Direct Payment Schemes in Slovakia

In 1997 the Independent Living Institute successfully bid for projects in the Slovak Republic within the European PHARE program: a personal assistance delivery scheme using direct cash payments and a accessible mainstream taxi system with a subsidy scheme for disabled riders. The article discusses some of the difficulties and opportunities that user-initiated and user-run solutions entail in post-communist societies. Internet publication URL:

by Adolf D. Ratzka, Ph.D., 1998

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After separation from Slovakia in 1990, the Slovak Republic has made efforts towards modernizing its social policy. In 1996, as part of the nation’s reform package financed by the European Union PHARE program the Ministry of Social Affairs invited European universities, NGO’s and consultancy businesses to compete for a ECU 300,000 contract for starting up pilot projects for home help services and special transportation for people with extensive disabilities.

The Independent Living Institute, a Stockholm based outfit for information, training and technical assistance primarily for direct payments, won the competition on the basis of its innovative proposal. Instead of setting up a traditional homehelp system with central staff serving users within a geographical area, as suggested by the terms of reference, the Institute proposed a Direct Payment scheme. The solution consisted of training assistance users in the Bratislava area in setting up and running a user cooperative and in hiring, training and supervising their respective personal assistants. Under the guidance of the Institute participants learned how to assess their needs, set wages and hire administrative staff to run the scheme. The cooperative functions as the employer of the assistants. The individual participant is responsible for hiring, training and supervising his or her assistants. The roles of the cooperative, members and assistants are all contractually defined. The solution is based on the Institute’s director’s experience as initiator and chairperson of STIL, the Stockholm Cooperative for Independent Living which started up what is probably the first assistance user cooperative in Europe.

Twenty-two project participants receive a monthly amount that is paid into their respective sub account in the cooperative. The amount is based on the number of hours a participant needs multiplied by the rate per hour which is the same for all participants. The rate covers assistants’ wages, social insurance fees, workers’ accident and liability insurance as well as administrative costs. Thus, administrative costs are baked into the hourly rate and cover the respective participant’s share in the wages of the central project staff (part time project manager and accountant, both disabled) plus the respective participant’s budget for such expenses as advertizing for assistants and paying accompanying assistants’ travel, meals, entrance tickets at movie theaters, etc.

Monthly amounts are fixed for the respective participant throughout the project period. Users may save funds during some months in order to be able to overspend during other months. Safeguards ensure that no participant can run up a deficit.

The group faced initial difficulties. In Slovakia, employership has been reserved for large and mainly state-owned companies but not for private individuals. The participants, most of whom live with their parents and have no work experience, were unfamiliar with such tasks as starting a member organization, adopting bylaws, electing a board - or conducting an orderly meeting.

The pilot project received enthusiastic support by the participants, their relatives and friends and was widely covered in newspaper articles and TV. Participants proudly reported how they now, for the first time in their lives, with the help of their assistants, could contribute to household chores, go out and even travel abroad for vacation.

The pilot project was in place in summer 1997 and by spring 1998 its success had influenced the Ministry’s work with the new Slovak Social Act. The proposed reform passed Parliament in April 1998. As of January 1, 1999 persons with extensive disabilities in the Republic will receive a monthly Direct Payment for personal assistance.

Before anybody considers moving to Slovakia, I hasten to add that the amount of the payment will be means-tested thus posing a serious disincentive to work for persons with large assistance needs. Also, after the elections in September the new government found that state coffers are empty. Thus, it remains to be seen whether disabled people will receive the payments that they are legally entitled to.

The other project required by the contract with the Slovak Ministry of Social Affairs consisted of setting up a traditional special transport system. There are several such schemes already in the country. They contain the typical features of special solutions: service limited to certain times of the day and the week (e.g., from 8 a.m. to 4 p.m. and never on weekends), at least five working days advance booking, high costs and patronizing attitudes of dispatchers and drivers - in brief, a system that ordinary taxi customers would never tolerate. Instead of creating yet another special, segregated and stigmatizing solution the Institute proposed a Direct Payment scheme that subsidizes project participants’ purchasing power for regular taxi rides in vehicles that can accommodate non-disabled and disabled customers.

The Institute purchased five Volkswagen Caravelle vans with middle seat benches that can be easily stowed in the trunk thus creating space for one or two wheelchair users. Each van was equipped with folding ramps and straps for wheelchair tie-downs. The vehicles were donated to the Center for Independent Bratislava under the condition that they were to be used for the project. The CIL, in turn, was to lease the vehicles to five taxi owners/drivers who contractually committed themselves to follow rules that define extent of services and associated costs. For example, dispatcher and taxi drivers are to give priority to disabled customers. Also, while the kilometer rate is to be the same for all customers, the drivers charge disabled patrons a somewhat higher start-up fee as compensation for the longer distances (with five cars available for the whole Bratislava area the distance required to reach disabled customers is likely to be longer than in the case of non-disabled customers) and for the time that it takes to accompany disabled customers door to door. The intention was to make disabled customers at least as economically attractive for taxi drivers as non-disabled ones.

The leasing fees that the drivers pay to the CIL each month during the project time of four years is translated into a number of coupons that are distributed to the 50 project participants. Each participant receives the same number of coupons that are good for some 10 free rides a month depending on the length of the rides. Rather than subsidizing a small number of participants to get to work every day, it was decided to spread the number of coupons among as many people as possible to allow more people to experience the benefits of the scheme and to hopefully increase demand and political pressure in the disability community for the solution.

Apart from collecting leasing fees and managing the coupon system the CIL Bratislava also monitors the performance of dispatcher and drivers. In periodic questionnaires information is compiled on waiting time when calling the taxi switchboard, when waiting for cabs, availability of service throughout the week as well as the drivers’ attitudes. Thus far the service is very popular with the project participants whose only complaint is that they do not have enough coupons. As evidence for the responsiveness of the system, I was told that the accessible vans are sometimes used as ambulances because they come faster than real ambulances.

The five taxis have been in operation since November 1997. Now, a year later the project is widely known for its flexibility, convenience and cost-efficiency in comparison to existing alternatives. A study at the Department of Economics, University in Bratislava found that the cost of per passenger kilometer is less than half of that of traditional special transportation systems. During summer 1998 the solution has been copied in the cities of Kosice and Banska Bystrica and the CIL Bratislava often receives study visits from other Slovak regions.

A mobility provision granting eligible disabled people direct payments for maintaining a motor vehicle, for paying for the use of somebody else’s car or for taxi services is part of the new Slovak Social Act. It has been calculated that the amounts provided under the Act, in most cases, will suffice to pay daily taxi rides to work. Yet, as pointed out above, due to the dismal state of the country’s finances it is unsure whether anybody will receive such payments in January 1999 - despite their legal entitlement.

November 1998

Adolf D. Ratzka, Ph.D.
Independent Living Institute