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 APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200070023-3

Social security benefits are generally liberal in comparison with the average wage and have afforded a relatively high degree of security to those who follow the pattern of economic activity imposed by the regime. A family budget survey conducted in the late 1960's showed that 87.1% of annual income in wage- or salary-earners' families (excluding agriculture) was derived from base pay and supplemental payments; another 8.4% from social security payments (family allowances, sick pay, maternity grants, old-age, disability, and survivors' pensions), unemployment or public assistance benefits, and scholarships; and 4.5% from property sales, rents, prizes, gifts, and so forth. In low-income families, social security payments and other "social benefits" assumed even more importance, accounting for 10% to 15% of family income in households of 12,000 zlotys or less per year.

Although the expanded system has resulted in some nominal economic gains by the workers since World War II, it has also been transformed into an instrument of the government's economic and social policies. The system has thus been used for raising or lowering incentives among different categories of workers and social classes. Higher benefits, for example, are afforded to exemplary workers and to those certain high-priority and traditionally favored sectors such as mining and construction. In mid-1952 old-age pension coverage was extended to members of collective farms and their families as an apparent incentive—largely ineffective—for private peasants to join collectives. Similarly, the law of 29 March 1965 extended social security coverage to all persons and their families engaged in private handicrafts and services, in line with the government's policy of inducing a portion of the labor surplus to enter private service occupations, especially in rural areas. Although there are no legal provisions for withdrawing social security benefits from "undesirables," the firing of an employee normally results in annulment of his social security coverage. Changes instituted in the system by the Gierek regime are in part designed to reduce its discriminatory aspects, and to deflect former charges that it is a tool of political, economic, and social policy. In general, however, the postwar welfare state has won wide popular approval, although the majority of the population views the government's policy in the field of public welfare as an expansion of an already existing concept rather than an innovation of a new social order.

The determination and drafting of government policy on social insurance matters was vested in the government Committee on Labor and Wages in coordination with the Ministry of Health and Social Welfare until March 1972, when a governmental reorganization upgraded the committee to ministerial rank. Since then social insurance matters have been within the purview of the new Ministry of Labor, Wages, and Social Affairs, coordinated as before with the Ministry of Health and Social Welfare, and implemented administratively through the Social Insurance Administration. The organization of the latter agency parallels that of the trade unions, through which it works down to the local level. Auxiliary agencies in charge of social insurance attached to local trade union units are responsible for the actual adjustment of insurance claims. Bookkeeping and other work are usually done by the staff of the individual enterprise, which bears the administrative costs involved. Disputes arising under the social insurance system are adjudicated by regional and local social insurance courts in the first instance and by the social insurance tribunal, a component chamber of the Supreme Court in Warsaw, acting as a court of final appeal.

In 1970 the state contributed about 85% of the total cost, and the remainder was borne by the individual enterprise. Until 1968, when a reform of pension insurance resulted in changes in the methods of accounting of pension insurance receipts and outlays, all categories of social insurance were specified in the annual state budget. Total budgetary expenditures for social insurance as a percentage of the national budget rose steadily throughout the 1950's, but after 1958 they generally remained stable in a range of 10% to 12%. In 1970 this was the equivalent of about US$1 billion. This figure is likely to have risen substantially since the implementation by the Gierek regime of the expansion of social insurance coverage as well as the raising of average payments. (The cost of providing medical care, as distinct from sickness and maternity benefits payable during hospitalization, is not included in the expenditures for social security insurance since it is a component, not separately identified, of budgetary allocations for the public health system as a whole.)

In January 1968, a 2-year, three-stage reform of the pension program was initiated by the government in concert with the trade unions. The need for new legislation had long been recognized, since the low ceilings set on many categories of pensions by the previous law of 1954 had been outpaced by rises in average wages and the cost of living, and interim stopgap legislation had become excessively cumbersome and ineffective. The new law thus provided for substantially higher average pensions, financed not only by the state and the enterprise as hitherto, but

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APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200070023-3