2. Introduction
• Until 1989 Poland, as well as other communist
countries, was a centralised state where the state
administration activities at various levels and
state-owned enterprises had been strictly
controlled by the extensive apparatus of the only
legal party
• Social policy principles were full employment
and egalitarism.
• All social policy benefits were employment
related.
3. In the presentation I will focus on the period of transformation which started
in Poland in 1989.
• In this period, political and economic reforms were the principal driving
forces of the transformation of the social model in Poland.
• Reforms, included political changes aiming at creation of a democratic
system, such as: individual rights, civil and political liberties, changes in
the state administration including the decentralisation of public
administration and changes of the economic system aimed at restoring a
market economy.
• 20 years of evolution resulted in creation of the Polish social model – a
mix where the elements of the conservative and corporate tradition are
blended with the liberal model elements.
• It is dominated by partly privatised social insurance, which provides
employment related benefits, supplemented by the universal, means-
tested benefits.
• Social services sector is underdeveloped, charging families with many
tasks of the social services.
4. • Last 20 years in Poland can be characterised by an
increasing number of economically non active population,
high unemployment and fast differentiations of income.
• These outcomes obviously resulted from rapid
restructurization of the economy of an exceptional
character, where the processes generated by globalisation
of the economy overlapped on the system transformation
processes.
• However, it would be difficult not to notice the weakness of
the social model, shaped by the evolution process, which
fails to deal with the challenges generated by the economy
(especially by crisis of the last years).
5. The process of the changes in the social model during last years can be
divided into five phases:
• 1989-1993 . the period of the deep economic crisis, radical decrease of
incomes and fast development of unemployment. In this period social
policy concentrated on building social safety net to protect the social
groups most threatened by the transformation process.
• 1994-1997 . the period of the dynamic economic development. For social
policy it was the period of planning and designing the reforms to adopt
the institutions of social security to the market economy.
• 1998-2002 . the period of the slow-down in the economy. It was the
period of market driven reforms of social security institutions and
decentralisation.
• 2003- 2007 . the period of economic recovery. It is a period dominated by
the impact of EU accession on the Polish social policy
• 2008 – present, the period of global economic crisis, period of creating
new anti crisis solutions
6. Changing contexts: demography,
economy, society, politics
We observe a significant reduction of the share
of 0-14 years age group in the total
population, an increase of the share of people
of the immobile production age (45-64) and of
the post-productive age (65 and more).
Structural changes of the population result first
of all from:
• a significant decrease of fertility, and
• an increasing life expectancy.
7. Fertility decrease is explained by changes in the family
development pattern, changes of women’s attitudes to
their family roles, of the economic activity,
participation in the social life, etc.
An important factor, which influences decreasing fertility,
consists in the cost of having children, both direct
(expenses related to education and childcare) and
indirect (including especially the threats related to
deterioration of women’s status in the labour market),
resulting from the development of market economy
and commercialisation and privatisation of services.
A rapid decrease of the fertility rate was encouraged by
the social policy transformation, where the role of
family-addressed benefits became seriously reduced
8. Visible growth of life expectancy is attributed
first of all to changes in the lifestyle (diet,
reduction of intake of alcohol and cigarettes)
related to the transformation process and
improvement of medical care.
In particular, a clear reduction of middle-age
premature male mortality took place, which
had been characteristic of many communist
countries before 1989, including Poland
9. • Due to changing demographic structure of the
population its economic features also
changed. The population dependency ratio
has systematically decreased since 1989, the
old-age index, however, slowly increases
indicating at the process of aging of the Polish
populatio.
• A significant change of the family
development pattern took place in this period.
The share of families with children dropped,
while the share of couples without children
and single parent families increased
10. Aging population and reduced size of
households led to an increase of the number
of households with exclusively elderly, who
need assistance more frequently than others.
11. The State, its organisation and
normative foundations
Changes of the social model in Poland after
1989 resulted from the principal system
reform, which took place in effect of the
collapse of communism and the taking over of
the power by the Solidarity movement in
1989.
The system transformation applied to all spheres
of life: political, social and economic system.
12. Decentralisation of state
administration
In contrary to other eastern block countries,
public administration decentralisation was
one of the leading ideas of the new power
elites, related to the democratic opposition
and the Solidarity movement during the first
years of transformation.
An urgent necessity for reforms resulted also
from the weakness of the existing
administrative structures.
13. The law guaranteed the financial autonomy to the
self-governments, but it was not accompanied by
the public finance decentralisation, which was
implemented only in 2004.
Due to the delays in public finance decentralisation
reform, restrictive financial policies in respect of
the self-governments and their limited financial
independence, many tasks transferred to their
competence could not be adequately
implemented, and this is what discouraged social
acceptance for the reforms and often led to their
unwanted effects.
14. A changing political system
Systemic transformation resulted also in partial
demonopolisation of the welfare state. Initially, trade unions
were the strongest social partner for the government; they
had a direct influence on the politics. In time, along with
privatisation of the economy and public administration
decentralisation, their role became considerably weaker and
was balanced by employers’ organisations.
Social dialogue was being implemented within the framework of
tri-partite institutions on the national, and later regional,
level. Tri-partite institutions were established in the social
policy bodies (social security, health insurance, protection for
the unemployed, etc.), consisting of the trade unions,
employers and the government; the performed limited
supervisory functions.
15. Spontaneous movement of civil initiatives, which
took place in the first years of the transformation
period, became supported by changes in the
legislation, which still back in 1989 introduced
the principal civil freedoms: the right to associate
and to demonstrate.
General principles, concerning the co-operation of
non-governmental organisations with the public
sector and the principles of financing of such
organisations, were finally regulated, after many
years of works and discussions in respect of the
shape of the solutions, only in 2003.
16. A changing economic system
The shape of the social model was impacted
mainly by the economic reforms. Poland
underwent macroeconomic reforms, which
were the fastest among post-communist
states; they consisted of the introduction of
tight monetary policy and market-economy
rules, necessary in view of the total
macroeconomic imbalance at the outset of
the transformation
17. During the first years of transformation, new
institutions of the labour market service and the
social assistance institutions emerged as the
result of the transformation of the centrally
planned economy institutions.
Their basic objective was to counteract the rapid
increase of unemployment and rising poverty.
After 1994, in order to reduce social expenditures
and to better address the assistance to the poor,
a part of employment related benefits was
converted into earmarked benefits, based on
testing the income
18. The role and importance of state-owned
enterprises changed radically; they were
subject to stringent financial limitations and
subject to compete in the market.
These enterprises rapidly released the excessive
employment (hidden unemployment) and got
rid of their social functions.
• A major part of services provided by these
enterprises were simply liquidated, while
other ones were commercialised and
privatised
19. The policy, conducted by the liberal democratic and social
democratic parties led to the reduction of social
functions of the state, which was reflected by their
partial commercialisation and privatisation.
It resulted from the fiscal pressures, but also from the
dominating conviction of politicians regarding the
public sector inefficiency and the necessity to reduce
its dimensions.
It applied in particular to educational and childcare
services (nurseries and kindergartens, recreational
centres), cultural institutions (cultural centres and
libraries), adult education and some health care
services.
Reforms of the old-age pension system and health care
system introduced private providers and (inner) market
mechanism into the social security system
20. Principles concerning the Polish
welfare state and its organisation
Constitutional foundations of the welfare state
Polish Constitution, adopted in 1997, contains a set
of principal social rights, which constitute a basis
for the legislative acts, which regulate in detail
specific issues.
The question of the inclusion of social rights into
the Constitution and their scope were the subject
of a serious dispute and a debate during the
works concerning constitutional act.
21. Organisational and functional
structure of the social protection
system in Poland
• The Polish social protection system consists of:
• Social insurance schemes (old-age, disability, survivors,
employment injuries, sickness and maternity, care und
funeral allowances),
• Health care,
• Family benefits,
• Social assistance (cash and in-kind benefits and
services) and housing allowances,
• Vocational and social rehabilitation for disabled,
• Employment services and unemployment benefits.
22. Social insurance has a dominating position in the
social security system, both in terms of the size
of revenues and expenditures, and of the number
of beneficiaries.
• Until 1998, social insurance was entirely public,
based on the pay-as-you-go system and
implementing a large scale of social
redistribution.
• In 1999, the retirement insurance reform came
into force (for employees and self-employed
outside agriculture), introducing the DC (defined
contribution) system and its partial privatisation.
23. The objective for the reform was to accelerate
economic growth by increasing internal savings,
to ensure long-term financial stability of the old-
age pension system and to reduce the public
debt.
They are, with the exception of the second pillar of
the retirement insurance, managed by public
institutions, directly subject to the central
government.
Second pillar of the retirement insurance is
managed by private institutions, subject to a
stringent control and regulation by the central
government.
24. Health care system
Features of the Polish health care system include:
differentiation of sources of financing, variety of
ownership of service providers and differentiation of the
access to the health care services.
In 1999, a health care system reform was introduced, aimed at
the separation of the payer from the health care service
provider and at demonopolisation of the health care
services.
The reform resulted in the establishment of the universal
health insurance consisting of (including 16 regional)
autonomous Sickness Funds.
The operation of the public health care units was transferred
to the local self-governments.
25. After a change of the government into a leftist one,
in 2002 the health insurance system was
centralised into a single fund subjected to the
central government. It generated a strengthening
of the crisis-type phenomena.
Although the health insurance is financed by
contributions payable by the insured, and
additionally the government and local self-
governments finance the public health
programmes from their own budgets, over ½ of
the health care expenses is financed by the
households
26. Protection of unemployed (unemployment
benefits) and ALMP as a system was
established in 1990 as the basic protection
tool against quickly growing unemployment
and for its limitation.
The tasks are financed by a fund (Labour Fund),
financed in turn by the payroll tax paid by
enterprises and by the central budget grants.
This fund is managed by the central
government and the tasks implementation is
delegated to self-governments (poviats).
27. Family benefits
Family benefits (family, childcare allowances,
etc.) . means-tested benefits of universal
character play a small role in the system of
social security. The family benefits underwent
principal reforms during the transformation
period. The reforms of social benefits,
addressed to families, were driven by many
different, frequently contradictory and
inconsistent processes.
28. Social assistance
Social assistance is the basic programme addressed to people and families
living in poverty (including the unemployed). It includes the means-tested
cash benefits and services (social work, home and stationary services for
the elderly and disabled, family counseling, etc.).
Management of the social assistance (depending on the programme) is
performed on all levels of the state administration, but the principal role
in benefit and service delivery is performed by gminas.
Social assistance cash benefits are financed by the state budget (earmarked
grants) and with the gmina resources. Services are financed by gminas,
poviats and beneficiaries. copayments.
Services are provided by public institutions. Furthermore, many NGOs
function in the area of social assistance, where they implement the tasks
financed either with public or with private funds.
29. State Fund for Rehabilitation of Disabled Persons
(PFRON)
• PFRON is the state's targeted fund established on 1 July
1991.
• The funds of the State Fund for Rehabilitation of
Disabled Persons are allocated by the Chairman of the
Fund's Board to:
• 1) voivodship and poviat-level local governments, to
finance specific tasks – based on the relevant formula,
• 2) entities performing tasks assigned by the Fund or
other tasks under the Act.
• The Fund’s resources will be used to establish new and
retain the existing jobs for the disabled, to fund social
rehabilitation of such persons and co-finance tasks
under governmental programmes.
30. Non-governmental organisations
• Non-governmental organisations – a third sector, next
to public and market ones, are an important segment
of each effective and democratic state and society.
They perform tasks in line with the policy of the state
or tasks that, despite the existing demand, are not
performed by public or private, profit-generating
institutions. They provide the society with services,
often filling the gap that the public and market sector
are unable to bridge.
• It is extremely difficult to give an estimate of the
number of actually working organisations. The number
or non-governmental organisations acting for the
benefit and in the community of disabled persons and
persons afflicted with illnesses in Poland is estimated
at approx. 7 thousand.
31. Disabled persons
Institutions acting for the benefit of disabled persons
• Under the law, actions for the benefit of the disabled are performed
by the national government and local governments. The tasks for
the benefit of the disabled are also performed by non-
governmental organisations of disabled persons or NGOs that act
for their benefit.
Government Plenipotentiary for Disabled People
• The supervision, in terms of content, over the execution of tasks
specified by the relevant Act is performed by the Government
Plenipotentiary for Disabled People – Secretary of State in the
Ministry of Labour and Social Policy. From 2007, the post has been
occupied by Mr. Jaroslaw Duda. The Plenipotentiary is appointed
and dismissed by Prime Minister at the request of the Minister of
Labour and Social Policy. The advisory body to the Government
Plenipotentiary for Disabled People is the National Consultation
Council for Disabled Persons.
32. Expenditure on social protection
Public social expenditures are clearly dominated by
the social insurance benefits (old-age, survivors.
and disability pensions).
Poland spends relatively high amounts, as
compared to other countries, for old-age
pensions and family pensions. On the other hand,
the share of expenditures for such benefits as the
family benefits, unemployment benefits
(regardless of high unemployment rate) and
social assistance
33. Financing of social protection
Social protection system revenues in Poland are dominated by
contributions, as a result of the domination of social
insurance in the social expenditures . Contributions finance
the expenditures of the central social funds, such as: social
insurance fund, national health fund, labour fund, etc.
The share of taxes in social revenues had dropped in 1995-
2004, while the share of contributions increased as a result
of the introduction of the health insurance system.
The state budget and the central social funds revenues makes
up a dominating item in financing of the social protection
expenditures. Due to the reforms related to
decentralisation of the state administration, the role of
local self-government budgets in financing of such
expenditures slightly increased
34. Commercialisation and privatisation of
public services
In the late 1980s and early 1990s, when Poland
was entering the transformation process, the
public service sector was dominated by the
state to at least the same degree as the rest of
economy. The state and its enterprises had
the monopolistic position in the providing of
social services
35. Privatisation adopted various forms: by
liquidation of state-owned service providing
entities, where the services which had been
hitherto provided by the state became the
market services, by privatisation of such
entities, by allowing the activities of both
public and private sector in the market, by
contracting outside the tasks performed by
the public administration or by bringing the
prices of services, provided by them, to the
market level (commercialisation).
36. Privatisation process, mainly by liquidation and
commercialisation, at the beginning of the 90-
ties included in particular public nurseries and
kindergartens operated by gminas and state-
owned enterprises, what resulted in considerable
reduction of the access to such services.
The access to the institutions of the long-term care
for the elderly, which until 2003 had been
financed by the central budget through
earmarked grants, was not reduced, and in
parallel to the public entities private ones
emerged in this area (operated by the church
organisations, NGOs and for-profit organisations).
37. From the beginning of the transformation period a rapid process
of informal privatisation occurred in the health care sector,
consisting in the use of public property to perform private
medical practices. In effect of the 1999 reform, uncontrolled
privatisation processes were partly substituted by more
formalised and targeted processes. In accordance with the
reform, both private and public providers of health care
services formally received an equal status in the access to
public funds and may conclude, with equal rights, contracts
with the Sickness Fund for the provision of health care
services. Concurrently, many gminas, which had taken over
the health care entities, started their restructuring and
privatisation. In particular, a part of outpatient health care
services was subject to privatisation. Also, private hospitals
were established. Nevertheless, public sector continues to
dominate the health care services
38. Role of NGOs
There are more than 40,000 registered
associations and foundations in Poland, most
of them operate in the area of provision of
social assistance, support to the disabled and
labor and education markets.
There are approximately 2 million voluntaries
working for the NGO organisations
39. In 2003, an act was passed on the public utility and voluntary
activity34. It provides comprehensive legislative regulation
of the collaboration between state administration and
NGO, providing a basis for the subsidiarity principle. It
defines the terms and rights of the voluntary social worker
and regulates the rules of taxation and financing of NGO
activities. It has also established an institutional framework
for dialogue and collaboration between NGO.s and the
state administration.
New regulations introduced, among others, the accreditation
principles for those NGOs, which intend to perform public
tasks financed with public funds. Self-governments of
various level are obliged to develop programmes of co-
operation with non-governmental organisations, and the
procedure of competitions for implementation of public
tasks was statutorily regulated.
Furthermore, accredited NGOs may receive from the
taxpayers 1 per cent of their payable tax.
40. Poland was the only European country to avoid
recession in the global financial crisis that
followed the 2008 collapse of Lehman
Brothers. Since the start of the crisis, Poland’s
economy has grown by 15%, according to the
International Monetary Fund, easily topping
its next closest EU rival, Slovakia, at 8%.
41. This success partly reflects the internal strength of
the economy, and partly the impact of several
external factors which helped Poland to deal with
the global crisis. The list of internal strengths is
quite extensive. First, the country is still
benefiting from its attractiveness to foreign
investors and the fundamental competitive
advantage it enjoys within the EU as a production
site. Although levels of foreign direct investment
fell significantly during the crisis, lower labour
costs and higher labour market flexibility helped
to maintain growth in industrial output and
exports.
42. Key advantage within the country is the relatively
low level of debt among households and firms,
leading to a high degree of financial stability and
a strong portfolio of banking assets.
Finally, compared to its Central and East European
neighbours, Poland has a relatively big and
developing internal market that proved quite
resilient to the economic slowdown.
43. Building a common front against economic crisis
The social partners’ desire to work together in building a
common front against the economic crisis
• Tripartite Commission for labour law and collective
agreements and for economic and labour market policy,
respectively, agreeing that the following matters merit
further discussion:
• subsidising jobs using public funds;
• accelerating the use of European Union funds;
• increasing the funds available for loan guarantees to
business enterprises;
• introducing a 12-month settlement period at enterprises
with trade union or employee representatives;
• financing some remunerations using public funds;
• recognising social benefit packages as a source of labour
law.
44. „Bridge" pensions,
The „old” reform is described as being "incomplete" because
it still allows too many people to benefit from the
costly early-retirement schemes.
• In principle, these temporary pensions are designed for
people over 50 who are deemed unable to perform their
tasks until official retirement age because of special
working conditions. In practice, however, the list of
occupational categories eligible is so vast that the number
of beneficiaries exceeds one million people , or nearly 6%
of labour force.
• The pension reform has replaced early-retirement schemes
with "bridge" pensions, which have been implemented in
2007 as a kind of temporary entitlement for a much more
restricted number of employees, though the introduction
was postponed in the face of strong resistance by some
workers, such as coal miners, teachers and railway workers.
45. Public Employment and Pension Reform
Rising levels of public debt and the concerns
over budget deficits are pervasive across
Europe. Somewhat related to Poland’s
situation is the resolve to reform its public
pension system. New legislation aims to
change the structure of how cash transfers are
managed in the pension system. The plan calls
for cash transfers to private pension funds to
decrease to 2.3 percent (opposed to pre-
reform levels of 7.3 percent)
46. Retirement age raise
• On 11 May 2012, the parliament accepted the
government’s proposal to raise the retirement
age to 67, with the coalition of PO, PSL and
Palikot’s Movement voting for the reform and
the SLD and PiS against it.
• The amendment to the Act on Pensions was
signed by President Bronislaw Komorowski on 1
June 2012, and from 1 January 2013 the
retirement age will increase by three months
every year.
• The retirement age of 67 for men will be reached
in 2020 and for women in 2040.
47. Uniformed services pension reform adopted
• On 1 June 2012, the Act reforming the pension
system for the 11 uniformed services was also
signed by the president. The new regulations
cover professional soldiers, police officers, as well
as people working in the Internal Security Agency
(ABW), Foreign Intelligence Agency (AW), Military
Counterintelligence Service (SKW), Military
Intelligence Service (SWW), Central Anti-
Corruption Bureau (CBA), Polish Border Guard
(SG), the Government Protection Bureau (BOR),
National Fire Service (PSP) and Prison Service
(SW).
48. The reform assumes that:
• the functionaries of uniformed services will be able to
retire at the minimum age of 55 and after 25 years of
service (previously they could retire after 15 years’
service and there was no minimum age threshold);
• in line with trade union proposals, new regulations will
only apply to new recruits from 2013; those already in
service will be able to choose between the old system
(retirement after 15 years) and the new system
(retirement after 25 years of service);
• the basic pension at the age of 55 will be 60% of the
average salary from any 10 successive years of an
individual’s service selected by the eligible employees
themselves (the pension was previously 40% of final
salary after a minimum 15 years of service).
49. Final Remarks
• 20 years of system building
• Flexibility of system
• Role of international organisations
