State support is offered to vulnerable groups. Subsidies - financial assistance allocated from the budget of a country to a legal entity or an individual and aimed at partial compensation of expenses incurred by it for certain purposes - for example, housing construction or utility bills. The amount of subsidies depends on the established living wage and monthly income of the person. State subsidy is not only the issuance of a certain amount of money, but also benefits.
Subsidy Principles
Material assistance in kind or in cash is provided by the state to certain individuals who have a small income below the established subsistence level. Legal entities are also eligible to participate in the subsidy program. The allocation of subsidies is based on several principles:
- Gratuitousness. An entity that has received monetary compensation from the state is not required to give anything in return.
- Irrevocability. A citizen is not obligated to compensate for the funds allocated from the budget for specific purposes.
- Special purpose. Social compensation is allocated only for certain purposes - covering the costs of construction or the purchase of housing, payment of utilities. It is forbidden to sell money in other areas of activity.
- Partial or equity financing. The state can issue material payments only by non-cash method, either in shares or in parts.
- Subsidization. Grants are targeted and designed to support legal entities and individuals.
Purpose of use
Part of the funds allocated from the federal and regional budgets is compensated provided that they are spent by an individual or legal entity on the tasks specified in the legislation, and is regulated by the established procedure for calculating and using allowances. According to the conditions of subsidies, only citizens of the Russian Federation with a permanent place of registration can receive benefits.
Subsidy programs are divided into several types:
- Material assistance to legal entities and entrepreneurs.
- Support for the poor.
- Financial assistance to specific industries and sectors.
Individual Support
The budget program is designed for people whose income is below the established subsistence level. It implies the provision of various benefits to vulnerable groups. Material support is issued to the following categories of individuals:
- Russian citizens with disabilities.
- Single mothers.
- Young families.
- Persons working in the Far North.
- Military.
- WWII veterans.
- Persons working in defense enterprises during the Second World War.
- Blockade citizens with appropriate rewards.
- Persons who care for children with disabilities or dependents.
- Forced migrants.
Subsidies are allocated to individuals for the following purposes:
- Compensation of expenses for treatment, medications, travel.
- Compensation for payment of utilities.
- Reimbursement of the value of the purchased property.
- Reimbursement for housing construction.
The highest authorities are responsible for providing material support to individuals. Local administrations and ministries carry out assistance programs.
Subsidies for business
The difficult economic situation prevailing in the country forced the government to decide on providing assistance to unemployed citizens. The proposed business subsidization implies the provision of gratuitous monetary compensation in the amount of 60 thousand rubles, which should be used to open a business.
Social benefits for starting a business are issued to the following categories of people:
- Adult citizens of the country.
- Persons with unemployed status and Russian citizenship.
- They have a business plan and a business idea that should not concern illegal activities.
Support provided to small and medium businesses is to provide special benefits and exemption from tax payments. The program is available only to specific business entities:
- Organizations and entrepreneurs who have just started their activities.
- Enterprises and companies involved in the production of products.
- Organizations, firms and individual entrepreneurs working in the field of eco-tourism.
- Entrepreneurs specializing in folk art.
- Agricultural entities.
- Companies and entrepreneurs producing essential goods.
- Companies working in the provision of social and housing services.
Other types of business assistance
The legislation of the Russian Federation also provides for other options for providing assistance to small and medium-sized businesses:
- Allocation of state grants - monetary assistance to business entities free of charge in the form of a one-time payment.
- The issuance of soft loans with minimal interest for the development of one of the areas of production and industry demanded by the state.
- Payment for education.
- Consulting on economic and legal aspects free of charge.
- Allocation for free use of production equipment, land and premises.
- Holding fairs, sales and exhibitions, which demonstrate the products of novice businessmen.
Financial assistance to the regions
The program, the conditions of which provide for the allocation from the federal budget of material support to budgets of other levels in order to finance certain tasks. Funds are provided for different purposes:
- Implementation of targeted programs.
- Support for events and social programs.
- Material security of authority allowing government bodies to carry out their work.
- Equalization of per capita income.
Varieties of subsidies
According to the definition of what subsidies are, the assistance provided is classified into several types. It is divided into subsidies in the form of cash and in the form of extrabudgetary transfers by type of provision. The first type of benefits is allocated to individuals and legal entities from budgetary and extra-budgetary funds. The second type is designed to assist lower budgets - for example, regional ones.
Depending on the type of implementation, state aid is classified into:
- Direct subsidization. Assistance from the state, implying open funding for various fields of activity.
- Indirect subsidies. Providing tax and credit benefits.
- Cross subsidization. Programs whose main goal is to cover losses in one of the economic spheres at the expense of income received in another, through state regulation.
Subsidies for housing and communal services
A support program that lowers utility bills is available to most citizens of the Russian Federation, provided that they pay receipts on time and submit the necessary documents to the MFC. According to the definition of what subsidies are, benefits are provided to citizens of the country whose income level is below the subsistence level, provided that the payment of housing and communal services exceeds 22% of total monthly income. Each region has its own spending standards aimed at paying utility bills.
The maximum term for calculating subsidies for an apartment is six months. Its value depends on regional requirements and tariffs established by the housing and communal services. The required amount of payments is determined on the basis of the following indicators:
- Property area.
- The high cost of maintaining and repairing housing.
- The cost of wastewater.
- The cost of electricity, gas, heat and water.
In each of these cases, the amount of financial payments is determined individually and cannot be more than the established total amount charged at current rates. Subsidies are issued every month from the 1st to the 15th day in the current payment period. When submitting documents after the 15th day, the subsidy will be accrued next month. Reissuance of state aid is carried out after six months. The compensation received from the budget for spending on utility bills can be credited to a personal bank or pension account.
Subsidies for preferential categories of citizens
According to what subsidies are and the rules for granting benefits, the following categories of citizens can receive state assistance to pay for utilities:
- The poor.
- Caught in a difficult life situation.
- Senior citizens.
- Persons registered in employment centers.
- Persons with a certain status and awards for services to the country.
- Landlords subject to a formal lease.
- Owners of real estate who have obtained ownership of it.
- Residents of buildings of municipal and state funds.
- Members of housing enterprises.
The state does not allocate assistance to the following categories of persons:
- Foreigners without Russian citizenship.
- Persons with debts for utilities.
- Citizens who have entered into an agreement on paying off debts for public services.
State programs for subsidizing real estate
State monetary compensation, including mortgage subsidies, are provided in the following forms:
- The program "Young Family", designed to support young families. Assistance is granted provided that one of the spouses is not older than 35 years old, one of the family members is a citizen of the Russian Federation, a subsidy can also be allocated to single mothers and persons under 35 years old raising one or more children.
- Support for poor families. Benefits are provided to families who do not own property, reside in an emergency building, have not entered into a social security agreement, or one of whose members suffers from chronic diseases.
- Benefits for large families. They are allocated to citizens of the country raising five or more minor children who are registered in the same housing with their parents.
- Compensation for the disabled designed to improve housing conditions. It is granted to disabled people of I and II groups who are registered before 2005.
- Subsidies and incentives for reserve personnel. Provided subject to the conclusion of a military contract until January 1998, acute need for housing, a lifespan of 20 years and discharge to the reserve for health reasons.
- Benefits to state employees and young professionals, including subsidizing mortgages.
- Support for residents of the Far North.
What is car loan subsidy?
In 2009, the Russian government developed and launched a concessional lending program aimed at acquiring domestic vehicles. The essence of the program is to create an incentive and increase consumer demand for cars produced by Russian automakers.
Car loan subsidies consist of repaying part of payments from budget funds. State compensation does not exceed 2/3 of the amount indicated as a percentage of the price of the car and representing the bank's income for issuing a loan.
Subsidizing the interest rate on car loans made it possible to increase the production and sales of AvtoVAZ cars by 50%. Despite the high rates, the program was stopped for a while and was resumed only in 2013. In May 2017, 10 billion rubles were allocated from the state budget for subsidizing car loans, however, at the same time, amendments were made to the rules for granting benefits.