In April 2016, the Polish government launched the programme “Family 500+” (Rodzina 500+) to boost birth-rates and reduce child poverty by improving living conditions of large families. The European Platform for Investing in Children (EPIC) presents some early indicators of the programme’s progress and impact.

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Eurostat figures show that Poland has one of the lowest fertility rates in Europe with 1.32 children per women in 2015, the second lowest in Europe after Portugal.

500+ support for Polish families

Under the programme parents can receive a tax-free benefit of PLN 500 (about EUR 120) per month for the second and any consecutive children until they reach the age of 18. The additional support is roughly 12% of the average gross wage in Poland in 2016.

Families are also eligible to receive the benefit for their first child if the family income is under PLN 800 (about EUR 180) per family member or under PLN 1200 per family member in the case of families with a disabled child. The child benefit does not impact eligibility for other benefits.

The programme covers an estimated 55 per cent of all children in Poland under the age of 18. Data show that more than 3.82 million children up to the age of 18 were covered by the programme by the end of February 2017, with a total spend of PLN 21 billion.

The benefit is available to all children, not limited to those born after the programme has launched, meaning it has contributed to a significant increase in government spending on children.

In order to receive the benefit, each family has to fill in an application form and provide it to the local authorities, social benefits centres or welfare centres. Families must re-apply every year.

Advantages and disadvantages of the programme

The initial results suggest that the programme has positive effect on the number of births. Data from Poland’s Central Statistics Office (GUS) show a 13-15 per cent increase in childbirth in December 2016 and January 2017 compared to the same period in previous years.

Furthermore, the programme is also expected to be an important mechanism for eliminating poverty among children in Poland. The initial simulations estimated that the rates of extreme poverty among children would decrease by 76 per cent (from 11.9 to 2.8 per cent of all children) due to the programme cash transfers.

Additional evidence shows that the increase in income after the programme was introduced has contributed to higher consumption and saving rates, while debt levels have decreased.

One of the major concerns of the "Family 500+" programme is that the additional non-work income may have an adverse effect on the labour market. Workers with low wages may have lower incentives to be active, and women in particular might be encouraged to stay home and take care of children.

Results from the latest report by the Institute for Structural Research (IBS) suggest that the labour force participation and employment of eligible mothers would have been between 2.5 and 3 per cent higher by mid-2017 in the absence of the programme.

There is a need for more data and evidence to establish whether and how the Family 500+ programme is fulfilling its objectives, and its ultimate impact on the labour market. Going forward, it is also important to ensure that the government is able to finance the programme long-term.

This news item was written for the European Platform for Investing in Children (EPIC).