Vouchers as a Social Benefit a Viable Solution for Municipalities, Aid Organizations

Analysis

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Last year's changes to social benefits legislation mean that local authorities now have a greater role to play in this area. It is therefore worth considering the use of cash-saving solutions in the social benefits sector, in particular vouchers, which can bring a number of benefits to both institutions and beneficiaries, payment solutions company Edenred says.

At the end of last year, there were significant changes to the rules on social benefits. The amendment adopted by the Parliament introduced a third - and final - step in the system of care for dependent persons. As a result, local authorities are playing a more prominent role in the care system than hitherto, significantly expanding the scope of their responsibilities.

"In the context of social benefits, it is important to bear in mind that the current legislation defines social assistance as a grant, whether in cash or in kind, provided to a socially deprived person without any payment being made in return. Thus, municipalities - and aid organizations active in the field of social care - can use electronic vouchers and vouchers to provide assistance, taking advantage of the benefits that this brings," said Tamás Szendrő, managing director of Edenred Hungary.

He added, "We would like to and can help in the field of social benefits, based on our experience of cooperation with municipalities and aid organizations, which has been based on mutual benefits."

The executive director recalled that, when granting social assistance, perhaps the most important aspect is to ensure that the assistance achieves its true purpose, i.e. that the beneficiary spends it on what he or she needs it for, and that the principle of good administration of justice, which is also an important factor in the granting of assistance, is respected in the limited use of vouchers.

The use of vouchers for the granting of aid has clear advantages for both the institutions concerned and the persons in need. For the former, it is certainly advantageous to have a targeted aid scheme that can be used for specific product ranges, can be introduced in a short time and involves a minimum administrative burden. And for the needy, the ability to spend the voucher on what they really need is an important advantage, while security and convenience are also important arguments in favor of these solutions.

"The Social and Health Department of the Municipality of Kőbánya uses Edenred vouchers to provide school and Christmas allowances, mainly because this form of benefit is a win-win solution for both the provider and the recipient," said Krisztina Ehrenberger, head of the human services department of the Municipality of Kőbánya.

The municipality, she added, has been providing school start grants to primary and secondary school pupils with a permanent address or residence in the X. district of Budapest since 2015. This school year, almost 4,500 pupils received the grant, the amount of which has just been increased from HUF 5,000 to HUF 8,000 from the 2022/23 school year.

"For several years, we have been giving Edenred vouchers to elderly people in our municipality to help them prepare for the holidays. The initiative proved to be very successful, the people concerned liked this solution, as they were free to use the money available to them and spend it on whatever they wanted," said Róbert Nagy, mayor of Sé, a village in Vas county.

"The Hungarian Charity Service of the Order of Malta introduced the Edenred solution into the donation system as a humanitarian card: our aim was to introduce a new form of support that is not paid in cash or via bank transfer. Another advantage of the pre-paid card issued by Mastercard is that it is a secure, transparent, and innovative solution, and the funds can be used for food, clothing, hygiene products, school supplies, medicine, and travel to Budapest for the beneficiaries fleeing the war," said Alpár Lázár, head of the resource center of the Hungarian Charity Service of the Order of Malta.

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