Amidst ongoing progress and societal change, the 21st century marks a pivotal era of social transformation - one in which social protection systems play a vital role in protecting individuals from life-cycle risks. Countries are increasingly adopting a multifaceted approach to social protection, combining financial support, educational initiatives, in-kind assistance, and tailored services designed to mitigate social inequality and protect individuals against socioeconomic shocks throughout various life stages.
It is worth mentioning that the social protection system in Georgia encompasses a range of programs that provide cash transfers, in-kind assistance (such as food vouchers and auxiliary means for people with disabilities), and services tailored to various target groups. While the broader field of social protection encompasses diverse interventions, this article concentrates on those services and programs that deliver financial assistance.
Since its independence, Georgia has experienced profound political and economic transformation that has significantly influenced the evolution of its social protection landscape. As social systems are intrinsically linked to a country's economic conditions and revenue capacity, and developments in this sphere have played a pivotal role in shaping and restructuring the social support systems over the years. A review of Georgia’s post-independence trajectory reveals a dynamic progression of its system, and a total of three distinct phases of development could be differentiated.
Stage I – The Collapse of Political, Economic, and Social Systems in Georgia
The systemic changes that occurred in the 1990s marked a turbulent period in Georgia’s development, with profound repercussions across all facets of national life, including the social protection system. In the wake of economic destabilization and collapse, reforms to the social protection systems unfolded along two principal trajectories:
- Reduction in retirement expenditures - cash transfers to pensioners have been reduced and the retirement age threshold has been increased to 65 for men and 60 for women (previously the retirement age was 60 for men and 55 for women).
- The criteria for receiving assistance for people with disabilities have become more stringent.[1]
Stage II – Expansion and Diversification of Social Protection Programs Providing Cash Transfers
A new phase of social protection reform began in Georgia in 2003, driven by a series of economic measures that gradually decreased informal employment and increased public revenues. These fiscal improvements created a more favorable environment for expanding and reorganizing the country’s social protection system. While the period before 2003 was characterized by declining social expenditure, the following years saw a steady increase in spending on social protection programs, diversification of their content and scope, and expansion of their geographic reach, which continues today. Among the reforms implemented, the following changes stand out:
- In 2005, the Parliament of Georgia adopted the Law of Georgia on State Pensions, which abolished the contributory pension system and replaced it with a tax-funded pension system that was universal and provided lump-sum benefits to all pensioners. In addition, 84 different pension categories were consolidated into 4 principal categories: the elderly, the disabled, survivors, and victims of Soviet repressions.[2]
- In 2006, the Government of Georgia launched a targeted social assistance program aimed at delivering benefits to eligible households based on scores generated through the Proxy Means Test (PMT), which relies on structured assessments of household circumstances. In 2015, child benefit assistance was added to the targeted social assistance program.[3] Within the framework of targeted social assistance, a unified database of socially vulnerable families was created, where the household PMT scores correlate with the level of vulnerability - the lower the score, the greater the assessed vulnerability. Over time, the methodology used for family assessments has undergone substantial reform, various vulnerability indicators were integrated, and it became more tailored to supporting and strengthening families with children. Despite critiques surrounding the precision and inclusiveness of the family assessment methodology, it remains a significant tool for identifying families and populations living below the poverty line. Correspondingly, PMT scores generated through family assessments have transcended their original function, becoming a key eligibility criterion for accessing a broad spectrum of national and municipal social protection programs.[4]
- Although targeted social assistance and the universal old-age pension remain the most widely utilized and well-known programs in Georgia, a range of categorical programs have gradually been introduced to address the needs of specific population groups. Notably, in 2015, the Parliament of Georgia adopted the Law of Georgia on the Development of High Mountainous Regions, establishing tailored allowances and benefits for individuals residing in designated settlement areas.[5] In 2014, the Government of Georgia issued Decree No. 418, which initiated the Targeted State Program for Promoting the Demographic Situation - an effort aimed at addressing population dynamics through focused social support measures.[6]
In 2018, Georgia’s social protection system entered a new phase of development, which implied the introduction of contribution-based mechanisms in the policy landscape. Within the framework of this system, individuals enrolled in the pension scheme contribute 2% of their income to a designated pension fund. Due to escalating fiscal pressures associated with universal old-age pensions, low birth rates, population aging, and increasing migration trends, the initiation of a new model can be considered an effective step forward. In addition, European practice suggests that such systems are more effective in ensuring adequate living standards for older populations while simultaneously easing the fiscal burden on public budgets, thereby creating fiscal space to invest in other social programs.[7]
Social protection is a multidimensional policy domain dedicated to empowering diverse societal groups and shielding them from life-cycle risks through targeted support mechanisms. In today's rapidly changing world, the essence of social protection remains the same, but the circumstances, context, challenges, and approaches that could be used for protecting and enabling vulnerable populations, as well as fostering desired social and demographic changes, are undergoing significant transformation.
Currently, a variety of programs have been implemented in Georgia that provide cash transfers to distinct population groups, and other targeted programs also operate. If we focus exclusively on cash assistance, it should be noted that the only component unknown to the Georgian model of social protection is unemployment benefits/insurance, which is a social protection program tailored to the needs of the work-age population. Presently, maternity leave constitutes the sole social protection program addressing the needs of this specific age group. The only precedent for the provision of unemployment benefits in Georgia was recorded during the COVID-19 pandemic, when people who lost their jobs received temporary benefits from the government for 6 months. European practice demonstrates that unemployment benefits serve as a vital macroeconomic stabilizer, effectively offsetting demand loss during periods of crisis.[8] Beyond their counter-cyclical function, such benefits constitute a preventive component of social protection - an area notably underdeveloped within the current system in Georgia. A well-functioning unemployment insurance system represents a preventive social protection program that protects individuals from falling below the poverty line after losing their jobs and promotes sustained engagement with the labor market by preserving incentives for re-employment.
Across European systems, unemployment insurance schemes are typically structured around dedicated, contribution-based funds, jointly financed by employers and employees. Individuals who lose their jobs are entitled to temporary financial support from these funds, with benefit amounts linked to their previous earnings and contribution history. The duration of assistance varies across countries - each country issues unemployment insurance for a varying period.
Due to Georgia’s socio-political context, the introduction of unemployment benefits constitutes a vital preventive mechanism for curbing the expansion of poverty, particularly in relation to the protection of the working-age population. However, the effective implementation of such a system has certain prerequisites and difficulties. Notably, persistent high unemployment rates, the widespread prevalence of informal labor, and the extended duration of joblessness pose significant barriers to operationalizing a comprehensive unemployment benefit scheme. Moreover, the design of such a program would necessitate the active integration of educational and coaching components into the broader social protection framework, as well as substantive institutional restructuring, enabling the system to support citizens’ reintegration into the labour market - not merely provide compensation."
[1] ESCAP, 2023, gv. 10
[2] International Social security Reviw, 2017, P. 56
[3] ESCAP, 2023, gv. 10
[4] ESCAP, 2023, gv. 10
[5] https://matsne.gov.ge/ka/document/view/2924386?publication=7
[6] https://matsne.gov.ge/ka/document/view/2382560?publication=0
[7] ბრიდრიხ ებერტის ფონდი, სოციალური დაცვა საქართველოში. გვერდი 5.
[8] სოციალური დაცვა საქართველოში, ფრიხრიხ ებერტის ფონდი.
