Transfer payments are social forms of consumption, a form of unilateral redistribution of purchasing power, income in the society in the form of subsidies in favor of needy citizens, private entrepreneurs in order to support certain categories of legal entities and population.
Transfer payments
This is a one-time allowance or a monthly transfer of financial resources from the budget that the state produces in favor of the needy specified members of the company.
Funding is also carried out at the expense of part of the national income, tax revenues to the needy social groups in the society in the form of compensation, free transfer of services and goods.
Such transfer payments (gratuitous payments) are made by the government under adverse economic factors. They partially or fully meet the needs of the most needy sections of society in maintaining disabled family members, housing, health, culture, and education. Transfer payments are not sent to the development of production.
Types of Transfer Payments
State transfer payments: subsidies for social needs are presented to low-income categories of citizens who have serious financial problems.
Social Security Benefits
Executive authorities provide the necessary assistance to disabled citizens.
Such transfer payments are comprehensive support for all categories of people who have lost the ability to work. They receive regular sponsorship: gifts, unemployment benefits pensions.
What do government transfer payments include? Young citizens receiving vocational education have significant support from the state: they are paid scholarships. Citizens of retirement age live off compulsory social insurance getting various types of pension by old age.
A social disability pension is assigned to various categories of people with disabilities in order to support them. These individuals have the opportunity to live with dignity thanks to transfer payments, state pension provision.
Caring for disabled citizens is an important function of the state
For large families, many benefits are provided:
- Regional and federal laws provide for compensation payments to this low-income segment of society. This is a real help for a mini-society with three or more children under the age of 18.
- Free meals in educational institutions, visits to cultural facilities and the issuance of prescription drugs, preferential admission to preschool institutions, reimbursement of transport costs, free provision of school uniforms - all this is done at the expense of the state budget.
Veterans receive a variety of payments:
- Installed at the federal level benefits to labor veterans. The set of social services includes one-time and monthly cash benefits, benefits and compensation for paying for telephone communications, urban social services, housing, travel to the place of treatment.
- The volume of social services varies for each category of war veterans. The greatest privileges, monthly cash benefits, extended pension rights, benefits and compensation are participants in the Second World War.
- Obtaining free housing, extraordinary medical care at the expense of the state, compensation for the payment of funeral services is the state's concern, transfer payments.Gratuitous payments to the population is a priority article of state policy.
- Veteran payments, pension benefits in accordance with the law - such transfer payments are provided for other categories of war veterans, labor and home front workers. Caring for combatants is a priority for executive and legislative bodies.
Financing Startup Entrepreneurs
The leadership of the country is seriously interested in the development of small business.
Under the program of business support from the federal budget is sponsoring business activities. All regions of the country at the legislative level are involved in the implementation of the state program.
As part of this policy:
- To support social entrepreneurship through government funding, transfer payments are used. Their types are different. Depending on the region, the size of the subsidy varies.
- Any unemployed citizen of the country has a legal right to support the state. Businessmen who open their own business are provided with information and consulting support.
- Start-up entrepreneurs who start their own business are granted subsidies on an irrevocable basis. With a competent business plan, which sets out information about the planned activity, you need to contact the government.
The state compensates:
- Acquisition of innovative competitive technology.
- Implementation of promising management systems, part of rental payments, license fees.
- The cost of acquiring software, training employees, purchasing raw materials and necessary materials.
Public debt service
Interest is accrued on public debt.
Transfer payments are paid. Gratuitous payments go to banks and citizens who have purchased government securities in pension funds.
Private Transfer Payments
Many wealthy people from noble motives sponsor schools, orphanages, and relatives. They make private donations for the treatment of disadvantaged and poor fellow citizens.
In the development of art and science, material assistance is often provided free of charge from personal funds.
Almost 80% of students can not do without the support of loved ones. Parents and other relatives often provide financial assistance to needy young people who receive professional education in an educational institution.
To avoid impoverishment of certain segments of the population, the state pursues a reasonable macroeconomic policy. Income inequality in society is reduced due to transfer payments. Tax revenues received by the state are redistributed as transfer payments in kind or in cash. Socio-economic contradictions due to such payments are significantly smoothed out.
