In modern life, we often come across such a concept as subsidies. It is known that this is financial assistance from the state. We will examine in more detail what subsidies are, how they differ from subsidies, who is entitled to such payments, and how to receive them.
The meaning of the term
So what is a subsidy? This is a cash allowance that is paid from the state budget to enterprises, organizations, local authorities, individuals in order to compensate for losses incurred, free of charge and irrevocably. The meaning of the word "subsidy" in translation from medieval Latin dotatio is "gift", "donation".
Such payments bring significant benefits to the economy and help certain segments of the population, but this coin has another side. Since the state budget is spent for these purposes, this can lead to a deficit. There is not enough money in the treasury, which means that you need to replenish it. A solution to the problem is the issue, due to which the state currency depreciates. And then inflation occurs.
Budget Equalization Grants
Sources of income of municipalities are rather uneven. The level of receipt of funds in local government depends on the population of the administrative unit, the amount of land tax and property of individuals and legal entities. These incomes can differ by dozens, and sometimes hundreds of times.
Let’s figure out what the alignment subsidy is. The federal budget can allocate funds (transfers) to regional budgets, and they, in turn, to local ones, in the form of subsidies. The purpose of such payments is to equalize the financial security of municipalities. Subsidies are provided to local authorities to cover the difference between expenses and income.
Such transfers act as an additional source of replenishment of budget funds. The local authorities decide on their own responsibility about what they will be used for.
Such payments enable authorities to fulfill their duties in full and in due quality, regardless of how much tax revenues go to the treasury. They help narrow the gap between the budgets of different regions, leaving an incentive for their further independent development.
Subsidies provide predictability of the size of revenues to local budgets, which makes it possible to plan expenses. They guarantee the stability of the functioning of the system of self-government bodies of each administrative unit.
Subsidies and subsidies: what is the difference
Inter-budget transfers have several types. What is a subsidy, we already know. Its peculiarity is that it is provided for damages and does not have a special purpose.
Another type of transfers is a subsidy. Let's see what it is and what its features are.
The main distinguishing feature of the subsidy is its intended purpose. These funds cannot be used in other directions. The second difference is the share of the budget, which received the amount received.
For example, an object is being built in the region. The federal budget provides a subsidy for its financing. In this case, he pays part of the cost of the construction, and the second part is paid by the regional budget.
Payments to enterprises and organizations
Subsidies are provided mainly to manufacturers who are important for the economy, and their costs for the manufacture and sale of goods exceed the profit received. Funds are allocated by the state or local budget.
These payments do not have a strict purpose and are issued on an irrevocable basis. This measure helps enterprises avoid bankruptcy and increase retail prices for goods or services (partially covered by subsidies). Most of the payments, at present, are directed to the support of agriculture and science; cultural institutions. Grants are also provided to housing and communal enterprises, they regulate the cost of their services.
Such payments, for the most part, are intended for enterprises with state ownership. Private firms have to pay for themselves and finance themselves.
Protecting enterprises from bankruptcy, this measure preserves jobs for a large number of citizens, due to which the unemployment rate in the country decreases.
Payments to individuals
Grants may be intended for a specific employee, if it is not contrary to the law and stipulated in the employment contract. This may be a means to reimburse travel expenses to the place of work or food, as well as the maintenance of minor children.
Since some segments of the population are not able to pay utilities in full, the state partially covers these costs. This improves the financial situation of citizens and the state is cheaper than financing an enterprise - a provider of these services.
Government payments to certain segments of the population can be used to reimburse the cost of acquiring social goods or medicines. These include various benefits, as well as funding for organizations of veterans and communities with disabilities. Assistance can be provided on a monthly or one-time basis. Payments can be made in a fixed amount or change as necessary.
Who can be provided with state assistance?
Payments from the budget for the population are assigned in cases specified by law and are intended to support a specific person in a difficult financial situation, or members of his family. Assistance is provided to those most in need.
What subsidies are due to citizens? This is unemployment benefit if a person has lost his job and was registered with the employment service. People who have temporarily lost their ability to work are paid sick days if they have a sick leave. The state assists women in pregnancy and childbirth.
If the level of expenses increases in the family, one can also hope for cash payments. For example, in the case of a baby.
If someone has died in the family, relatives will receive financial assistance for burial.
Federal budgets provide support to citizens who have merit to the Fatherland and received ranks or awards. Veterans and disabled people can also count on subsidies; rehabilitated citizens; single pensioners; disabled people; large or poor families; orphans or left without one breadwinner; full-time students and children; people who care for a disabled person.
Where to go?
To receive a subsidy, you must contact the appropriate social security authorities or your employer. To do this, you need to collect a package of documents, which is established by applicable law.
To speed up and facilitate this process, it is better to contact the MFC at the place of residence. Center staff will assist in the preparation of all necessary certificates and will be able to calculate the estimated amount of benefits.