Budget Support for Active Aging Processes in the Context of the Sustainability of Public Finances

Abstract

The article is devoted to the problems of budget support of active aging processes and sustainability of public finances of Ukraine. This problem is urgent because of the accelerating pace of demographic aging, cross-country migration, limited budgetary resources, which in their totality increase the burden on the younger generation, create financial risks for the government and households. This problem remains out of research focus in spite of the rising need to increase budget expenditures, maintain the long-term sustainability of public finances, enforce new regulatory measures on the labor market and the health care system, provide social and educational services, and reduce the poverty among the elderly. New approaches to citizen support should be in line with the European norms, which, in their totality, contribute to the active longevity of the population, reduction of the tax burden, relief of the pressure on the next generations and continuity between generations. The financial support of social services provided to the elderly is analyzed, with identifying its problematic aspects. In order to improve approaches to financing social services, a Matrix of Choice of Social Services for Active Aging and Forms of Financing is constructed. To expand the sources of funding for active aging processes, it is proposed to introduce co-financing of selected social projects by government and businesses. It is substantiated that the Sustainable Development Goals, as well as the provisions of the Active Aging Strategy, should be consistent and taken into consideration in formulating social and budgetary policies that need to be based on the targets of the Active Aging Index. In order to implement the budget mechanism “money goes after a person”, aimed to enhance the targeting of social assistance programs, amendments to the Budget Code of Ukraine, the Economic Code of Ukraine, the Laws of Ukraine “On social services”, “On improving the accessibility and quality of health care in rural areas” are proposed. Recommendations on using the compensatory mechanisms to enhance the ability of the government to provide the adequate financial support for active aging without breaking the sustainability of public finances are elaborated.

Keywords

• demographic aging, active longevity, active aging index, budget support, health care and education expenditures, sustainability of public finances, compensatory mechanisms.