24.2.2022
EN
Official Journal of the European Union
L 45/1463 COMMISSION PILOT PROJECTS
CHAPTER PP 07 — INVESTING IN PEOPLE, SOCIAL COHESION AND VALUES (cont'd) PP 07 21
(cont'd)
PP 07 21 07
(cont'd) — support empowerment, notably through strategies of entrepreneurship and restored sense of dignity and agency, for bridging social isolation stemming from long-term poverty.
Using financial inclusion to give Roma access to the basic and vital services is as important a component of Roma inclusion as employment, housing, health or education.
Households that can access and understand basic financial services and handle a savings account are likely to use social benefits more productively.
Policymakers in cooperation with project management can link financial inclusion and personal and business development support with human development outcomes.
The pilot project:
The aim of this pilot project is, while respecting competencies and responsibilities of Member States in defining and organising their social protection systems, including the way in which benefits are distributed, to test an alternative delivery mechanism of welfare benefits, paid weekly under E-pay cards, combined with continuous empowerment through entrepreneurship and self-development coaching work and financial literacy trainings.
The BIG scheme is envisioned as the combination of existing welfare benefits, with allowances to cover for costs associated to the participation in capacity building activities, and incentives to beneficiaries for reaching the goals stipulated in their individual/family action plan.
It will be combined with measures, which help build the capacity of individuals to (re)integrate the labour market and society.
This could serve as steps of a ladder allowing individuals and families to restore their agency and progressively climb out of poverty circles.
The pilot project will directly support policy experimentation through testing an alternative approach to understanding and addressing poverty: — Security – living with a mind-set of scarcity and deprivation puts psychological pressure and constricts the mental bandwidth of persons living in deprivation, thereby preventing them from planning for the long-term or making better decisions in the now; — Expanded range of assets – emphasising poverty as more than a distributional (cash-poor) or material issue, seeing the relation to social isolation and access to a spectrum of ‘assets’ (material, skills, social and citizenship) to enable households to pursue new and more viable livelihood strategies; — ‘Human venturing’– investing in people as an alternative approach to benefit provisioning, essentially serving as ‘venture capital for the people’; and representing a new way for investing in human capacities (just as we do for companies) and breaking through socio-cultural environments.
In relation to the first issue, the policy experimentation is underlined by multi-country research showing that poor people receiving unconditional welfare benefits do not blow the money on desires rather than needs.
In relation to the second issue, it will help recipients of social benefits, especially vulnerable and socially excluded communities, to sustain different livelihood strategies in order to get out of the vicious circle of poverty and indebtedness.
It will also create the conditions for economic development and for improving the standards of living of the poorest.