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At the moment, the minimum subsistence level, or minimum income amount, is calculated according to the value of the minimum consumer basket of goods and services that was approved in 1991. Welfare Minister Ilze Vinkele (Unity) told a press conference today that this method was no longer applicable today.

One of the alternatives offered by the Welfare Ministry is to introduce a single subsistence minimum level of 30%, 40%, 50% or 60% of median income or average wage in Latvia, which at the moment could be around LVL 500 a month, explained the ministry's state secretary Ieva Jaunzeme.

If the state can afford this, the percentage could be higher, she added.

The other option is using the same method, albeit differentiating the minimum income among the various social groups.

The third option, which the Welfare Ministry considers the best, is to introduce a new minimum consumer basket of goods and services, or several such baskets for various social groups.

"The Welfare Ministry supports the third option, because it is more precise better applicable to various socially-vulnerable groups," explained Jaunzeme.

In the third option, there could be four types of the minimum consumer basket of goods and services: for singles, couples, couples with one child and couples with two children.

In other countries that employ a similar method, for instance, Italy and Sweden, the baskets are revised once in two or three years, added Jaunzeme.

The Welfare Ministry also suggests that basic pensions be introduced that would be paid from the master budget and should be close to the minimum income level. At the moment, minimum pension is LVL 45 a month, and such pensions are paid from the social budget.

At the moment, the number of new pensions is comparatively high and, taking into consideration the limited social contributions, the amount of such pensions could even become smaller. If the pensions were paid from the state budget, this would improve pensioners' financial situation significantly, explained Jaunzeme.

These and other proposals are included in the Welfare Ministry's report "Proposals for Optimization of Welfare System".

The report will be reviewed by the government today. If the government approves the proposals, the Welfare Ministry will start talks with local governments about the specific proposals and the best ways to implement them.

The Welfare Ministry's experts say, however, that the planned measures will take a long time to implement.