Between independence and the communist era, the Bulgarian government had used its social welfare funds mainly for government workers, army officers, white-collar workers, craftsmen, and tradesmen. The 1949 social welfare law founded a new social welfare system that endured into the 1990s. The new system greatly expanded the categories of people eligible and the amounts they could receive. The social welfare system in 1991 was largely based on the 1951 section of the Labor Code which regulated monetary compensation and supplements, and the 1957 Law on Pensions. Both laws were revised countless times and no longer agree with each other. The National Assembly delayed creation of a new law until the new constitution was ratified in the summer of 1991.
In 1991 two-thirds of Bulgaria's social welfare budget was spent on pensions; the rest went for monthly child-care allowances and other programs. As of late 1990, the Bulgarian government provided over 4 billion leva per year to 2,300,000 pensioners-- almost one fourth of the entire population. To keep pace with the rising cost of living in the transition to a Western economic system, the government had to index pensions several times in 1990. By the beginning of 1991, some 165 leva were being added monthly to every pension, casting doubt on the long-term possibility of maintaining the program. The ratio of Bulgaria's pensioners to its total population was the largest in the world, almost twice that of most Western countries. Because the society was aging, some experts declared that workers should be encouraged to remain in the work force and participate actively in society much longer than had been the practice under the communist regimes.
In early 1991, in a further effort to keep pace with the rising cost of living, the Council of Ministers established a new minimum wage and new subsidy levels for all social welfare programs. Anyone who had received the old monthly minimum wage of 165 leva would now be compensated 270 leva to provide for a new minimum wage of 435 leva. This minimum wage was subsequently changed three times in 1991, peaking at 518 leva. The 1991 program also gave 242 leva to pregnant or nursing women and to those on temporary workers' disability. Child-care compensation for households with children under three years of age was raised to 90 leva, with a monthly supplement of 100 leva per child. In 1991 several cost-of-living increases were added to those categories as well. In 1991 unemployment compensation was set at 270 leva per month; students over eighteen received 130 leva per month; graduate students, 230 leva. Those payments were funded from the state budget and from enterprise salary budgets, neither of which seemed adequate to keep pace with rapidly changing prices in 1991.
Under socialism all citizens who had been awarded the title "active fighter against fascism and capitalism" for military or civilian contributions in World War II received a large pension and special privileges such as free public transportation, free medical prescriptions, and free vacations at special resorts. After much controversy, those privileges were abolished in 1990.
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