Parties’ pledges to the social protection system
K2.0 analyzes election programs.
The social protection system in Kosovo is a patchwork pieced together over many years. While the redesign of social protection began with the pension scheme in 2001, the system gradually expanded through new regulations to include schemes with varying criteria for receiving financial support from the state budget.
Today, this system consists of 22 unique schemes, including the social assistance scheme, programs for paraplegic and tetraplegic individuals, support for war-related groups like veterans, families of deceased soldiers and victims of sexual violence during the war.
The social protection system is expected to actively alleviate poverty, enhance citizens’ skills and opportunities for labor market integration and boost economic productivity. This usually involves four key pillars: social assistance, social services, social insurance and labor market programs. In Kosovo, policymakers focus primarily on financial support in the form of transfers, while social insurance and labor market programs are largely ignored.
Financial support in Kosovo targets various social groups through its various t schemes. For example, the social assistance scheme focuses on targeting poverty and serves as a temporary measure to help beneficiaries with social mobility. It works in coordination with other state programs such as training and wage subsidies.
Meanwhile, the scheme for people with disabilities targets individuals whose disabilities may make it difficult for them to secure employment. These schemes are only available until the beneficiary gains employment.
Over the years, the job eligibility requirement, tied to access to certain social schemes, has contributed to the informal labor market’s persistence. Many beneficiaries of these schemes work without formal employment contracts to avoid losing financial support from the state. There is frequent debate about the restriction of benefiting from two or more schemes simultaneously, for instance the basic pension scheme and another scheme like the one for victims of wartime sexual violence.
As currently designed, the financial support provided through these schemes functions more as a survival tool than as a mechanism for comprehensive social protection or a means to promote social mobility.
The failure to address systemic issues and frequent introduction of separate schemes is often described as “buying social peace.” In an effort to accommodate various groups, the system has evolved into a patchwork of schemes. While there have not been any efforts to reform the social protection system as a whole, several governments in Kosovo have proposed reforms to the social assistance scheme.
The only scheme specifically targeting poverty and aiming to alleviate it, the social assistance scheme, is among those that least adequately cover its intended beneficiaries. The World Bank’s main criticisms of the scheme are that it excludes some citizens in need, discourages employment by removing eligibility when a family member gains employment and provides amounts that are insufficient to meet beneficiaries’ needs.
The social assistance scheme supports approximately 18,000 families. However, from the 500 million euros allocated from the state budget to all 22 schemes, only about 40 million euros are directed to the social assistance scheme (prior to the increase in October 2024). Though the number of beneficiary families decreased by 10% from 2023 to 2024, the current social assistance scheme fails to cover all poor families.
According to the World Bank’s 2022 report on Kosovo, while about 7% of the total population benefits from the social assistance scheme, the official poverty rate is approximately 20%. This means that only one in three individuals living in poverty receives social assistance through this scheme.
Under the social assistance scheme, individuals may receive up to 60 euros a month, while families up to 15 members may only receive 180 euros. The beneficiary also receives subsidiaries of five euros per child under the age of 18.
Since the postwar period in Kosovo, all governments have consistently increased the benefits provided through these schemes. They also have repeatedly failed to address the system’s root problems.
Tackling these issues would allow for broader coverage of citizens in need by improving, targeting and creating sustainable policies aimed at increasing social mobility. In this context, state financial support would serve not just as a means of survival, but as a tool for empowerment and long-term progress.
Law on the social assistance scheme
In the Western Balkans, unemployment funds act as social safety nets. These funds are typically financed and maintained through contributions deducted from the earnings of workers and employers. Unemployment benefits are provided to individuals who have lost their jobs in the formal sector, compensating for the temporary loss of income while they search for new employment.
Eligibility criteria for unemployment benefits vary by country. In Montenegro, individuals must have been formally employed for at least nine months continuously or intermittently within the last 18 months. In Albania and Serbia, a minimum contribution period of 12 months is required. The duration of benefits also differs. In Bosnia and Herzegovina, individuals can receive benefits for up to 24 months, while in other countries in the region, the maximum duration is 12 months, depending on the contribution period. The benefit amount is calculated either as a ratio of the minimum wage or as a percentage of the individual’s income from recent months.
None of the parties running in the February 9 elections has presented a vision for reforming the system as a whole to provide more accessible social protection for various social groups. The election programs include scattered promises and commitments for a few specific schemes, while some propose new schemes but largely maintain the existing ones.
The introduction of an unemployment fund or unemployment insurance is included in the election programs of the three largest opposition parties — the Democratic Party of Kosovo (PDK), the Democratic League of Kosovo (LDK) and the Alliance for the Future of Kosovo (AAK), who are running in coalition with the Social Democratic Initiative. This would be a new development for Kosovo, even as all other countries in the region have it.
Ahead of the 2025 general elections, K2.0 analyzed these three political parties’ plans. Vetëvendosje (VV) has not yet published its election program. Therefore, K2.0 analyzed the steps VV took during their four years in government to evaluate what a potential second term might bring if the party is re-elected.
VV’s orientation over the last four years
Over the past four years, the government has not implemented a comprehensive reform of the system. It has focused solely on the social assistance scheme, limiting its actions on several others to increasing the amounts that beneficiaries receive.
VV launched a pilot reform of the social assistance scheme with support from the World Bank. This involved small-scale testing to assess its effectiveness and identify potential improvements before full implementation.
Assessing the poverty levels of 1,824 families, the reforms would determine whether the families’ actual economic situation aligns with their declared one; discrepancies between the two have not been uncommon. The reform also aims to offer support for integrating those families into the labor market.
This reform also removes two criteria established by the 2003 Social Assistance Law, which excludes families from the scheme if they no longer had children under the age of five or if they had an employed family member. These criteria have often left hundreds of poor families without access to the scheme. The pilot scheme envisions poverty as the primary criterion for accessing the scheme, regardless of whether the family has any employed members.
The changes will affect only these 1,824 families, a small portion of the 18,226 families who benefited from this scheme in November 2024. The government will subsidize 70% of the gross salary, up to 350 euros per month, for six months for an employed member of the participating families. Employers who keep these workers for an additional six months will receive a one-time bonus equal to 20% of the worker’s average salary during that second six-month period.
However, the path to fully reforming the social assistance scheme remains lengthy, as shown by the long process of finalizing the pilot agreement. VV signed a 47 million euro loan with the World Bank in October 2021, after requesting financial support and expertise to reform the scheme.
It took an additional three years for the agreement to be ratified in the Kosovo Assembly, as opposition parties opposed it on the grounds that VV planned to use 43 million euros of the loan to cover direct payments to beneficiaries. At the time, the GAP Institute in Kosovo warned that using a loan for such purposes could set a harmful precedent for managing public finances in the future.
The loan provided by the World Bank covers only the small-scale pilot phase of the form and additional funding is still required to extend it to all families in need and to implement a full reform. VV has not published a plan that would lead to a comprehensive reform of the scheme beyond the pilot.
Another of the current government’s initiatives, the Government for Families program, was aimed at families without employed members. It was launched in 2022 as part of the government’s Economic Recovery Package. Through this initiative, 70% of the gross salary, up to 300 euros per month, was subsidized for six months for one employed family member.
According to the government, 4,100 families have benefited from this measure. This may explain, in part, the 10% decrease in the number of families benefiting from the social assistance scheme since 2023, as families with an employed member are no longer eligible.
Although this policy introduced one of the fundamental elements of social protection, its sustainability within the overall social protection system is difficult to assess unless other elements — like comprehensive reform of social assistance, social services and social insurance — are also addressed.
Beyond this policy and piloting the social assistance scheme reform, VV has taken steps to increase the amounts provided to citizens through state-funded schemes. VV implemented two such interventions during its mandate.
The first occurred in 2022, when it decided that all pensions below 100 euros would be increased to 100 euros. This increase affected four programs in total: the basic pension, which was previously 90 euros, along with three others — the disability pension, which was 74 euros, the family pension and the work disability pension, which was 90 euros.
The second intervention occurred in October 2024, when the government pledged to increase financial support by 20% across all schemes in the social protection system. This decision raised these schemes’ budget from 500 to 600 million euros. But despite this increase, nothing changed with the social assistance scheme.
VV has also provided one-time assistance of 100 euros to pensioners and social assistance beneficiaries on several occasions during its mandate. The current prime minister and VV candidate, Albin Kurti, has pledged to pursue reforms to state-funded schemes during a potential next term, without providing specific details.
VV’s actions in this area as the ruling party over the past four years suggest two possible directions for a second term: the first involves ad-hoc interventions to increase the financial support citizens receive from state-funded schemes, while the second points to a partial reform of the social protection system, which would fall short of a comprehensive overhaul.
LDK election program
LDK does not propose comprehensive reform of the current social protection system, but suggests measures for existing schemes and introduces new social protection schemes. LDK proposes reorganizing social protection by categorizing it into four pillars, referred to as “pension architecture” reform. However, based on the design of these pillars, it is evident that no radical reform of state-funded schemes is planned.
For example, the first pillar, Pillar A, continues to cover all schemes financed by the state budget and regulated by special laws — namely, the 22 existing schemes (except for the basic pension, which LDK plans to reform, as elaborated below). Pillars A, C and D would maintain the pension system’s current structure. Pillar C would also include mandatory pension contributions, while Pillar D would include voluntary pensions and health insurance available on the market.
The main changes are proposed in Pillar B, in which LDK introduces social insurance, covering areas such as old-age pensions, work disability, family support, parental protection, unemployment protection and sick leave. To fund Pillar B, LDK plans to establish an additional contribution for each employee and employer in Kosovo, ranging from 1.5% to 2.5%. However, LDK emphasizes the need for reforms toward formalizing the labor market before the pension architecture reforms take place.
A fundamental change proposed by LDK is the shift from the basic old-age pension to Pillar B, which would be funded through additional contributions from employers and employees rather than being entirely covered by the state budget. This shift could reintroduce the well-known and widely applied pension model known as Pay As You Go (PAYG).
Under PAYG, in the spirit of intergenerational solidarity, the current working generation pays for the retired generation’s pensions, while the current generation’s pensions will be covered by the next generation. This model alleviates the financial burden on the state budget, which is important given the growing aging population.
PDK election program & AAK-led coalition
PDK does not commit to fully reforming the social protection system. Instead, the party’s pledges focus on a large number of services within existing schemes, specifically the basic pension, the veterans’ pension and support for families of deceased soldiers as well as social assistance. PDK proposes an increase in pension for the first two schemes, while in the case of social assistance, they introduce an adjacent program that, according to PDK, will be integrated into this scheme.
PDK promises to increase the basic old-age pension from 120 to 200 euros and raise contributory pensions by 30%. Another priority for PDK is supporting veterans and their families. According to PDK, support for war-related groups, including families of deceased soldiers, veterans and war invalids, will increase by 50%.
Currently, war veterans are required to choose only one scheme to benefit from. For instance, a citizen who has reached retirement age must choose between the basic old-age pension or benefits from other schemes. PDK promises to eliminate this restriction, allowing individuals to simultaneously receive pensions from two schemes.
Similarly, PDK pledges to remove restrictions for veterans who are ineligible for financial assistance because they are employed. According to PDK, this change would encourage full participation in the labor market. Yet these measures focus on increasing the total amount of benefits while failing to present a sustainable vision for the social support of these groups.
Even within the social assistance scheme, PDK promises a 50% increase in financial support for eligible families. Through the “get out of social” program — a phrase that risks reinforcing the stigma of citizens benefiting from this scheme — PDK pledges to encourage beneficiaries to integrate into the labor market.
The program covers costs for travel and training and provides employment subsidies. Its specific focus on promoting employment through labor market training could help address the lack of preparation highlighted in the 2019 World Bank report.
According to the report, those eligible for social assistance face significant challenges in integrating into the labor market. World Bank data shows that 97.5% of beneficiaries lack work experience, three-quarters have only primary or no education and nearly 80% have been unemployed for over four years.
The AAK-led coalition does not plan to reform the existing social welfare system beyond increasing the amounts beneficiaries receive. AAK promises to expand the fund for pensions and social assistance through other economic interventions but does not provide exact details beyond general promises.
AAK pledges to raise old-age pensions to match the minimum wage, which it promises to increase to 500 euros. Special attention will be given to war-related groups, addressed through a dedicated law, allowing veterans to work without losing their pension rights. For families without employed members, AAK commits to providing monthly support of 300 euros to promote these families’ economic and social stability.
Like LDK, both PDK and AAK have proposed creating an unemployment fund — in the case of LDK, unemployment insurance. PDK and LDK plan its funding through contributions from employers and employees, while AAK proposes covering it through the state budget.
Unemployment Benefit
The Law on the Social Assistance Scheme, adopted in 2003, identifies two groups of families eligible to apply for social assistance. The first includes families in which all members are dependent and unable to work. The second includes families with an unemployed member who is able to work, or they have at least one child under five years old or an orphan under 15 years old in their care. According to the World Bank, the unemployment criterion, combined with the informal economy’s prevalence, has led some eligible in the second category to seek unable to work status in order to move to the first category and maintain their assistance.
Although unemployment insurance is an essential step in social protection, its effectiveness in Kosovo may largely depend on reducing the informal labor market. According to a recent study by the Center for Information, Criticism and Action, in 2024, approximately 42% of workers in Kosovo worked without contracts. If unemployment insurance is implemented, only formal workers would be eligible to benefit from it.
What can we learn from these electoral programs?
None of the major political parties competing in these elections have committed to comprehensive reform of the social protection system. While VV has promised comprehensive pension system reforms in the next government term, it took nearly three years for the Kosovo Assembly to ratify an agreement to pilot reform of just one scheme. Additionally, VV has yet to publish its election program, apart from these promises.
Meanwhile, LDK pledges to restructure the social protection system by introducing social insurance and removing the basic pension’s reliance on the state budget. It does not propose any reforms to the current schemes.
Similarly, PDK does not envision a comprehensive reform of the social protection system. The AAK-Nisma coalition also limits its proposals to increasing benefit amounts and removing eligibility criteria for certain schemes.
A positive aspect of the three opposition parties’ programs is their pledge to establish an unemployment fund, in the case of PDK and AAK, or unemployment insurance, in the case of LDK. Achieving this will require sustained efforts to formalize the labor market.
Feature Image: K2.0.
Want to support our journalism?
At Kosovo 2.0, we strive to be a pillar of independent, high-quality journalism in an era where it’s increasingly challenging to maintain such standards and fearlessly pursue truth and accountability. To ensure our continued independence, we are introducing HIVE, our new membership model that offers an opportunity for anyone who values our journalism to contribute and become part of our mission.
Become a member of HIVE or consider making a donation.
-
- This story was originally written in Albanian.