15th regular session of the Government of the Republic of Slovenia
Dearness allowance for families entitled to child benefit
The Government adopted the draft act on temporary measures to mitigate the consequences of price increases for the beneficiaries of child benefit, on the basis of which families with children, who are entitled to child benefit, will be receiving dearness allowance for three months. The purpose of the measure is to improve the social security of families with children, as one of the most vulnerable groups of citizens, whose material situation has been worsening due to the general price increases.
The beneficiaries will not be obliged to file applications for the receipt of dearness allowance. The fulfilment of the conditions will be examined on the basis of a valid decision on child benefit in the period from 1 October 2022 to 31 January 2023. The dearness allowance will be paid out three times, i. e. in November 2022, December 2022, and January 2023 in the amount of child benefit for the first child in an individual income bracket, in which the beneficiary has been classified, for each child. The dearness allowance will not be included in income when exercising the rights as per the act governing the rights from public funds, and it will also not be subject to income tax.
The financial consequences of the measure will amount to EUR 63 million. The Government will submit the draft act to be discussed by the National Assembly as per the urgent procedure.
The Autumn Economic Forecast
The Autumn forecast of economic trends 2022, which was prepared by the Office of Macroeconomic Analysis and Development (UMAR) and which was presented to the government at today's meeting, foresees slightly higher growth for this year than in the spring forecast, mainly due to favorable trends in the first half of the year. By the end of the year and in the first half of 2023, the growth of economic activity is expected to moderate.
The Government asks the Fiscal Council to provide an assessment of the existence of exceptional circumstances
The Government asked the Fiscal Council of the Republic of Slovenia to assess the existence of exceptional circumstances in 2023.
The Fiscal Council gave its assessment of the existence of exceptional circumstances for 2021 and 2022. Prior to drafting the Ordinance amending the Ordinance on the framework for the preparation of the general government budget for the 2022–2024 period in the section referring to 2023 and 2024, the draft amending the state budget for 2023 and the draft state budget for 2024, the Government again asked the Fiscal Council to prepare an assessment of the existence of exceptional circumstances in 2023.
In its request, the Government referred to the communications of the European Commission regarding the 2022 European Semester Spring Package, in which the Commission acknowledged that the European economy had already attained robust economic growth following the crisis caused by the COVID-19 epidemic, but the anticipated recovery was slowed down by the consequences of the war in Ukraine. In the light of uncertainties which, primarily no longer arise from the COVID-19 epidemic, but the war in Ukraine, inflationary pressures and disturbances in global supply chains, the Commission assessed that the European Union had not yet emerged from the so-called risk of a severe economic downturn. On this basis, it confirmed further activation of the general escape clause in 2023, which will enable continued temporary derogation from the fiscal rules of the European Union.
The situation and uncertainties due to the energy crisis, inflation and the war in Ukraine have further escalated since the aforementioned communication of the European Commission. The countries of the European Union are intensively seeking alternative sources and simultaneously adopting significant measures to help households and companies alleviate the impact of price increases.
The fact is that the situation has changed to such an extent that fiscal objectives will have to be adjusted several times. It is also certain that a medium-term fiscal strategy for attaining medium-term balance of public finances will have to be drafted after the cessation of exceptional circumstances, as stipulated by the Fiscal Rule Act. At that time, it will be necessary to set new objectives when preparing general government budgets and prepare a programme of measures for their attainment. It will not be possible to ensure the observance of the medium-term balance without preparing a multi-annual programme for the elimination of derogations and without endangering the recovery attained after the crisis.