Threatened 30,000 families could lose their social benefits

Approximately 30,000 families could face reduced or lost social benefits due to changes in the valuation of real estate properties. The government has approved amendments to the law on mass property valuation, which will affect eligibility for various forms of financial assistance and support. These changes aim to ensure that individuals and families do not lose their entitlements solely because of increased property values over recent years.

The new regulations do not directly alter the methodology used to assess property values but impact the criteria for determining eligibility for social transfers and other public funds. Property value assessments influence access to annual benefits such as child supplements, state scholarships, reduced daycare fees, subsidies for small businesses, and meal subsidies, as well as monthly benefits including cash social aid, protective allowances, rent subsidies, health insurance contributions, and exemptions from paying for social services and standard housing and meals.

Previously, property valuations were based on data from March 2017, which had been recorded in the land registry. However, these figures would have been replaced by updated valuations from March 2025 starting July 31 this year. This change would have required reassessing existing wealth census data and adjusting them accordingly, a process that requires time. As a result, the Ministry of Demography proposed extending the period during which the older property values from 2017 would remain valid.

According to the ministry's estimates, approximately 3,000 households might lose their cash social aid or protective allowance, while more than 30,000 families could experience a reduction in their annual benefits. Nearly 13 percent of all families might suffer a decrease or loss of benefits. Specific details regarding how much each individual or family might be affected financially have not yet been disclosed.

In response to these potential impacts, the Ministry of Finance suggested delaying the implementation date for the new property valuations from March 2025 to January 31, 2028. This extension allows the social policy framework to adapt gradually to the new property valuations. By January 31, 2028, all decisions regarding social benefits will be made using data from March 2017, effectively using information that is more than ten years old.

By the end of this year, the Ministry of Demography plans to prepare an action plan aimed at initiating the use of data from the property valuation system when assessing individuals' material situations. This plan will facilitate a gradual transition to the new data once all organizational and technical requirements are met. The government has also allocated additional time to prepare systems for utilizing the updated property valuation data.

The proposed amendment does not affect the taxation of real estate. It specifically concerns the use of property valuation data in decisions regarding rights to public funds. Extending the transitional period means that the government will continue using property values from 2020 for the next two years while preparing systems for the updated valuation data. The transitional period, originally set to expire at the end of July, would have forced centers for social work to start using higher official property values from August onwards if the law had not been amended.

When determining eligibility for cash social aid, centers for social work consider both income and the assets of the applicant and their family. Regular, occasional, and sporadic incomes, real estate (excluding the home where the applicant actually lives), and movable assets such as vehicles, savings, securities, and shares are taken into account. If the total value of assets exceeds 13,780 euros, an individual or family typically does not qualify for cash social aid.