The social contract, one of the state aid instruments, helped a sizable portion of Russians rise above the poverty line. This finding comes from a report by the Chamber of Accounts summarized by RBC and reflects the program known as Social Assistance to Citizens.
Evidence of the program’s impact shows that participants who engaged in the social contract were able to surpass the poverty threshold, underscoring the initiative’s reach. In 2021, auditors noted that the program achieved its target to reduce poverty by 22 percent through the social contract. The report also indicates that in 2022 the trend not only continued but exceeded expectations, pointing to ongoing positive outcomes.
Auditors estimated that about 59 percent of the population experienced a favorable direction in their incomes, suggesting a broad influence of the policy across income groups.
Additionally, the Chamber of Accounts highlighted that the largest share of social contracts pertained to job seeking. Approximately 39 percent of Russians entered into agreements with social security authorities as they sought employment opportunities.
A social contract is an arrangement between social security authorities and citizens or families whose income falls below the minimum living standards. The contract uses the last three months of each household member’s income to determine the average per capita income. Under the program, beneficiaries may receive cash payments, help with purchasing essential goods, and commit to retraining or finding employment. There is also support for starting a business or developing an individual enterprise.
Among the cash benefits, the program can provide substantial sums for entrepreneurship. The largest single payment for starting a business can reach up to three hundred fifty thousand rubles, with the state contributing up to two hundred thousand rubles for venture development. The program also allocates resources for the development of personal plots and, in cases of difficult life circumstances, offers one time or ongoing monthly support to individuals and families.
As described in the observers’ assessment, the social contract operates as a targeted social insurance mechanism designed to stabilize household incomes, promote employment, and encourage self-sufficiency. The framework emphasizes practical assistance alongside incentives for workforce participation, education, and potential business creation. The findings from the Chamber of Accounts provide a snapshot of the program’s performance and its role in broader poverty reduction efforts, while also noting areas for ongoing monitoring and refinement. Citation: Chamber of Accounts.