1). Household Kosovo stands to benefit from the demographic Budget Survey (HBS) data show the poor are over- dividend, easing pressure on pension and health represented in households headed by women, in care costs. However, to reap the benefits of its rela- households in which the head has not completed tively young population, Kosovo needs to improve secondary education, in larger households and labor market outcomes. This includes employment those with more children (World Bank, 2019a), and and activity rates among the working-age popu- among Kosovars belonging to the Roma, Ashkali lation, and especially among youth (World Bank, and Egyptian (RAE) populations.5 2020a). Figure 1: Poverty headcount ratio at $5.50 a day in Kosovo’s labor market outcomes are the weakest in select countries (2011 PPP, % of total population) the Western Balkans. As of the second quarter of 40% 2019, only 29.9 percent of the working-age popu- 35% 33.8% lation was employed in Kosovo; in contrast, the 30% average was 54.6 percent in the Western Balkans (Figure 2, panel a). Unemployment, at 25.3 percent, 24.4% 25% is the highest in the Western Balkans and is even 20% 19.3% 17.9% higher among women (32.7 percent) and youth 15% 15.6% (49.1 percent) (Figure 2, panel b). Inactivity rates, especially those of women and youth, are also 10% high. Less than half (40.1 percent) of working-age 5% Kosovars were either employed or unemployed; 0% among women, the corresponding figure was 20.5 ALB KSV SRB MKD MNE percent and among youth, the corresponding figure 2017 2017 2017 2018 2016 was 24.2 percent. Among youth ages 15-24 years, Source: World Development Indicators (2021). almost one-third were neither in employment, Note: Albania (ALB), Kosovo (KSV), Serbia (SRB), North Macedonia (MKD) and Montenegro (MNE). education or training (NEET) in 2018 (Figure 2, panel d), the highest proportion in the Western Balkans. High population growth rates paired with strong Lower schooling, early marriage and entrenched emigration pressures create demographic chal- attitudes affect women’s participation in the labor lenges. The average age of Kosovo’s 1.8 million market (World Bank, 2017b). inhabitants is 26 years (World Bank, 2017b), and about 24 percent of the population is under 20 years Labor market outcomes are even worse for the of age (Kosovo Agency of Statistics 2021 popula- marginalized RAE population. In 2017, only 13 tion projections based on 2011 census). Unlike in percent of the RAE population was employed, and most Western Balkans countries, the working-age the unemployment rate was 48 percent (Robayo- population (15-64 years) in Kosovo is on the rise Abril and Millan, 2019). Gender norms and dispar- (World Bank and wiiiw, 2020). Between the second ities are particularly salient among the RAE popu- Back to table of contents 4 4 2011 purchasing power parity. 5 According to the latest census (2011), two percent of the population, or almost 36,000 individuals, identified as Roma, Ashkali or Egyptian. Because ethnicity is self-reported, the population could be even higher. The Council of Europe estimates the size of the RAE population in Kosovo could be as high as 50,000. Western Balkans Social Protection Situational Analyses KOSOVO lation; low education outcomes and discrimination also play an important role in lower labor market outcomes for the male and female RAE population (Robayo-Abril and Millan, 2019). Kosovo’s informal sector is among the highest in Europe. Depending on the definition used, informal workers made up between 35.6 percent and 42.4 percent of the workers ages 15-64 years in 2018.6 Informality is even higher among youth, males, the less-educated and rural residents (Robayo-Abril et al., 2020). A significant share of the Kosovar popu- lation also relies on remittances from the large diaspora (Feher et al., 2016). Figure 2: Labor market indicators in the Western Balkans (2018 and 2019) a. Employment rate b. Unemployment rate 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% WB6 ALB BIH MNE MKD SRB KSV WB6 ALB BIH MNE MKD SRB KSV Total 15-64 Male 15-64 Female 15-64 Total 15-64 Male 15-64 Female 15-64 Total 15-24 Male 15-24 Female 15-24 Total 15-24 Male 15-24 Female 15-24 c. Inactivity rate d. NEET rate, ages 15-24 90% 35% 80% 30% 70% 25% 60% 50% 20% 40% 15% 30% 10% 20% 10% 5% 0% 0% WB6 ALB BIH MNE MKD SRB KSV WB6 ALB BIH MNE MKD SRB KSV Total 15-64 Male 15-64 Female 15-64 Total Male Female Total 15-24 Male 15-24 Female 15-24 Source: SEE Jobs Gateway: https://data.wiiw.ac.at/seejobsgateway.html. Note: Data for employment, unemployment and inactivity are the second quarter of 2019 and for the NEET rate are 2018. Back to table of contents 5 6 Estimates vary depending on the definition of informality. When defining informal workers as those who are employees and employers in small firms (5 or fewer workers), self- employed with or without employees in non-professional occupations (that is, clerks, service and market sales workers, agricultural workers, craft workers, machine operators and workers in non-professional occupations) or unpaid family workers, informality amounts to 42.4 percent based on 2018 Labor Force Survey data. If defined as an employee with no written contract, self-employed in firms with fewer than 5 workers, self-employed in non-professional occupations or unpaid family workers the informality rate is 35.6 percent (Robayo-Abril et al., 2020). Western Balkans Social Protection Situational Analyses KOSOVO Brief overview of the social protection system in Kosovo Government spending on social protection is high; social insurance in Kosovo is limited, with the bulk of social protection spending being directed toward non-contributory social assistance programs; spending on social services and employment and labor market programs is limited. Moreover, most social assistance transfers are not targeted toward the poor. Kosovo’s social protection system is therefore largely unbal- anced and ineffective. Table 2 segments the social protection system in evaluates the design features of non-contributory Kosovo along the four pillars, laying out the benefits pensions. The fourth section looks at employment and programs in each segment. In Kosovo, the and labor market programs. At the time of writing, term “pension” is applied to a number of programs the government was in the process of introducing with objectives that range from income security in new social protection programs, such as a universal old age, to assistance for people with disabilities child grant and maternity benefits for unemployed (work related or otherwise), and income support to women.7 Simulations show that a universal child war veterans and other special categories arising benefit would not be the best policy choice for from the war. These pensions are funded largely Kosovo. It would be very costly and have a small from the state budget, with contributory pensions progressive beneficiary incidence, meaning that being recently introduced. This given, the first less than half of the child benefit recipients would section analyzes the funding of all non-contributory belong to the poorest 40 percent of the welfare programs for systemic equity, balance and sustain- distribution and only a quarter would belong to ability. The second section considers social services the poorest 20 percent (World Bank, 2019c). These as defined in the table. The third section analyzes programs are not considered in the analysis below. the nascent contributory pensions and then Table 2: Overview of the social protection system in Kosovo Category Benefits and programs Cash transfers to support the poor, • Last resort social assistance - Social Assistance Scheme vulnerable and persons with disabilities • Material support for foster families • Assistance for exceptional needs • Energy/electricity subsidy • Material support for families with children up to 18 years of age with permanent disabilities Social services • Social and family services Pensions Contributory pensions (mandatory and voluntary) Non-contributory pensions, funded by the state budget • Basic pensions • Ex-contributory pensions • Family pensions • Work disability pensions • Early retirement pension scheme for Trepça Company employees Special laws, funded by the state budget • Special pensions for Kosovo Protection Corps, Kosovo Security Force, former political prisoners and teachers of the 1990s War-related pensions, funded by the state budget • Pensions for war veterans • Pensions for war-related categories, including martyrs' families, disabled veterans and their families, civilian victims of war and their families, and sexual victims of war. Disability pensions and compensations, funded by the state budget • Pension for persons with a permanent disability (age 18-64 years) • Pension for blind persons • Pension for persons with tetraplegia and paraplegia Back to table of contents 6 7 In Europe, the right to maternity and paternity leave applies mainly to persons who are employed; in certain cases unemployed women who receive statutory unemployment benefits and/or female students are eligible as well. Much less common are the cases of paid maternity/cash support for inactive and women without social insurance. Where this support exists, the schemes are means tested and part of the social assistance system (World Bank, 2019a). Western Balkans Social Protection Situational Analyses KOSOVO Employment and labor market programs • Vocational training • Public works • Wage subsidies • On-the-job training and internships • Entrepreneurship support • Maternity benefit Source: Authors’ elaboration (2021). Government spending on social protection has ex-contributory pensions9 representing more than risen significantly in recent years, though lags half of government expenditures followed by the countries in Europe and Central Asia. Between war veterans’ pension (Figure 5). With the bulk of 2008 and 2019, spending on social protec- spending allocated to pensions, Kosovo’s social tion nearly doubled as a percentage of GDP but assistance is unbalanced and ineffective. trailed the regional average by 2.5 percentage points (Figure 3).8 In Kosovo, government revenues primarily finance social protection (diverging from most countries). Social insurance is limited, and most working-age Kosovars do not contribute to the nascent fully funded contributory pension. In this context, government spending on social protec- tion is high (Figure 4). There is little spending on social assistance targeted toward the poor (Social Assistance Scheme). There is significant spending on non-contributory pensions, with the basic and Figure 3: Government programmatic spending on social protection in Kosovo, 2008-2019 (% of GDP) 2.5% 7.0% 6.0% 2.0% 5.0% 1.5% 4.0% 3.0% 1.0% 2.0% 0.5% 1.0% 0.0% 0.0% 2008 2009 2010 2011 2012 2013 2014 2016 2016 2017 2018 2019 Basic old-age pensions Ex-contributory pensions Social Assistance Scheme War-related schemes (excl. veteran pensions) War veteran pensions Other social assistance programs Disability pensions Special pensions Labor market Total (right axis) Source: Ministry of Labor and Social Welfare (2020) and Paun Jarallah et al. (2019). Note: Data on labor market spending are only available for 2017 and 2018. Back to table of contents 7 8 Figures include the Social Assistance Scheme, energy subsidies and assistance to families with children with disabilities, assistance to foster families and all government-funded pension schemes (basic and ex-contributory, special, war veterans and war-related, and disability pensions). 9 Ex-contributory pensions refer to government-funded benefits awarded to individuals 65 years of age and older who contributed at least 15 years to the former Yugoslav system. Western Balkans Social Protection Situational Analyses KOSOVO Figure 4: Expenditure on social protection programs in select countries, 2017-2019 (% of GDP) 16% 14% 12% 10% 8% 6% 4% 2% 0% WB6 SVK KSV ALB MNE MKD BGR BIH SRB ROU Average - 2017 2017 2019 2019 2019 2017 2018 2019 2017 latest year*** Labor market programs (%) Social assistance (%) Social insurance (%) Social care services (%) Source: World Bank SPEED Database (2021). Note: *** Simple arithmetic average of the total social protection spending (%) among the six Western Balkans countries on the chart: Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia. Information for Bosnia and Herzegovina does not include all social insurance expenditures. SVK, BGR and ROU refer to Slovakia, Bulgaria and Romania, respectively. Figure 5: Composition of government spending on social protection program in Kosovo, 2008-2020 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Basic old-age pensions War-related schemes (excl. veteran pensions) Disability pensions Ex-contributory pensions War veteran pensions Special pensions Social Assistance Scheme Other social assistance programs Labor market Source: Ministry of Labor and Social Welfare (2020) and Paun Jarallah et al. (2019). Note: Data on labor market spending are only available for 2017 and 2018. Back to table of contents 8 Western Balkans Social Protection Situational Analyses KOSOVO Cash transfers to support the poor, the vulnerable and persons with disabilities Though government spending on cash transfers in Kosovo is high, there is ample room to improve the impact on poverty, equity, and human capital, as well as the sustainability of spending. Social assistance spending is skewed toward cash transfers that are unrelated to poverty, making the social protection system unbalanced. There is scope for improvement in reaching the poor, through the removal of its stringent categorical eligibility criteria that exclude families with children as well as the working poor and disincentivize work among beneficiaries. Removing these criteria would then allow the SAS to also expand its coverage. Coverage of disability benefits is inadequate and inequitable. Finally, a social registry is not in place and the current management information system warrants strengthening. Cash transfers are not balanced, effective or Old-age pensions make up the majority of cash equitable in Kosovo. Although spending is high transfers to the population. Basic and ex-contrib- compared to other Western Balkan countries, utory pensions made up 56 percent of government over 90 percent of spending on cash transfers spending on cash transfers in 2019, with special is allocated toward old-age (non-contributory) pensions10 making up an additional 3 percent basic pensions, war veterans and other war-re- (Figure 6).11 Unlike in most countries, the basic lated pensions, and disability pensions (Figure 6). pension has universal coverage, covering both poor In contrast, transfers targeted towards the poor and non-poor elderly (above age 65) alike.12 Details (Social Assistance Scheme (SAS), made up only 0.45 on coverage, adequacy and sustainability of basic percent of GDP, or about 7 percent of total cash and ex-contributory pensions are discussed in the transfers. As a result, cash transfers in Kosovo are pensions section below to present a full picture of not only unbalanced but also inequitable. support to older people. War veterans’ and war-re- lated pensions made up 26 percent of government Figure 6: Composition of spending on cash spending on cash transfers in 2019 (Figure 6), are transfers in Kosovo, 2019 (% of GDP) also not designed to cover the poor. The number 1% of groups claiming compensation from the war 7% 7% continues to grow, raising concerns about the fiscal sustainability of pensions; most recently, a benefit was introduced for victims of sexual violence as well as a new pension for people who served as teachers 26% in the 1990s. While some war-related pensions may be warranted given the consequences of the war, they tend to be more generous than the SAS even though their objective is not to alleviate poverty. For example, the scheme for War Veterans of the Kosovo 56% Liberation Army (KLA) pays a monthly amount of 3% EUR 170, equivalent to the minimum wage and more than double the average payment received by SAS families.13 Surviving spouses (and children up to Social Assistance Scheme Special pensions age 26) of martyrs, civilian and former Kosovo KLA Other social assistance War veterans and war-related war invalids, KLA members and civilians who disap- Basic and ex-contributory pensions peared in the war and war veterans are also eligible pensions Disability pensions for these benefits. The generosity of such payments Source: World Bank staff estimates based on national also raises concerns about possible disincentives for statistical data (2019). labor force participation. Note: The Social Assistance Scheme corresponds to last resort income support. Back to table of contents 9 10 Special pensions include early retirement benefits with different rules that apply to Trepca miners, Kosovo Protection Corps (KPC), and Kosovo Security Force (KSF), and pensions for people who served as teachers in the 1990s. 11 More detail on the adequacy, coverage, and sustainability of pensions is discussed in the pensions section. The tables in Annex 2 provide a general overview of the separate pension schemes in Kosovo. 12 As long as they are not receiving another pension. 13 See Annex 2 for a description of the different pension schemes in Kosovo, including eligibility conditions and benefit amounts. Western Balkans Social Protection Situational Analyses KOSOVO Spending on disability pensions has increased but The methodology for disability assessment of war is limited to those declared 100 percent disabled. A invalids is unknown, and, unlike in the case of disa- disability pension that is equal to the basic pension is bility pensions, there is no requirement for reassess- available to residents ages 15-64, but in order to be ment, further making the system inequitable. eligible, an individual must be declared 100 percent disabled;14 the number of beneficiaries in 2020 was Limited transfers are provided to families with approximately 19,000.15 There are also separate disabled children. The Ministry of Finance, Labor more generous government-funded pensions for and Transfers (MFLT) also provides monthly cash the blind (available since 2014, with almost 2,000 support (EUR 100) to permanently disabled children beneficiaries in 2020) and paraplegic/tetraplegic (aged 0-18 years who are completely incapacitated persons (available since 2018, with almost 3,000 for carrying out daily activities) and their families beneficiaries in 2020).16 Separate work inva- in recognition of their additional needs. Overall, lidity (for those declared 100 percent disabled these benefit schemes are small in size, and with as a result of work injury or illness) and survivors limited impact, making them inadequate and inef- (family) pensions were introduced in 2018. Family fective.17 The scheme for families with children with pensions are only selectively granted to some cate- permanent disability is considered to be discrimi- gories of surviving beneficiaries such as families of natory for children with disabilities, as it recognizes war-related pensioners and contributors to the old the entitlement to material compensation only for (former Yugoslav) system. In 2020, almost 4,000 a narrowly defined category of children who have individuals received the family pension, and about permanent and severe disabilities and excludes 80 received the work invalidity pension. In total, children with milder disabilities whose conditions disability pensions amounted to 7 percent of total could potentially improve if supported with cash spending on cash transfers in 2019 (Figure 6). Over benefits and with medical and social services. The the last decade, spending on disability pensions funding that is provided under different disability has increased from 0.28 percent of GDP in 2009 laws is modest. The payment of the scheme for to 0.5 percent in 2019; the increase is due to the families with children with disabilities 0-18 years old more generous pensions for the blind and for para- amounted to EUR 2,775,300 in 2019 (0.04 percent plegics and tetraplegics as well as an increase in of GDP), which is not sufficient for the needs of beneficiaries (from about 18,500 in 2009 to almost children with permanent disabilities. For 2020, the 24,000 in 2020). payment amounted to EUR 3,108,560. The current system is both inequitable and inade- Poverty-targeted social assistance in Kosovo quate in its coverage of disability risk, leaving the decreased as a share of social protection spending partially disabled at risk of poverty. Work-related nearly threefold between 2009 and 2019. Spending disability pensions only are awarded for 100 percent on the SAS fell by 8.4 percent in real terms and from medical disability and are set at the basic pension 0.69 to 0.45 percent of GDP between 2009 and (EUR 90 per month), and above the non-work-re- 2019; the number of SAS beneficiaries declined lated permanent disability (EUR 75 per month); at from over 40,000 to about 25,600 households 52 percent of the minimum wage, the amount is between 2005 and 2020. Spending on war-related inadequate to replace lost income. Partially disabled pensions rose from 0.48 to 1.67 percent of GDP workers are not entitled to any pension prior to the between 2009 and 2019 (mainly due to the intro- age of 65 even if they also lose the ability to work. duction of the war veterans’ pension in 2016); the On the other hand, eligibility for war-related disa- number of war-related beneficiaries (who tend not bility pensions starts with 20 percent disability levels to be poor)18 increased from 12,000 to 52,000 indi- and at higher benefit levels that range between 1.5 viduals between 2009 and 2020.19,20 Over the last and 6 times the benefit available to fully disabled decade, increases in spending on more generous people outside these schemes, making the system categorical programs have crowded out spending inequitable. The disability assessment system for on the SAS. pensions, social assistance, and students follows the standard medical methodology, maintained by the health system; this methodology is outdated, as it does not include functionality elements, likely to leading inefficiencies in achieving the desired results of benefiting only those who are disabled. Back to table of contents 10 14 The severity of the disability is determined by the Medical Commission of the MLSW, with reference to the notion of ability to work, with a recurrent re-assessment after 1, 3 or 5 years—with the exact periodicity for each individual case being decided by the Medical Commission. 15 Children under 18 are covered by a separate benefit. Disabled individuals over 65 years of age become eligible for the basic pension. 16 Based on Law No. 04/L-092 on visually impaired persons and Law no. 05 / L -067 on the status and rights of paraplegic and quadriplegic people. Individuals who receive these more generous pensions are not eligible for the disability pension. 17 In 2019, 3,013 children with permanent disability received financial support; in 2020, their number was 2,436. 18 Though the Household Budget Survey does not capture the totality of war-related pension beneficiaries, 2017 survey data do show most households that reported receiving these benefits were not poor. 19 A total of eleven schemes are included, as defined by Law No. 04/L-054 on the Status and the Rights of the Martyrs, Invalids, Veterans, Members of Kosovo Liberation Army, Sexual Violence Victims of the War, Civilian Victims and Their Families; Law No. 04/L-172 on Amending Law No. 04/L-054. 20 Source: Ministry of Finance, Labor and Transfers. Western Balkans Social Protection Situational Analyses KOSOVO Most countries have several poverty-targeted Figure 7: Spending on last resort income support programs. While spending on the SAS is high in in select countries, 2016-2019 (% of GDP) comparison to other Western Balkan countries, 0.50% Kosovo’s LRIS is the only program aiming to reach 0.45% 0.45% the poor. LRIS spending in Kosovo fell from 19 0.40% percent of total social protection spending in 2009 0.35% to 6.7 percent in 2019. 0.32% 0.30% 0.26% The SAS’s incidence does not correspond to the 0.25% 0.24% 0.25% 0.21% country’s poverty profile. Only about 7 percent 0.20% of the total population benefits from the SAS, 0.15% whereas the official national poverty rate is closer 0.10% 0.10% to 20 percent. Only about one in four people in the 0.05% bottom quintile receive the SAS (Figure 8, panel a). 0.00% Recent diagnostics of SAS design and implementa- WB6 ALB 20 BIH 16 MNE 17 MKD 19 SRB 20 KSV 19 tion reveal explicit disincentives and administrative Source: World Bank staff estimates based on national statistical data restrictions to labor market participation, especially (2021). for women (World Bank, 2019b). Note: WB6 is a simple average of the six Western Balkan countries. The SAS beneficiary eligibility, verification and Figure 8: Coverage and benefit incidence of social recertification process are overly narrow, negating assistance in select countries, bottom quintile, poverty reduction. Currently, households must fall 2016-2018 into one of two eligibility categories: Category I, a. Coverage of bottom quintile, percent which requires that all adults be ‘dependent’ (not 35% 31,9% 31,5% required to work), or Category II, in which one adult 30% may be registered as unemployed and caring for a 26,2% child under five years of age or an orphan under 15 25% 22,9% years of age.21 Households falling into these cate- 20,0% 20% gories then must pass a means test and a verifica- 17,3% tion of assets and living conditions. The verification 15% of assets and living conditions is conducted through home visits, potentially introducing the discretion of 10% social workers. Approved households must recertify 5% every 12 months for Category I and every 6 months for Category II.22 Such restrictive conditions exclude 0% MNE ALB MKD KSV SRB BIH the working poor and may create incentives to 2015 2018 2016 2017 2018 2015 work informally and/or to obtain disability status to maintain eligibility for the scheme. b. Benefit incidence, percent 90% SAS eligibility criteria are not data-driven. For 80% 74,7% 76,6% 77,1% 73,5% example, the SAS Category II criterion that the 70% 61,5% youngest child be younger than five years results 60% in the exclusion of poor families with school-age 52,3% 50% children. The use of this criterion for eligibility is unique to Kosovo and has not been supported by 40% research. Its choice seems counterintuitive as there 30% is no reason to believe that these households will 20% escape poverty once their children turn five years 10% of age. On the contrary, poverty incidence among 0% households increases with number of children MKD BIH SRB KSV MNE ALB in the household, regardless of age. The benefit 2016 2015 2018 2017 2015 2018 Source: World Bank SPEED database (2016-2018). amount also applies very stringent economies of Notes: Non-contributory basic pensions and war-related pensions scale, meaning that larger families are not suffi- not included. Figures for Kosovo represent the SAS program. Bottom quintile refers to the bottom quintile for consumption per capita. Benefit ciently compensated for their needs. Furthermore, incidence refers to the percentage of total benefits accruing to the bottom quintile. Back to table of contents 11 21 Category I – all family members are dependent and none are employed. Families apply because one or more family members is/are permanently and severely disabled, requiring dependents to have a Medical Commission review such members’ health status. Family members are considered dependent if they are: (i) persons over 18 years of age with permanent and severe disabilities rendering them unable to work, (ii) persons 65 years of age and older, (iii) full-time caregivers of person(s) or of children under the age of five, (iv) persons up to 14 years of age, (v) persons between the age of 15 and 18 years (inclusive) who are in full-time education, and (vi) single parents with at least one child under the age of 15. Category II - families can have one family member who is able to work but must be registered as unemployed with the Employment Office. All other family members must be dependent. In addition, the family must be parenting at least one child under the age of five years or providing permanent care for an orphan under the age of 15 years. Applicants must also pass a poverty (means) test that assigns scores based on sources of income, household composition, ownership of certain type of assets and observable living/housing characteristics (Law No. 2003/15 on the Social Assistance Scheme and Law No. 04/L-096 on Amending and Supplementing the Law No. 2003/15 on the Social Assistance Scheme). 22 Additionally, the MLSW cross-checks the formal income reported by beneficiary households to the Tax Authority on a monthly basis and, if above the threshold for eligibly, households have exited from the program. Western Balkans Social Protection Situational Analyses KOSOVO under Category I, once a child turns 19 years of age, Plans for reform of the SAS the family loses eligibility even if he/she is still in education; in other countries, students ages 19-24 The Ministry of Finance, Labor and Transfers (MLFT) are often exempt from work requirements in order is seeking to reform the SAS. It plans to do so by to receive social benefits. removing the categorical criteria for beneficiary identification, introducing a new poverty test (a The SAS’s poverty headcount reduction impact comprehensive means test and a new proxy means has been modest. In 2017, three-quarters of SAS test) and a new equivalence scale to determine benefits reached the bottom quintile of the distribu- a more appropriate benefit amount for larger tion for consumption, placing its targeting perfor- families with children. Simulations based on 2017 mance among the best in the Western Balkans HBS data show that if this reform is implemented (Figure 8, panel b) and in Europe and Central Asia. and the total value of benefits distributed to SAS Yet, importantly, relatively accurate targeting is due beneficiaries remains unchanged, poor beneficiaries to low coverage and restrictive categorical criteria would be identified with greater precision, and, rather than to adequate beneficiary identification. more importantly, the number of poor families with children would increase by 25 percent (World Bank, 2019c). Such reform would be the most viable and SAS adequacy economic option for tackling child poverty in Kosovo, as opposed to a stand-alone child benefit scheme The SAS benefit is a flat rate that increases with or a child supplement to the SAS in its current form family size but slowly and, as a result, as noted (ibid). Eliminating categorical targeting would also above, covers a lower share of the consumption remove the poverty traps that many beneficiaries needs of larger families compared with smaller currently face. ones. The benefit amount currently ranges from EUR 60 for a one-member family to EUR 180 for a There is no formal mechanism to refer SAS family/household of 15 members. Indexation of the beneficiaries to social services or other much- benefit is ad hoc and discretionary despite existing needed health and education services. Though legal rules. Although there has not been any formal policy actions have been taken to coordinate inflation indexation of the SAS benefit, discretionary social assistance programs in general, coordination increases of the benefit amount have more than between benefits and services is still weak. SAS offset benefit erosion and led to an increase in the recipients have yet to receive adequate social real value of SAS. and employment services to overcome barriers to employment and to find jobs for poverty exit. The adequacy of social assistance in Kosovo is above most countries in Europe and Central Asia. The government has made progress with its During 2017, the average beneficiary household management information systems (MIS) but received over EUR 1,000 or about EUR 83 per month lacks a integrated beneficiary registry. There are (according to the HBS 2017), and on average, the automated exchanges of information between the benefit amount represented 39 percent of the total SAS MIS, other social benefits, the tax authority consumption of beneficiaries in the first quintile for and the public employment service labor database consumption. Yet, the average SAS benefit amount to cross-check the beneficiaries. The MFLT has is below that of the basic pension (EUR 90 per in place MISs for all of its programs; however, month) and less than 50 percent of the minimum this information has not been consolidated into wage (EUR 170 per month). Additionally, households an integrated beneficiary registry. Further, while enrolled under Category I must have their eligibility transfers for the SAS are made through banks, reassessed every 12 months, whereas Category II payments are made in cash at the post office. This households must be reassessed every six months,23 suggests scope for greater use of digital payment thereby undermining the security of this support to mechanisms to promote financial inclusion and to beneficiaries, while also increasing administrative reduce error, fraud and corruption. burden on caseworkers. The SAS is also a gateway for other in-kind benefits and associated rights for its recipients, including energy subsidies. Back to table of contents 12 Additionally, the MLSW cross-checks the formal income reported by beneficiary households to the Tax Authority on a monthly basis and, if above the threshold for eligibly, 23 households have exited from the program. Western Balkans Social Protection Situational Analyses KOSOVO Social services Funding for social services is limited, and the delivery of social services could benefit from the establish- ment of a referral system or case management to better ensure the coordination with social benefits and other basic services (particularly health and education) and better training of social workers. This would shift social services from reacting to vulnerabilities to preventing them, and also improve the contribution of the social protection system to building human capital. Social services in Kosovo are regulated by Law No. Directorate for Health and Social Welfare and 02/L-17 on Social and Family Services and Law No. delivered by the municipality through a CSW. The 04/L-081 on Amending and Supplementing Law CSWs provide direct services such as counselling No. 02/L-017. The legal provisions cover the types or guardianship and also arrange for community- of social services that can be provided and their based services, daycare centers or residential care target groups. They also cover the roles and respon- by partnering with other institutions. In practice, sibilities of institutions, such as the MFLT, municipal- not all competencies within the legal framework ities and Centers for Social Work (CSWs), in planning, for decentralization were transferred. The MFLT managing, providing and financing services as well Department of Social and Family Policies retained as guiding their relations with non-governmental the authority to determine where, how and by service providers. The MFLT is responsible for policy whom social services would be delivered as well as and regulatory issues; it has overall responsibility for the direct administration and supervision of certain organizing the provision of social and family services. social services providers.24 The decentralization A concept document to compile a new Draft Law on process also did not address a number of fiscal and Social and Family Services to address these issues is infrastructure aspects; for example, the municipal currently under revision. services infrastructure was not assessed for meeting the needs of decentralized service provision. Social services include direct social care, coun- seling and, in exceptional circumstances, material assistance to people in need. Direct social care Financing includes the provision of help with domestic duties, personal care, mobility, communications or supervi- Expenditures on social services are disproportion- sion and can be provided in a person’s own home, ately low. In 2019, Kosovo spent 0.05 percent of in a specialist day center or in a residential home. GDP on social services versus 0.45 percent spent Counseling refers to a systematic and programmed on the SAS and 6.25 percent spent on other cash process of providing information, advice and transfers. Social services are financed through guidance aimed at helping an individual or a family a general grant/transfer from the MFLT to each to improve their social or interpersonal circum- municipality. On average, more than half of this stances. Material assistance means provision of transfer is directed to the SAS and the CSWs, which money, temporary shelter, food, clothing, medical administer the scheme. In theory, the remaining fees, or other material necessity for which there resources should finance a minimum package of is an urgent need and for which there is no other interventions for individuals and families at risk. In available source. Approximately 12,139 individuals practice, the resources are not earmarked for this benefited from social services in 2019. purpose, raising concerns regarding adequate and equitable service delivery across municipalities.25 The theory and practice of decentralized social The MFLT has proposed social services transfer services are asymmetric. As of January 2009, social be earmarked similarly to the grants that finance services were transferred to the municipalities. In municipal health and education services.26 theory, the services are managed by the municipal Back to table of contents 13 24 Namely, the House of Elderly Persons in Pristina and the Special Institute of Shtime/Štimlje that care for the elderly. 25 There are budget lines for staff-related expenditures, equipment, goods and services, but not for professional social services. 26 The Concept Paper on Social and Family Services advocates for changing the financing model for social services. Financing through a specific grant is proposed in the new draft Law on Social and Family Services. Western Balkans Social Protection Situational Analyses KOSOVO Provision and delivery of social Work SAS Division and beyond the social protec- services tion system to health and education services, for example) to assess the needs of the beneficiary and The Division of Social Services in the CSWs also the beneficiary’s family and, where necessary, are the main service providers in Kosovo. In regulate, coordinate, monitor, assess and advocate addition, enterprises, voluntary organizations and for an inclusive service package to maximize options associations, faith-based organizations, self-help for social support and positive impact on bene- groups and other local, national and international ficiary(es). Management information systems are nongovernmental organizations (NGOs) or also not equipped for case management, as they individuals can provide social and family services. are organized by type of single benefit. Lastly, They can provide the services on their own initiative there are no linkages between social benefits. For or, under contract, on behalf of the municipal example, social workers who conduct home visits Directorate for Health and Social Welfare in the case to determine SAS eligibility are not expected to of local services or the MFLT Department of Social seek information or record observations (such as, and Family Policy in the case of national services. evidence of mental disability, untreated health NGOs must register with the appropriate authority problems, or presence of children with learning disa- as service providers, be licensed by the Department bilities) beyond the questions in the SAS form and of Social and Family Policy and adhere to the to subsequently make a referral to services. Being regulations, directives and procedures relating to largely informal, referrals are not mandatory and their activities as laid down by the MFLT. The MFLT depend on the initiative, discretionary judgment, can take over the provision of social services if the good will and professionalism of CSW staff. respective CSW fails to do so. Most social services tend to be responsive rather than proactive. Typically, municipal residents approach the CSW and apply for a specific service promoted through the media, community or other outreach methods. They also may turn to the CSW with a general inquiry about getting help with benefits and/or services and the CSW staff suggests what program or service they should apply for. It is possible to open a new case27 at this stage, assign a case manager and plan for a home visit. Alter- natively, access to services can be initiated and promoted by central or local institutions, commu- nities or NGOs. The CSWs also conduct outreach activities to inform communities about available services and to identify persons and families in need of them. However, most services provided by the CSWs seem to respond to referrals from the police or judiciary. Referrals and case management Case management and referrals are limited. Most social services target a single family member and do not take a comprehensive approach toward addressing all key risks and vulnerabilities that are present in a family and reinforce one another. Case management is needed as a method of social service provision, to provide a platform for social service workers to cooperate with others (within the Social Services Division, with the Center for Social Back to table of contents 14 27 A social services case is an instance of risk and vulnerability at the individual, family of group level (as specified in the Law on Social and Family Services) that is brought to the attention of or identified by the CSW, for which an official record is made (file is opened) and a case manager is assigned. Western Balkans Social Protection Situational Analyses KOSOVO Pensions Kosovo has universal pension coverage. However, the pension system is highly fragmented, leading to large inequities across the non-contributory pensions (basic, ex-contributory, special, war veteran and other war-related pensions). Only about a third of the working-age population contributes to the second pillar, and contributory pensions only provide temporary support until the account is depleted. Disability and survivor pensions are, for the most part, inadequate. The proliferation of categorical pension benefits over the years raises concerns regarding sustainability. Coverage Kosovo’s pension system has universal coverage. bution pension, which was established in 2002, is Non-contributory, government-financed pensions fully funded through mandatory contributions by include a universal, tax-financed basic pension (or employers and employees and is managed by an old-age pension) payable to all permanent residents independent public entity (Kosovo Pensions Savings of Kosovo age of 65 years and older, with incremen- Trust, KPST).30,31 tal basic pension levels for those who contributed at least 15 years to the former Yugoslav pension Pension coverage does not align with the low share system prior to 1999. Separate early retirement ben- of society contributing into the pension system. In efits with different rules apply to Trepça Company, December 2020, the basic pension reached 142,280 Kosovo Protection Corps, Kosovo Security Force individuals and the incremental basic pension based and war veterans pensions.28 Further, a multitude on former Yugoslav service reached 49,451 individ- of war-related pensions cover civilians and soldiers uals. This represents more than 100 percent of the who became disabled during the 1998-99 military population ages 65+.32 On the other hand, only 32 conflict and protect the surviving relatives of fallen percent of the population aged 15-65 are actively soldiers and civilians as well as the families of those contributing to the pension system, a reflection of missing.29 There are also government-financed dis- low labor force participation and high informality ability and survivors pensions (discussed in the cash rates. transfers section above). Finally, a defined contri- Table 3: Pension parameters in Kosovo Retirement age 65 years for men and women. From Kosovo Pensions Savings Trust (KPST): • If balance < EUR 3,000, a lump sum is paid. • If EUR 3,000 < balance < EUR 20,000, the pension is EUR 200 per month until Pension calculation account depletion. • If balance > EUR 20,000, the pension is 1% of balance until account depletion. • Additionally, if qualified, a basic pension of EUR 90 or ex-contributory benefit of EUR 182-265. Indexation post-retirement None. Age 18-65; Ministry of Finance, Labor and Transfers (MFLT) certifies disability. Eligibility for disability pension No minimum contribution. From KPST: Full account withdrawal. Level of disability pension From MFLT: EUR 90 for permanent disability related to work; EUR 75 for a permanent disability unrelated to work. Eligibility for survivor pension From KPST: Death before pension withdrawals, legal beneficiaries inherit the balance. Level of survivor pension Full balance paid in lump sum. Contribution rates 10% of gross salary: 5% by the employer and 5% by the employee. Source: Authors (2021). Back to table of contents 15 28 As defined by Law No. 04/L-261 on Kosovo Liberation Army War Veterans. 29 A total of 11 schemes are included, as defined by Law No. 04/L-054 on the Status and the Rights of the Martyrs, Invalids, Veterans, Members of Kosovo Liberation Army, Sexual Violence Victims of the War, Civilian Victims and Their Families; Law No. 04/L-172 on Amending Law No. 04/L-054. 30 Employers and employees must each contribute 5 percent of wages, for a total contribution of 10 percent; they can both also contribute up to a total combined 15 percent on a voluntary basis. 31 For an overview of the different pension schemes in Kosovo, see Annex 2. 32 According to the Kosovo Statistical Agency, in 2020, there were approximately 160,000 individuals ages 65+ in Kosovo. This largely corresponds to the number of basic and ex-contributory pension recipients of ethnic Albanian background. The reason for the discrepancy is census-population estimates exclude the share of the Serbian population who receive Kosovo pension benefits. Western Balkans Social Protection Situational Analyses KOSOVO Adequacy Benefit adequacy for current retirees varies retirement until account depletion. The pension of depends on the category. All permanent residents EUR 200 per month provided by the contributory age 65 years and older are eligible to receive system in Kosovo aligns with what other systems EUR 90 per month from the basic pension. If the in the Western Balkans provide in terms of average residents contributed for at least 15 years to the benefits with respect to average gross wages, former Yugoslav system, they will instead receive albeit in the case of Kosovo this is not a lifetime between EUR 182 and EUR 265, depending on their benefit. This benefit is equivalent to 38.5 percent of education level. If they contributed to the second average gross wages, higher than the benefit ratios pillar fully funded pension and have an account observed in Bosnia and Montenegro but lower than balance of between EUR 3,000 and EUR 20,000 at the ones observed in Albania, North Macedonia or the time of retirement, they are also eligible for EUR Serbia (Figure 9). If the universal basic pension of 200 per month until the account is depleted. If their EUR 90 per month (which is a lifetime benefit) is account balance is greater than EUR 20,000, their included, benefit generosity in Kosovo improves in pension is calculated at 1 percent of their balance at relative terms. Figure 9: Ratio of average pension to average gross wages in select countries, 2016 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% IE SE ES FI IT EL RO U E LV LT SI L T PT O K EA B SK LU EE KD CZ K PL AT BG B E BE s CY R FR RS 27 D V N M D N U D AL SR H H EA N KS FE EU M M H H BI BI Source: European Union (EU) Aging Report 2018, PAYG pension agencies in Western Balkans countries and KPST. Note: BIH RS refers to the Republic of Srpska and BiH FED to the Federation of Bosnia and Herzegovina. There are wide discrepancies in benefit adequacy, more when including war-related pensions. There as consequence of a highly fragmented system. are also important gender disparities: women age Unlike in other European countries, the basic 65 years and older predominantly receive only the pension is not a social pension for the poor and basic pension, whereas a relatively high share of men is paid to all residents ages 65 and over regard- receive the higher ex-contributory benefit (Feher et less of whether they are also receiving a contribu- al., 2016). Women’s lower labor force participation tory pension, including from a foreign country. For directly affects their ability to qualify for the ex-con- instance, a retiree who relies solely on the basic tributory pension. pension will receive a benefit that is equal to 52 percent of the minimum wage33 and 16 percent of The law on cost-of-living adjustment to benefits the average monthly wage; another retiree who introduces uncertainty. In principle, all benefit receives the maximum ex-contributory benefit and amounts should be adjusted for cost of living. In has accumulated savings in the new system might actuality, such adjustments have occurred on an receive a benefit that is 83 percent of the average ad-hoc basis. The law allows for flexibility in accord- monthly wage. Some households might receive even ance with fiscal space (Feher et al., 2016). Back to table of contents 16 33 In 2021, the minimum wage for workers 35-65 years of age was EUR 170 per month. Western Balkans Social Protection Situational Analyses KOSOVO Expenditures and sustainability Sustainability is a concern for the Kosovo pensions you-go (PAYG) contributions). At the end of 2018, system. The fiscal cost of pensions (general there were 7.83 active contributors for each indi- budget-financed and war-related pensions) more vidual that had retired from the system. This number than doubled between 2008 and 2019, from around is close to the overall ratio of eight inhabitants ages 2.7 to 5.7 percent. This is due to the expanded 15-64 years for each inhabitant 65 years and older generosity of existing pensions and the introduc- observed in the general population. Yet, there are tion of new pension benefits that are fully funded two country-specific considerations: this system by the government. The ex-contributory pension was established only in 2002, and a demographic has increased steadily, with a 2016 provision to transition will rapidly age the country. By 2026, six increase benefits based on education level. The cost individuals of working age are estimated for every of this program reached 1.7 percent of GDP in 2019. person 65 years and older, falling to four by 2038 In 2020, the financial burden compounded with the and to three by 2047. pandemic-induced drop in GDP. The contributory pension system is still in its accu- The continuous introduction of new categorical mulation phase. The system is less than 20 years benefits threatens the predictability and security old, which is a very short time frame for a pension of the pension system. The pensions, which are system. It is expected that, as the system matures, largely government financed, are not data driven, accumulation in individual accounts and resulting thus exposed to outside bias. There are initia- benefits will increase. Currently, pension fund accu- tives to introduce special rules for early retirement mulation represents 26 percent of Kosovo’s GDP, and for benefit levels of police forces and artists. but this figure is projected to increase to levels of 66 Similarly, there have been initiatives to expand the percent of GDP by 2050. However, the 10 percent ex-contributory pension benefits to individuals with contribution rate may not be enough to finance less than 15 years of service. This runs contrary to sufficient lifetime benefits if individuals do not sound principles of pension system design and is contribute for a substantial portion of their working not compatible with other segments of the pension lives and if the retirement age is not adjusted system. upward with increased life expectancy. The fully funded contributory system has rela- tively complete legal foundations and govern- ance appears to be functioning well. However, it pays fixed amounts until the account is depleted, thus fulfilling its income replacement function only temporarily.34 The system would benefit from a mechanism to provide annuities or scheduled withdrawals, as people will soon begin retiring with almost 15 years of contributions in the savings system. The government has prepared a concept document for pension reform to establish a single legal framework for pensions. The key objectives of the reform are the establishment of a more equitable and sustainable pension system with convergence of privileged and special pensions toward the general public; improvement of the currently inad- equate disability and survivors’ pensions; and intro- duction of an additional old-age insurance level for contributory pensions. In the future, Kosovo will be hard-pressed to finance meaningful pension benefits for its elderly population if it relies extensively on intergenera- tional transfers (for example, taxation and pay-as- Back to table of contents 17 34 Feher et al. (2016) note that given average account balances at retirement, the mandatory contributory pension scheme can provide an income stream for a period of only 2.5 to 3.5 years on average, depending on net returns realized during the payout phase. Western Balkans Social Protection Situational Analyses KOSOVO Employment and labor market policies Kosovo spends little on employment and labor market policies. The Employment Agency of the Republic of Kosovo, the main coordinator of labor market policies and public employment services, has limited capacity, and the services provided do not meet the needs of the population. Maternity benefits are particularly generous and may discourage the employment of women, whereas unemployment benefits do not exist. The Employment Agency of the Republic of Kosovo pendent nongovernmental organizations. Private (EARK) is the main coordinator of active labor companies (for which little information is available) market policies and public employment services. constituted 24 percent of the employment service The provision of services largely depends on provision (Hempel et al., 2019). funding by international organizations, non-gov- ernmental organizations and bilateral donors. A The budget allocated to the EARK has increased in significant share of the EARK’s budget stems from recent years, from 0.09 to 0.15 percent of GDP (or, donor funding, such as the European Union, United from EUR 5.59 million to EUR 10.55 million) in 2017 Nations Development Program and GIZ (Deutsche and 2019, respectively. This is low in comparison to Gesellschaft für Internationale Zusammenarbeit). most Western Balkan countries and to the EU-27 While no public figures are available, an assessment average, though comparable to Albania (Figure 10). funded by EuropeAid estimates around EUR 4.28 No increases in the EARK’s expenditures have been million in donor funds supported the EARK in 2019 noted for 2020, despite the increased number of (Paun Jarallah et al., 2019). Donors also implement unemployed as a result of the pandemic. Emergency activities independent of the EARK (for example, measures such as additional wage subsidies were GIZ and Swiss Agency for Development and Coop- financed directly by the MFLT. The revised budget eration) and numerous non-public providers deliver of 2020 indicated a EUR 2.8 million reduction in active labor market programs (ALMPs). Most EARK expenditures, raising concerns regarding the non-public providers are small-scale, donor-de- adequacy and quality of service provisions. Figure 10: Expenditure on labor market policies in Kosovo, 2018 (% of GDP) 1.4% Total LMP (incl. administration, placement and related services) 1.19% 1.2% Expenditures (% of GDP) Active LMP (including Vocational Training) 1.0% Passive LMP (unemployment benefits) 0.8% 0.65% 0.6% 0.48% 0.43% 0.42% 0.4% 0.36% 0.2% 0.10% 0.08% 0.0% EU-27 7STEE Montenegro BiH Macedonia Serbia Kosovo Albania (2019) Sources: EU-27/7STEE: Eurostat, accessed 2021; Macedonia: Administrative Data received in 2021; Kosovo: Paun Jarralah et al. 2019; Albania: Administrative Data NAES received in 2021. Note: 7STEE refers to the seven small transition economies of Europe: Bulgaria, Croatia, Estonia, Latvia, Lithuania, Slovak Republic and Slovenia. Back to table of contents 18 Western Balkans Social Protection Situational Analyses KOSOVO The EARK has a weak centralized organizational of registered unemployed were beneficiaries of structure, leading to ineffective implementation ALMPs provided by the EARK in 2019, most of of ALMPs (Paun Jarallah et al., 2019). The agency which attended vocational training. More than half is not only constrained by its low number of coun- of all ALMP beneficiaries enrolled in vocational sellors and their high caseload,35 but also by its lack training, which is conducted in eight vocational of specialized counseling for important or particu- training centers. An enrollee can be trained in one larly vulnerable groups, such as youth, women and of 30 different professions for three to six months long-term unemployed. While the government (GIZ, 2019b). But despite an increase in the number has recognized the role of non-public providers in of beneficiaries from 4,055 in 2015 to 6,603 in 2019, expanding and improving the delivery of employ- the budget for vocational training has remained ment support services, it has yet to operation- relatively constant. alize these partnerships and must first determine the areas for which partnership could be of added Process evaluations conducted by donors indicate value, by reflecting on its own institutional capacity. that vocational trainings do not match the labor In Europe, it has become common practice for market’s demand for skills. Additionally, many public employment agencies to engage in part- beneficiaries were employed shortly before starting nerships with non-public providers to improve their ALMP and the geographic distribution of coverage, quality and efficiency, as the complexity service provision is disproportional to the number of the labor market is increasing. Both cooperating of registered unemployed (INDEP, 2019). Trainings with and contracting out to non-public authorities offered at vocational training centers are limited and nongovernmental organizations could increase to basic levels, mostly provided by long-time civil coverage and improve the quality of EARK’s service servants and, hence, often do not provide training provisions. Kosovo has a significant number of according to the labor market demands for youth non-public providers; most are nongovernmental (Paun Jarallah et al., 2019). organizations delivering programs focused on entrepreneurship or skills training and they have An internship scheme targets young, well-educated experience serving disadvantaged groups, such as jobseekers, with support recently increasing. In youth, women, ethnic populations and persons with 2019, there were 2,705 beneficiaries of the program. disabilities (Hempel et al., 2019). Overall, 36 percent of interns were retained by the employer following the internship (GIZ, 2019a). In 2019, the number of jobseekers registered with Lastly, 420 jobseekers benefitted from on-the-job the EARK represented only about 57 percent of the training in 2019 for which the retention rate is unemployed in Kosovo.36 A steep increase in the significantly lower at 26 percent, though 77 percent number of registered unemployed with the EARK of beneficiaries reported to have learned the skill occurred in 2020, from 70,790 in 2019 to 201,000 which they were tasked to acquire (GIZ, 2019a). in 2020. Much of this change is likely as a result of mandatory registration with employment offices as Unemployed jobseekers who have a high risk of an eligibility criterion for receiving social assistance becoming long-term unemployed are eligible for as part of the government’s emergency response wage subsidies as well as public works. In 2019, to the COVID-19 pandemic. In 2018, employment there were 445 beneficiaries of wage subsidies and offices registered 14,847 job vacancies and 6,764 2018, the most recent year where data is available, jobs were filled through mediation. The EARK’s 680 people were employed as part of the public high unemployed-to-counsellor ratio undermines works program. the quality of services provided. Counsellors at 38 local employment offices are responsible for regis- Two ALMPs support self-employment and tering jobseekers, mediating employment as well as promote entrepreneurship. The registered unem- providing guidance on career support and access ployed are eligible to submit a business plan in a to ALMPs. However, in a survey of unemployed given template, partake in a 40-hour entrepreneur- who had taken part in ALMPs of the EARK, only 48 ship training at a vocational training center, with percent of the participants responded that they had selected applicants receiving a startup grant of up received individual counseling prior to taking part in to EUR 6,000 and extended counselling. Entrepre- the program (GIZ, 2019a). neurs who co-finance at least 20 percent of their startup costs are more likely to be selected and the Training provided to the unemployed is often inad- maximum grant level is increased to EUR 10,000. equate and funding is limited. Around 16 percent In 2019, there were 214 beneficiaries of these Back to table of contents 19 35 With only 92 counsellors employed by the agency, the ratio in 2019 was 1,042 unemployed per counsellor, with that number having increased to 2,184:1 in 2020 due to a drastic increase in registered unemployed. European Public Employment Services average between 101 and 140 jobseekers per staff, differing along the responsibilities of the counsellor (European Commission, 2015). 36 According to data from the 2019 Labor Force Survey, 125,300 people of working age were estimated to have been unemployed. Western Balkans Social Protection Situational Analyses KOSOVO programs. The survival rates of businesses indicate ipants six months after completing the measure positive returns on investment. A majority of the to verify their labor market status, no system has businesses remain active, create jobs and report been put in place or relevant statistics dissem- profits in follow-up years, while most of those who inated (Hiebl et al., 2019). Some advances have did not receive financing do not set up the business been made toward the provision of reliable and to begin with (Kavanagh, 2017). accessible labor market information to stakeholders for evidence-based policy. An online job vacancy None of the EARK’s programs exclusively target analysis was carried out by the World Bank (Bran- youth, and the lack of youth-sensitive program- catelli et al., 2020), presenting raw labor market ming and counseling continues to pose significant data on the Kosovo Labor Market Barometer and barriers. Youth are one of the groups most affected guiding students in their education choices using by unemployment and in need of public employment such information through an award-winning online services. The EARK has set out a specific action plan platform.37 to target youth unemployment. Currently, three ALMPs target youth, namely: on-the-job training, The long duration of maternity leave and partial wage subsidies and an internship scheme. Yet, the employer liability for maternity pay could disincen- EARK continues to play a marginal role in youth job tivize hiring of women and reinforce the already search (MLSW, 2018). Possible remedies include low participation rate of women in employment. in-depth program diagnostics, co-operation with Since 2017, maternity benefits have been provided non-public providers and the recruitment and to 400-500 mothers per year. In 2019, govern- training of specialized staff (Hempel and Brodmann, ment expenditures reached EUR 1.8 million and 2020; World Bank, 2020a). the average monthly benefit amount was around EUR 280 or 165 percent of the minimum wage. The Women face constraints to participating in the 12-month maternity leave is well above the minimum labor mark and the EARK has the capacity to standard of the International Labor Organization address these constraints. Policies within the and the EU acquis (14 weeks/98 days).38 It is also scope of the EARK include introducing cross-cut- one of the longest durations in Europe, where the ting features in all of its activities; these have average duration among EU Member States is 22.5 been shown to improve program effectiveness, weeks (World Bank, 2019a). Further, other European such as flexible time schedules, gender-sensitive countries do not hold employers liable for part of the outreach or adding safe spaces for women, but costs. More than 40 percent of surveyed employers also program-specific aspects, such as emphasizing in Kosovo view women as costlier to hire than men on-the job training to expand social networks or (World Bank, 2017a). offering suitable work options for women in public works programs (Brodmann and Hempel, 2018). Lack of access to childcare is a significant barrier to women’s employment. Over 50 percent of inactive women cite personal or family obligations as their reason for not working outside the home, and more than 40 percent of employers contend that women have competing time demands because of family responsibilities (World Bank, 2017a). The relatively low utilization of formal childcare services is driven by the limited availability of affordable services, particularly outside of the capital Pristina and in rural areas, rather than by low demand (World Bank, 2017a). Deficiencies in monitoring and evaluation and the use of evidence base in the design and adapta- tion of ALMPs also undermine their effectiveness. Despite operation manuals mandating systematic monitoring and evaluation, such as tracing partic- Back to table of contents 20 37 See https://sitp.rks-gov.net/ for Kosovo Labor Market Barometer and ETF, “live & learn” Issue 44 p. 23 – June 2019 for an introduction to the online platform Busalla.com 38 An employed woman is entitled to nine months of paid and three months of unpaid maternity leave, where the employer pays six months at 70 percent of the base salary and the state pays three months at 50 percent of the average wage in Kosovo. Western Balkans Social Protection Situational Analyses KOSOVO Disaster preparedness and response: learning from the COVID-19 response The Government of Kosovo responded quickly to support households affected by the economic conse- quences of the COVID-19 pandemic. However, despite the existence of a range of social protection programs, the government was not able to expand their coverage; instead, the response tended to be vertical in nature, (that is, by increasing benefit amounts) and an emergency program, Measure 15, had to be designed and implemented. A number of the proposed reforms of the SAS would support the use of this program to respond to crises in the future, allowing for the response to be faster and more effective in covering the poor. The government responded quickly to the COVID-19 not harness the SAS to provide much-needed social pandemic, declaring a State of Emergency in assistance support to poor households and those mid-March 2020 and launching an Operational working in the informal sector. This was largely due Plan on Emergency Fiscal Package. The package to the strict categorical requirements (Category included a range of measures to enable the popu- I and II), which are largely based on household lation to comply with public health containment composition and do not change when a shock hits. measures.39 While these measures were put in place quickly, implementation often was undermined by The government was forced to launch a new the need to establish new programs to deliver the program in the midst of the COVID-19 pandemic. support to firms and households. The subsequent This new program, Measure 15, provided time- Economic Recovery Plan in June 2020 faced similar bound support to households with no formal implementation issues, with some measures only income or other form of social assistance.40 This fully implemented with the passages of the 2021 support was for a period of three months and ended national budget. The government’s social protec- in August 2020. No further support was provided tion response to COVID-19 is summarized below. to poor households not covered by the SAS. More importantly, because the time-bound benefit was directed only at households with no formal income, Cash transfers the working poor as well as households who may have fallen into poverty during the pandemic but At the onset of the COVID-19 pandemic in 2020, still received some formal income, were left unpro- the government ensured income security to some tected. Conversely, according to Household Budget of the poorest households through cash transfers. Survey estimates, 19.7 percent of households had In April, May and June 2021, the government no formal income in 2017; however, among such doubled the SAS amount for current beneficiaries households, 30 percent had consumption levels and suspended the age criterion (youngest child that placed them above the poverty line. Though being under five years of age) for current Category some of these households may have lost their live- I families. Beneficiaries who were due to reapply to lihoods as a result of the pandemic and been left the SAS were exempted in order to comply with unprotected, not accounting for their informal containment measures. The SAS amount was again income implies that some better-off households doubled in early 2021, subsequently increased by 30 may have received this emergency benefit. percent and doubled for November and December 2021. A dedicated application system was launched to rapidly implement Measure 15. It allowed people to The rigidity of the cash transfer system inhibited apply online, through email or in person at the CSWs. timely scale-up during the COVID-19 pandemic. As The application data were fully verified through people lost income and jobs due to the economic cross-checks with other government registries. This consequences of COVID-19, the government could system offers lessons on streamlining the applica- Back to table of contents 21 39 The Emergency Fiscal Package was adopted through a Decision of the Government on March 30, 2020. The Operational Plan was issued on April 3, 2020. 40 Such households also had to provide proof of registration as unemployed in the employment agency. Western Balkans Social Protection Situational Analyses KOSOVO tion process for the SAS and other cash transfer of account holders (or 344,000 contributors) had programs. The payment of cash benefits for the already applied for a withdrawal. SAS and Measure 15 through banks and the post office also suggests scope to reduce the payment Across the world, allowing for withdrawal from of cash in hand. mandatory pension schemes was not a common measure taken by governments in response to the Prior to the pandemic, the government had begun COVID-19 pandemic. Allowing for withdrawals from reformulating the SAS to measure household mandatory pension schemes during a crisis is not poverty status. The government planned to reform only regressive (since workers who contribute to the SAS eligibility criteria, to implement a hybrid pension schemes tend to be better off) but could targeting mechanism (means test and proxy means also carry high fiscal costs and negatively impact test) and to set a threshold score as the determinant future pensions. Kosovo is the only European of assistance. The scoring system facilitates trans- country that allowed for such withdrawals; other parent equity and homogeneity in beneficiary iden- countries allowing withdrawals include Australia, tification while reducing the administrative costs of Chile, Malaysia, Peru and several smaller countries using several beneficiary identification methods in in the East Asia and Pacific Region. However, in parallel. Australia, withdrawals were means tested: only those who suffered a reduction in working hours or a The lessons learned in developing and rolling out reduction in income from self-employment greater Measure 15 can inform an adaptive social safety than 20 percent were eligible to make a withdrawal. net. By eliminating the tight exclusion criteria, Withdrawals were also subject to taxes. moving to a poverty-centered measure and inte- grating a hybrid targeting approach, this cash transfer program gains the capacity to expand and Employment and ALMPs contract in response to crises and economic shocks. The timely payments through banks and post The government supported alternative labor offices exemplifies new ways of transferring the market programs to protect workers’ jobs and benefit and the system can be replicated for other support those who had lost employment. As of May social assistance programs, with thresholds varying 2020, over 170,000 workers had applied for salary according to available budgets or vulnerability level compensation, newly introduced unemployment of the target population. assistance and other social welfare measures included in the government’s response to the COVID-19 pandemic (OECD, 2020). The economic Pensions recovery program allocated EUR 67 million toward increasing employment, which included subsidizing The government introduced a menu of pension salaries for new formal employees as well as wage measures to support households during the subsidies of up to the minimum wage (EUR 170) COVID-19 pandemic. In March, April and May 2020, in March and April 2020 for employees working the government introduced a temporary pension in businesses affected by the pandemic. Firms increase by EUR 30 for pensions under EUR 101. registered a higher number of workers as newly In December 2020, it allowed for a 10 percent unemployed than as formal workers, suggesting the non-means-tested withdrawal for individuals support contributed to a formalization of employees contributing to mandatory pensions (KPST), up to (World Bank, 2020c). Additionally, to address the EUR 1,000, to help households cope with economic lack of unemployment insurance, all individuals who hardship due to the COVID-19 pandemic. Account lost their jobs were guaranteed monthly payments holders who have a balance below EUR 10,000 of EUR 130 from April to June 2020 and EUR 5 are eligible for reimbursement of withdrawals over million was provided to the Ministry of Culture, the next 10 years, from 2023 onwards. Around 91 Youth and Sports to, among others, support youth percent of savers would meet the threshold for employment.41 reimbursement. The ability to make withdrawals favors employees in public administration and public enterprises as well as higher-earning private- sector employees (KPST, 2020). By December 16, within five days of the announcement, 53 percent Back to table of contents 22 41 “The Government Approves the Plan for the Implementation of the Economic Recovery - Office of the Prime Minister,” accessed January 7, 2021, https://kryeministri-ks.net/en/ the-government-approves-the-plan-for-the-implementation-of-the-economic-recovery/. Western Balkans Social Protection Situational Analyses KOSOVO Reform priorities and knowledge gaps Government spending on social protection in inequitable. Disability pensions are only available Kosovo is high, yet the impact on poverty, equity for those who are declared 100 percent disabled, and human capital as well as on sustainability could leaving partially disabled individuals uncovered. be improved. Social protection spending, which is The process to assess and reassess disability is largely government funded, is skewed toward cash not systematic across programs and is outdated. transfers that are unrelated to poverty, making the In contrast, war-related or special pensions offer social protection system unbalanced. War veterans partial disability benefits, which also tend to be and war-related pensions crowd out poverty-tar- more generous and do not require periodic reas- geted programs and, given their high generosity, sessment. introduce inequities in the system; they also may disincentivize work by recipients and their family The government has invested in a management members. Further, the number of benefits has not information system (MIS) for social benefits. The only been increasing in recent years, they also cover information is not consolidated but rather housed surviving spouses, children and parents. In this way, in the multiple MISs in the Ministry of Finance, Labor they are expanding in terms of their timeframe and and Transfers. The current MIS warrants strength- the public expenditures require to finance them, ening and consolidation. A social registry is still not raising questions about their sustainability. The in place. government decision to allow the withdrawal of savings from mandatory pensions accounts as part Funding for social services is limited. The delivery of of the COVID-19 response underscores the need for social services could benefit from a referral or case a transparent, data-driven social protection system management system to better ensure coordination in Kosovo, supporting sustainability and equity. of social benefits and other basic services (particu- larly health and education) and to better train social The social protection system does not univer- workers. This would induce a cultural shift (and sally target or effectively reach the poor, not only cost savings), from reacting to vulnerabilities to in terms of expansion of coverage of the SAS but preventing them. It also would improve the contri- also the removal of its stringent categorical eligi- butions of the social protection system to building bility criteria that exclude families with children as human capital. well as the working poor and disincentivize work among beneficiaries. Implementing a new pover- The pension system is fragmented, with large ineq- ty-targeted instrument that considers observable uities in the non-contributory pensions. About a income through a means test and informal/unob- third of the working-age population contributes to servable income through a proxy means test could the nascent second pillar, but contributory pensions improve poverty targeting, better reflect the high provide support only until the account is depleted. rates of informality in the Kosovo labor market, and Disability and survivor pensions are, for the most serve as a tool for responding to future crises in a part, inadequate. Lastly, the proliferation of cate- timely manner. It also would serve as a foundation gorical pension benefits fully funded by govern- for targeting other benefits and services toward the ment over the years is increasing fiscal costs. poor, such as health insurance and energy subsidies. Such a reform would improve the coverage of the Labor market programs and trainings are not suffi- poor by cash transfers and improve the effective- ciently resourced or well matched to the market- ness of the social protection system in reducing place. To support employment and employability, poverty. resources going into ALMPs need to be increased, both for the Public Employment Agency but also Coverage of disability benefits is inadequate and to allow for partnerships with non-public providers. Back to table of contents 23 Western Balkans Social Protection Situational Analyses KOSOVO Programming decisions need to be based on infor- mation on labor markets and jobseeker characteris- tics, and rigorous monitoring and evaluation needs to be established and used for decision-making. Options for temporary financial support for those actively searching for jobs should be assessed. Kosovo lacks an adaptable social safety net. Despite the existence of a range of social protec- tion programs, the government could not quickly expand its coverage to people who were impacted by the COVID-19 pandemic. The reforms to the SAS proposed before the pandemic as well as the lessons learned in the pandemic would support the creation of an adaptable social safety net. One that can respond to economic events and crises. To be effective, however, this objective would need to be set out in legislation and supported by investments in the SAS delivery systems. Back to table of contents 24 Western Balkans Social Protection Situational Analyses KOSOVO Kosovo: Reform priorities Short term Medium term Long term Cash transfers to support disabled, poor and vulnerable groups eform targeting mechanism for • R ntroduce a social registry. • I educe spending on war-re- • R the Social Assistance Scheme (SAS) • I nvest in efficient government lated pensions and reallocate scheme for more efficient poverty delivery systems: human resources spending to the poverty-tar- targeting that can respond to crises geted SAS scheme. for social workers and case and modify the equivalence scale to compensate larger families. management systems. • M odernize delivery systems, • ssess disability pension adequacy A including the application and and expand coverage beyond 100 payment systems, and strengthen percent disability. outreach and communications. • ntroduce case management I to ensure effective support throughout life cycle. • ntroduce integrated benefi- I ciary registry drawing on existing management information system (MIS) data. • ntroduce incentives for work by I disregarding some income from employment in order to become eligible for benefits. Social services ntegrate the provision of social • I ntroduce accompanying services • I evelop a whole-of-govern- • D services and integrate social bene- such as community housing facili- ment approach to monitor and fits and social services: incorporate ties for the elderly and persons with support vulnerable children and regulations and procedures for disabilities. adults along the life cycle across referrals. social sectors. xpand the number of providers of • E • ntroduce a case management I child protection services and their model and improve coordination capacity. and referrals. • ncrease financing for service I delivery and human resources, including earmarked funds at the municipal level. • ncrease community outreach. I • ntroduce mechanisms to plan, I monitor, inspect and ensure service quality. Pensions edesign the basic pension to • R ssess disability pension adequacy • A ntroduce a new insurance • I provide a minimum floor and adjust and expand coverage to individuals pillar to finance benefits at downward for other sources of with less than 100 percent disa- an advanced age (after the pension income. bility. individual account pension is • E stablish an affluence test to • C onsolidate existing categorical exhausted), financed by an exclude the highest income quintile benefits as much as possible, additional contribution rate and from receiving the basic pension. especially disability benefits and managed by an independent war-related categories. entity (preferably the existing hase out ex-contributory bene- • P Kosovo Pension Savings Trust fits by linking their value to the ntroduce a mechanism for • I (KPST), to avoid an additional value of a self-financed pension providing annuities or scheduled institutional bur-den). in an inversely proportional way withdrawals for the second pillar. such that ex-contributory benefits rovide a predictable, sustain- • P decrease as accumulations in the able lifetime income stream individual account increase. financed within the system instead of on general budget financing. Back to table of contents 25 Western Balkans Social Protection Situational Analyses KOSOVO Short term Medium term Long term Employment and ALMPs trengthen the capacity of the • S eform the organizational structure • R repare and introduce tempo- • P Employment Agency of the of EARK. rary financial support for the Republic of Kosovo (EARK) by unemployed. ystematically base active labor • S hiring and training counsellors, market program (ALMP) decisions n line with the reform of the • I including for employer outreach, on labor market data and jobseeker Social Assistance Scheme (SAS), proactive case management and characteristics. implement activation strategy specialized support for vulnerable for social assistance benefi- groups. repare to outsource services and • P ciaries. programs to non-public providers enerate monitoring information • G with a view to increase coverage and disseminate the available data and quality. collected on ALMP beneficiaries’ outcomes and program-specific uild a range of youth-friendly • B budgets. ALMPs (e.g., work preparation training; demand-driven vocational pply performance indicators at • A training; wage subsidies, volun- EARK which can support internal teering and public works). decision-making and budget distri- butions. stablish targeted approaches and • E services for disadvantaged groups (e.g., women, long-term unem- ployed and Roma, Ashkali, Egyp- tian). Disaster preparedness and response ystematically assess the readi- • S uild an information system for • B ness of current social protection eligibility assessment and inte- programs for crisis response, grated beneficiary registry (social learning from COVID-19 response registry). and including a range/mix of flex- trengthen program informa- • S ible program rules and procedures; tion systems for enrollment and rapid outreach, assessment, enroll- payment. ment and payment; and robust processes and systems, among stablish disaster risk protocols. • E others. dentify financing mechanisms • I trengthen data and analysis • S (including reserve fund, budget (for example, conduct household reallocation). poverty and vulnerability analysis ap (internal/external) actors and • M for risk profiling). their responsibility for disaster et out the objectives of • S response and establish coordina- responding to crises through the tion mechanisms. SAS. Back to table of contents 26 Western Balkans Social Protection Situational Analyses KOSOVO Kosovo: Areas for further research/knowledge gaps Category Benefits and programs Cash transfers A new targeting system (combining a means test with a proxy means test): • Consolidate household data: HBS household composition differs substantially from applicant “households” raising questions as to the “losers” and “winners” and an appropriate threshold for the both the means test and the proxy means test. • Analyze EU-SILC survey data: Kosovo will begin using EU-SILC to calculate poverty. • System assessments: • Review outreach, intake and enrollment and identify gaps and inequalities to ensure hard-to-reach populations receive support. • Assess payment systems for SAS to promote innovation and financial inclusion. Disability benefits: • Harmonize and synchronize the disability assessment process, moving toward a functional assessment. • Ensure benefit adequacy according to level of disability. • Different programs for different types of disability? Social services Assess options to introduce a case management system. • Review human resources management systems for social workers. • Pensions Assess data availability for restoring or phasing out the ex-con- • tributory pension system. Explore options for introducing/strengthening the contributory • system. Analyze the long-term impacts and sustainability of proposed • reforms and options for consolidation. Employment and active labor Rigorously assess the effectiveness of ALMPs to promote employ- • market programs (ALMPs) ment, especially for vulnerable groups, and assess options to strengthen the design and delivery of ALMPs. Assess options to introduce unemployment benefits, noting high • levels of informality. Elaborate policy options to support firm and employment growth, • in particular those related to the business environment and firm management practices. Prepare strategies for partnering with the private sector to boost • skills development and increase efforts to promote work-based learning and career guidance for students in schools and universi- ties. Disaster preparedness and Assess current status of disaster risk management system in • response Kosovo and the extent to which it can support a response to shocks through social protection programs. Carry out a systematic assessment of social protection programs • for crisis response, focusing on the operational aspects of outreach, targeting, enrollment, and payment, among others. Identify options for contingency financing to support the scale-up • of such programs to respond to shocks. Back to table of contents 27 Western Balkans Social Protection Situational Analyses KOSOVO Resources used Aliu, J., E. Rraci, and K. Bajrami. 2019. “Vocational Hiebl, J., K. Hempel, and S. Brodmann. 2019. “Inte- Education and Training in Kosovo: Challenges grating the Long-Term Unemployed into the and Opportunities.” Job Market: Synthesis of International Expe- rience and Implications for Kosovo,” Technical Brancatelli, C., A. Marguerie, and S. Brodmann. Note, 2019. 2020.“Job Creation and Demand for Skills in Kosovo: What Can We Learn from Job Portal INDEP. 2019. “Vocational Training in Kosovo  : Data?,” World Bank Policy Research Working Features, Relationships and Problems,” 2016. Papers, 2020. Kavanagh, F., “The Implementation and Impact Brodmann, S. and K. Hempel. 2018. “Improving of the Self-Employment Programme (SEP) in the Integration of Women in Kosovo’s Labor Kosovo (2015-2016),” 2017. Market: What Can the Public Employment Agency Do?,” Technical Note, 2018. 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Kosovo*: a new “Law on Economic ht t p s : //ye s fo r ko s ovo.o rg /w p - co nt e nt / Recovery” to address the socio-economic uploads/2019/12/Report-ENG.pdf. impact of the COVID-19 pandemic, ESPN Flash Report 2021/08, European Social Policy GIZ. 2019b. “Employment and Labour Market Network (ESPN), Brussels: European Commis- Analysis: Kosovo,” 2019. sion. Hempel, K. and S. Brodmann. 2020. “Making OECD. 2020. “The COVID-19 Crisis in Kosovo*,” Employment Services and Active Measures 2020, https://www.oecd.org/south-east-eu- Sensitive to the Needs of Young People: rope/COVID-19-Crisis-in-Kosovo.pdf. Recommendations for Youth Employment Programs in Kosovo,” Technical Note, 2020. Paun Jarallah, A. and A. Rizvanolli. 2019.,Capacity assessment of the Employment Agency, report Hempel, K, E. Alo, and S. Brodmann. 2019. Active drafted under the EU IPA ‘Support to Ministry Labor Market Programs (ALMPs) in Kosovo: of Labour and Social Welfare for Efficient and Mapping of Non-Public Providers,” Technical Effective Implementation of Active Labour Note, 2019. Market Measures’ project, Prishtina, December 2019. Back to table of contents 28 Western Balkans Social Protection Situational Analyses KOSOVO Robayo-Abril, M., A. Terskaya, and S. Brodmann. World Bank and ESMAP. 2019. Poverty and Distri- 2020. Ex-ante Evaluation of the Impact of butional Analysis of Electricity Poverty and Increases in Minimum Wages on Labor Market Protection of Vulnerable Customers in Kosovo. Outcomes in Kosovo. Policy Research Working World Bank, Washington, DC. Paper 9357. World Bank, Washington, DC. World Bank and wiiw. 2020. Western Balkans Robayo-Abril, M. and N. Millan. 2019. Breaking Labor Market Trends. Available at: https://data. the Cycle of Roma Inclusion in the Western wiiw.ac.at/seejobsgateway-q.html. Balkans. World Bank, Washington, DC. SEE Jobs Gateway Database, https://data.wiiw. ac.at/seejobsgateway.html. World Bank. 2017a. "Promoting Women's Access to Economic Opportunities: Kosovo." Policy Note, World Bank, Washington, DC. https://openknowledge.worldbank.org/ handle/10986/29587. World Bank. 2017b. Republic of Kosovo Systematic Country Diagnostic. World Bank, 2019a. Maternity, paternity and parental leaves in Europe: Comparison of fami- ly-related leave policies and key legal provi- sions with Implications for Kosovo. Technical Note. September 2019. World Bank, Wash- ington, DC. World Bank. 2019b. Kosovo Social Assistance Scheme Study. World Bank, Washington, DC. World Bank. 2019c. Options for Child Benefits in Kosovo: Synthesis of international experiences and considerations for Kosovo in response to Parliament Resolution on Child Allowances, No. 06-R-0141. Washington, DC. World Bank. 2019d. Reform Momentum Needed, Western Balkans Regular Economic report No.15, Spring 2019. World Bank. 2020a. Student Today, (Un)employed Tomorrow? Addressing Youth Unemployment in Kosovo. World Bank, Washington, DC. World Bank. 2020b. Kosovo: Pension Policy Chal- lenges in 2020. Policy Note. World Bank. 2020c. “The Economic and Social Impact of COVID-19 – Labor Markets.,” in Western Balkans Regular Economic Report, Vol. No. 17. Back to table of contents 29 Western Balkans Social Protection Situational Analyses KOSOVO Annex 1. Key gaps in management and delivery of social services In its Concept Paper on Social and Family Services, the Ministry of Labor and Social Welfare (MLSW) has identified key gaps in the management and delivery of social services, among them: • Lack of sustainability in the provision of social and family services due to poorly defined competencies of the central and local governments for service planning, delivery, monitoring, inspecting and reporting. • Reactive approach of the Centers for Social Work (CSWs) when cases become acute or urgent, leaving aside the focus on preventive and follow-up services. • Lack of informing Kosovars about the places where they can receive services and what social and family services are provided. • Limited access to and scope of services offered by CSW Social and Family Services (although CSWs are present in all municipalities, access to them is not always easy) combined with asymmetrical expansion of services provided by NGOs which are concentrated in urban areas, and specifically in larger cities. • Lack of capacity of the Monitoring and Inspection Unit (at MLSW Department of Social and Family Policies level) on the quality of social and family services. • Separation and definition of the monitoring and inspection responsibilities of municipalities and the central government. • Need to redefine the role and responsibilities of existing mechanisms in the MLSW, such as the General Council for Social and Family Services and the Panel for placement of children in family foster care and adoption. • Insufficient funding allocated by the government and municipalities to guarantee adequate quality of social and family services. • Absence of alternative care options. The far-reaching reform of closing down residential institutions (orphanages) requires quick implementation of alternative forms of care, such as family foster care for children and for the elderly and community-based care for vulnerable groups. • Lack of adequate procedures, guidelines and instruments for contracting social and family services which leads to poorly structured cooperation between governmental and non-governmental social service providers and to a lack of sustainability in providing social services. Back to table of contents 30 Western Balkans Social Protection Situational Analyses KOSOVO Annex 2. Existing pension schemes in Kosovo The table provides a description of existing pension programs in Kosovo. It is based on the Concept Document for Regulating and Managing the Field of Pensions and Benefits from Social Security, which the Ministry of Labor and Social Welfare (MLSW) published for consultation in October 2018. Table A1: Summary of pension schemes in Kosovo Scheme Criteria Monthly Amount Pensions regulated by Law No. 04/L-131 on State Pension Funds Basic Pension Scheme Age 65 years and older. EUR 90 Permanent residence in Kosovo. Citizenship of Kosovo. Presentation to MLSW every 6 months. Ex-Contributor Pension42 Age 65 years and older. Permanent residence in Kosovo. Presentation to MLSW every 6 months. At least 15 years of contributions to the pension system in the former Yugoslavia before 1999, Recognition of work experience in 1989-1999. Categorize users according to the qualification structure: - Low-level pensioners. EUR 158 - Secondary school retirees. EUR 172 - High school graduates. EUR 186 - Pensioners with superior education. EUR 230 Basic Pension Scheme Age 18-65 years of age. EUR 90 work-related D is for permanent disability (100%). EUR 75 non-work-related Permanent residence in Kosovo. After 1, 3, or 5 years (depending on the assessment), the beneficiary submits to the Medical Commission for medical reassessment. Early Pension Scheme of Trepça Permanent residence in Kosovo. EUR 10543 Company Age 50-65 years of age. A proven contribution of at least 10 years in the mining sector (includes the period of dismissal during the 1990s). Limited work ability up to 50%. No income from employment or self-employment. Pension Scheme for Members of Minimum age: 45 years. 45 years of age: 50% of the last Kosovo Protection Corps (KPC) Service in KPC for at least 5 years. salary of the KPC Pensions paid after the age 65 years, together with 50 years old: 70% of the last salary Law No. 03/L-100 on Pensions of Members of the Kosovo Protection Corps the basic pension and the contributing pension. from the KPC Survivors (family) can ben-efit: spouse 60% and chil-dren 20% (regardless of number, up to 18 years of age, 26 years if the latter goes to school) of the pen-sion paid to the KPC pen-sioner. Back to table of contents 31 42 Increased by 15 percent in 2019. 43 Increased by 20 percent in 2019. Western Balkans Social Protection Situational Analyses KOSOVO Scheme Criteria Monthly Amount Pension Scheme for Members of Minimum age: 50 years or 55 years (in the case of 60% of the last salary, 40% of the the Kosovo Security Force (KSF) officers). final salary up to the age of 50, Minimum 20 years contribution. and then 60% (in the case of KPC Law No. 04/L-084 on Pensions of Members of the Kosovo Security Force service). Former KPC members continuing KSF service may retire after 3 years of service in KSF. Survivors (family) can benefit: spouse 60% and children 10% (up to 40%, regardless of number, up to 18 years of age, 26 years if the latter continues education) of the pension that was paid to the KSF pensioner. Pension Scheme for Blind Persons Beneficiaries: blind persons regardless of age. Not less than EUR 170 (plus EUR 170 for a personal assistant if the Law No. 04/L-092 on Blind Persons Commission deems it necessary). Amount to be set based on minimum wages. Other pension schemes - since 2018 Work Invalidity Pension Beneficiaries: EUR 90 Law No. 04/L-131 on State Pension Funds Persons under the age of 65 years who received the same pension prior to 1999. Persons suffering from a work-related injury resulting in permanent disability (100%) (criterion for benefit for work injuries after 1999). Family Pensions Beneficiaries: EUR 90 + 20% for each child under Persons who received family pensions before 1999. 18 years or even 26 years in case of Law No. 04/L-131 on State Pension Funds study. Families who survive the insured family member who contributed to the system before 1999 for at least 15 years. Families of persons who die from accidents at work or occupational diseases, irrespective of their contri- butions to the system before 1999. Retirement for employment or self-employment is forbidden. Pension Scheme for Tetraplegic Beneficiaries: Persons with paraplegia and EUR 170 (+EUR 170 reimbursement Persons and Paraplegics tetraplegia. for the guardian, + 50% of addi- tional compensation depending on Law no. 05/L-067 on the Status and Rights of Paraplegic and Tetraplegic Persons the condition of the disability). Scheme for the Former Political Beneficiaries' categories: Adjusted by a Special Act. Complainant and Persecution Former political prisoners.Former political perse- The scheme has not yet been implemented cut-ed. The second and third pillar of the pension system Mandatory Pension Savings for Workers and other people active in the labor Not less than EUR 150. Workers (second tier) market. Regulation No. 2001/35 on Pensions in Kosovo Contributions: 5% employee, 5% employer. 65 years of age (early withdrawals only if the contributor incurs 100% disability). Voluntary supplementary pensions Supplementary Employer Pension Funds: Not less than EUR 150. Regulation No. 2001/35 on Pensions in Kosovo - Established as non-profit legal entities. - Subject to licensing and regulation. Supplementary Individual Pensions: - Provided by financial institutions, banks and insur- ance companies. - Subject to licensing and regulation. Source: Legislative Legislation for each Scheme and Social Statistics 2015, KAS, 2016. Back to table of contents 32 Western Balkans Social Protection Situational Analyses KOSOVO Table A2. Kosovo: Categories of war-related pensions Scheme Criteria Monthly Amount Pensions regulated by Law No. 04/L-131 on State Pension Funds For War Veterans of the Veteran KLA fighter—a Kosovo EUR 170 (the minimum wage value); after Kosovo Liberation Army (KLA). citizen and a foreign citizen reaching the statutory retirement age, is enti- Law No. 04/L-261 for War Veterans of who is listed in the KLA and tled to an additional allowance for the retired the Kosovo Liberation Army is registered as an armed and veteran's pension. uniformed soldier from KLA Veteran's family, after the death of the veteran: commands, staff and opera- 70% of the spouse's or child's pension (up to 18 tional areas and who was active years or 26 years, depending on the continua- until the end of the war. tion of education): EUR 119. Under age 65 years. Veterans employed in the public and private sector do not have the right to retire. In the case of KPC service, it may select a pension between the KPC or a veteran warrior. Unemployed spouse, minor children, and parents if they do not receive social insurance benefits. Status and Rights of Martyrs, Invalids, Veterans, KLA Members, Victims Sexual Violence, Civil Victims and their Families (Law No. 04/L-172 on Amendments and Supplementation of the Law No. 04/L-054 on the Status and Rights of Martyrs, Invalids, Veterans, Liberation Army Members Kosovo Victims of Sexual Violence of War, Civilian Victims and their Families) Pensioners for the families of A close family member. The family who has a martyr: EUR 448.13 martyrs Children of martyrs' families The family who has two martyrs: EUR 537.76 without parental care are bene- The family who has three martyrs: EUR 582.57 ficiaries of the family pension The family who has four martyrs: EUR 627.39 and enjoy the right to 18 years of age, or 26 years of age if The family who has more than four martyrs: they are attending regular EUR 672.19 education. Pensions of the KLA Families of A close family member. Family with one KLA missing: EUR 448.13 the KLA Children of missing KLA Family with two KLAs missing: EUR 537.76 without parental care are bene- Family with three KLAs missing: EUR 582.57 ficiaries of the family pension Family with four KLAs missing: EUR 627.39 and en-joy the right to 18 years of age, or 26 years of age if Family with more than four KLAs missing: EUR they are attending regular 672.19 education. Pensions of Families of Victims The order is husband or wife, Family with one victim or missing person: EUR and Missing Civilians children, illegitimate children, 168.75 adopted children, parents, Family with two casualties or missing civilians: stepson, stepdaughter. EUR 202.50 The spouse who enters into Family with three casualties or missing civilians: a new marriage shall lose the EUR 219.38 rights set forth in this law. Family with four casualties or missing civilians: Children of the victim or civilian EUR 236.25 missing without parental care Family with four or more casualties or missing are beneficiaries of the family civilians: EUR 253.13 pension and enjoy the right to 18 years of age, or 26 if they are attending regular education. Back to table of contents 33 Western Balkans Social Protection Situational Analyses KOSOVO Scheme Criteria Monthly Amount Invalidity Pension of the KLA Invalids with 20–100% of Invalid with over 80% body injury: EUR 448.13 bodily harm are entitled to Invalid with 71-80% bodily injury: EUR 412.5 retirement. Invalid with 61-70% body injuries: EUR 393.75 Invalid with 51-60% bodily harm: EUR 375 Invalid with 41-50% bodily harm: EUR 356.25 Invalid with 31-40% bodily harm: EUR 318.75 Invalid with 21-30% bodily harm: EUR 225 Civil Invalids Pensions of War Invalids from civil war with Invalid with over 80% bodily harm: EUR 152.5 40–60% degree of disability. Invalid with 61-80% bodily harm: EUR 136.25 Invalid with 40-60% bodily harm: EUR 120 Plus caretaker for over 80% bodily injury: EUR 50.13 Invalidity pensions of the KLA The spouse who enters into a Invalid with over 80% bodily harm: EUR 385.50 after the death of the Invalid new marriage after the death Invalid with 71-80% bodily harm: EUR 330 of the invalid loses the right to pension and benefits. Invalid with 61-70% bodily harm: EUR 315 KLA children without parental Invalid with 51-60% bodily harm: EUR 300 care are benefi-ciaries of the Invalid with 41-50% bodily harm: EUR 285 family pension and are entitled to enjoy up to the age of 18 Invalid with 31-40% bodily harm: EUR 255 years, or 26 years if they are attending regular education. Invalid with 21-30% bodily harm: EUR 180 Families of war-wounded KLA invalids who die as a result of these injuries (within 3 years after the war) have the right to a family pension at 100% disability. Nursing Pensions of KLA For invalids with 81-100% EUR 225 Invalids degree of disability. Children of Civil Invalids of War Invalid with over 80% physical impairment: after Death of Invalids EUR 123.25 Invalid with 61-80% physical injury: EUR 110.25 Invalid with 40-60% bodily injury: EUR 97.25 Source: Legislative Legislation for each Scheme and Social Statistics (2015), KAS (2016). Back to table of contents 34 © 2022 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This project is funded by the European Union