1. Social Assistance Pilots Program SA Pilots Seminar New procedures: proposals and implementation Dmytro Boyarchuk CASE Ukraine March, 2010

2. 1. Project implementation 2. New mechanism for processing applications and for surveillance of recipients 3. Current mechanisms 4. Proposed mechanisms 5. General application procedures 6. Procedures for “green list” applicants 7. Fraud detection procedures 8. Piloting Content Content 2

3. Project implementation Project implementation Indirect income testing - Data collection - Consultations with pilot offices - Development/improvement of HMT model Strengthening role of public social inspector - Analysis of legislative framework for institution of public social inspectors in Ukraine - Institutional role of commissions in domestic fraud prevention policy - Best practices on fraud prevention policy 3

4. New mechanism for processing applications and for surveillance of recipients (1) Till now the experiment was organized in the format of double-blind experiment when neither welfare office specialists, nor social assistance applicants knew in what way the collected data are usedTill now the experiment was organized in the format of double-blind experiment when neither welfare office specialists, nor social assistance applicants knew in what way the collected data are used The next step of experimenting envisages involving of welfare specialists to application of the proposed mechanisms;The next step of experimenting envisages involving of welfare specialists to application of the proposed mechanisms; For piloting we consider several approaches for application of HMT model for SA applicants’ income estimate;For piloting we consider several approaches for application of HMT model for SA applicants’ income estimate; On the issue of strengthening public social inspector the main attention at the next step of experimenting is paid to testing formal verification procedures for public social inspector;On the issue of strengthening public social inspector the main attention at the next step of experimenting is paid to testing formal verification procedures for public social inspector; 4

5. New mechanism for processing applications and for surveillance of recipients (2) New mechanism for processing applications and for surveillance of recipients (2) Within the project there was defined necessity not only for experimenting with new/improved instruments, but also necessity for identification of pre-conditions for the most efficient performance of the instruments;Within the project there was defined necessity not only for experimenting with new/improved instruments, but also necessity for identification of pre-conditions for the most efficient performance of the instruments; The proposed mechanism for processing applications and for surveillance of recipients outlines a framework (one of possible approaches) which will make the piloted mechanisms to be efficient for strengthening social assistance system;The proposed mechanism for processing applications and for surveillance of recipients outlines a framework (one of possible approaches) which will make the piloted mechanisms to be efficient for strengthening social assistance system; 5

6. Current mechanisms (1) Current mechanisms (1) Public social inspector has many functions, however, mainly deals with collection of information about financial stance of applicants which go through commissions;Public social inspector has many functions, however, mainly deals with collection of information about financial stance of applicants which go through commissions; Commissions allow for local communities to play important role in decision- making on granting of social benefits;Commissions allow for local communities to play important role in decision- making on granting of social benefits; The cases and procedures for formal verification of applicants by public social inspectors, to large extent, are defined at the local level;The cases and procedures for formal verification of applicants by public social inspectors, to large extent, are defined at the local level; 6

7. Current mechanisms (2) Current mechanisms (2) First screening of documents Potential eligibility Exit DeclinedGranted Ineligible Submission of documents Does not pass standard eligibility criteria Application through commission Home visits for suspicious cases Exit Home visits for all cases Applicant Provisional consultations Exit Home visits by public social inspector Commission 7

8. Current mechanisms (3) Current mechanisms (3) Verification of documents Screening on status change Fraud Stay within the program Penalty ErrorCorrection Stay within the program ErrorCorrection Exit DeclinedGrantedExit 8

9. Proposed changes Proposed changes Simplification of general application procedures. Creation of clear and transparent mechanism;Simplification of general application procedures. Creation of clear and transparent mechanism; Introduction of “green list” procedures for return applicants who proved to be honest and diligent recipients;Introduction of “green list” procedures for return applicants who proved to be honest and diligent recipients; Formalization of procedures of formal verification by public social inspector;Formalization of procedures of formal verification by public social inspector; Separation of fraud prevention procedures from general application process;Separation of fraud prevention procedures from general application process; Consolidation of procedures of formal verification of applicants into a separate set of measures;Consolidation of procedures of formal verification of applicants into a separate set of measures; 9

10. General application procedures (1) General application procedures (1) Interview with social worker/inspector during application;Interview with social worker/inspector during application; Based on the results of interview suspicious applicants (for instance, those who declared incredibly low or zero incomes) and special applicants (for instance, single pensioners inhabiting in large apartments);Based on the results of interview suspicious applicants (for instance, those who declared incredibly low or zero incomes) and special applicants (for instance, single pensioners inhabiting in large apartments); Application of all set of formal verification measures for suspicious and special applicants;Application of all set of formal verification measures for suspicious and special applicants; Proceeding of cases and decision-making (on suspicious and special cases) by public social inspector (commission should be become a body for consideration of appeals);Proceeding of cases and decision-making (on suspicious and special cases) by public social inspector (commission should be become a body for consideration of appeals); 10

11. General application procedures (2) General application procedures (2) Interview with social worker/inspector Eligible Public social inspector Exit Declined Granted 1) Verification of documents 2) In-depth interview under caution 3) Homes visits by public social inspector Ineligible Submission of documents Exit Applicant Provisional consultations Suspicious caseSpecial case Investigation Granted Potentially eligible Exit 1

12. Procedures for “green list” applicants (1) Procedures for “green list” applicants (1) We propose for “green list” applicants to pass through simplified application procedures;We propose for “green list” applicants to pass through simplified application procedures; We propose to include to “green list” those applicants (a) who in the past were granted benefit through either standard procedures or comprehensive formal verification, (b) for whom no fraud was detected;We propose to include to “green list” those applicants (a) who in the past were granted benefit through either standard procedures or comprehensive formal verification, (b) for whom no fraud was detected; It is proposed for “green list” applicants to inform welfare offices about changes in income or status by themselves;It is proposed for “green list” applicants to inform welfare offices about changes in income or status by themselves; “Green list” applicants are recommended to pass through general application procedures once per year (or once per two years);“Green list” applicants are recommended to pass through general application procedures once per year (or once per two years); For “green list” applicants who failed to inform about changes in income or status we propose application of penalties;For “green list” applicants who failed to inform about changes in income or status we propose application of penalties; 1212

13. Procedures for “green list” applicants (2) Procedures for “green list” applicants (2) Screening of documents Eligible ExitGranted Ineligible Update of the documents “Green list” applicant 1313

14. Fraud detection procedures (1) Fraud detection procedures (1) For fraud detection there should be created a list of recipients who should go under formal verifications;For fraud detection there should be created a list of recipients who should go under formal verifications; The list for formal verifications is proposed to include three components: (а) cases which are considered risky based on indirect income estimates, (б) cases which are considered risky based on “client profiling”, (в) cases randomly pre-selected;The list for formal verifications is proposed to include three components: (а) cases which are considered risky based on indirect income estimates, (б) cases which are considered risky based on “client profiling”, (в) cases randomly pre-selected; Also there should be envisaged a possibility for welfare offices to add to the list cases they consider should be pre-selected for formal verification;Also there should be envisaged a possibility for welfare offices to add to the list cases they consider should be pre-selected for formal verification; For the pre-selected cases the following formal verification procedures are applied: (1) verification of documents, (2) in-depth interview under caution, (3) home visits by public social inspector ;For the pre-selected cases the following formal verification procedures are applied: (1) verification of documents, (2) in-depth interview under caution, (3) home visits by public social inspector ; In case of fraud detection collected evidences on fraud should be used by public social inspectors for decision-making;In case of fraud detection collected evidences on fraud should be used by public social inspectors for decision-making; 1414

15. Fraud Stay within the program Public social inspector Error Correction 5% of cases 1% of cases Investigation Penalty List of random cases 1) Verification of documents 2) In-depth interview under caution 3) Home visits by public social inspector List of the most risky cases according to “client profiling” List of the most risky cases according to HMT Fraud detection procedures (2) Fraud detection procedures (2) 1515

16. Piloting (1) Piloting (1) One of possible approaches for application of indirect income testing Creation of list of recipients (based on their characteristics) from the most risky to the least risky; The most risky recipients (the largest difference between declared and estimated income) should be pre-selected for formal verifications (5% of recipients); We anticipate that formal verification of cases pre-selected based on the new mechanisms, will increase number of detected fraud (per one verification); 1616

17. Piloting (2) Piloting (2) Proposals for formal verification procedures by public social inspectors Formal verification should serve as an instrument for collecting evidences on fraud for decision-making by public social inspector; Alternative home visit act should be a pilot instrument for collecting information. Public social inspector during home visit will assign point representing wellbeing of benefit/subsidy recipient; On the top of that we propose to apply in-depth interviews under caution for collecting evidences; 1717

18. Piloting (3) Piloting (3) Improvement of mechanism of housing subsidies provision Improvement of mechanism of privileges provision Introducing uniform households means testing criteria for granting all types of social assistance, and improving the Techniques of Calculation of Family’s Aggregate Income for All Types of Social Assistance 1818