Social Aid in Cuba to Be Adjusted Based on Family Income

The Cuban regime has announced a comprehensive overhaul of its social assistance system, signaling an end to widespread subsidies and a shift toward targeting aid at individuals and families facing significant economic hardships.

This initiative is part of a sweeping package of 176 economic and social reforms unveiled on Thursday by Prime Minister Manuel Marrero Cruz during a special session of the National Assembly of People's Power. The session was convened to discuss necessary reforms in light of Cuba's severe economic crisis.

The proposed changes are part of a broader economic reform program endorsed by Cuban authorities, which includes opening the door to private banking, increasing foreign investment, and easing market mechanisms. The 176 measures are presented as a strategy to address the island's most severe economic downturn in decades.

Leveraging Technology for Social Support

Included in the Social Transformations Axis 8 is the establishment of a digital system to identify and monitor vulnerable individuals through the SOBERANÍA platform. This will allow for real-time updates on families with economic needs and track the aid they receive.

The plan also involves state, private, and foreign companies participating in community support programs as part of their social responsibility. Proposed actions include support for nursing homes, orphanages, soup kitchens, health institutions, and educational centers, alongside the creation of discounts, free services, and solidarity quotas for vulnerable people.

Employment and Training Initiatives

The government aims to boost employment and training programs for those in vulnerable situations, providing them with small-scale assets to engage in economic activities and improve their income. Additionally, fiscal incentives are proposed for workshops employing people with disabilities, and differentiated rates are suggested for daycare centers and boarding schools based on family income.

One of the most sensitive changes for the population is outlined in Axis 9, which focuses on subsidy transformation. The government plans to gradually eliminate generalized subsidies on products and services, replacing them with targeted subsidies for vulnerable individuals.

Marrero's proposal suggests starting with sectors that are pivotal to the economy, such as fuels, electricity, freight and passenger transport, and water services, with prices gradually reflecting actual costs. Subsequently, this scheme will extend to other subsidized products.

Creating a Social Protection Fund

As a prerequisite for implementing these changes, the government plans to create a Social Protection Fund, partly financed by resources saved from subsidy elimination. The stated goal is to compensate the most vulnerable sectors for any adverse impacts from the reforms.

These measures follow President Miguel Díaz-Canel's announcement that the basic food basket will no longer be universal, limited instead to retirees, families with chronically ill children, and those in vulnerable situations—a historic shift in the state's food distribution system. He confirmed that the ration book would be reserved for sectors deemed vulnerable.

This change marks a consolidation of a social protection strategy focused on vulnerable groups, aiming to concentrate state resources on specific population segments rather than maintaining universal subsidies for all citizens.

According to the information presented to Parliament, the new scheme will combine monetary aid, direct subsidies, service discounts, and assistance programs for individuals identified as vulnerable by local authorities and social registry systems.

This social reform is part of a broader economic transformation as the regime attempts to salvage an economy plagued by inflation, blackouts, shortages, and declining production. Additionally, authorities are proposing reforms in the banking system, foreign investment, agriculture, commerce, and currency policy.

While the official narrative claims these transformations aim to preserve the socialist system, many economists argue they represent one of the most significant attempts at economic restructuring since the Special Period, amid worsening living conditions and a mass exodus of Cubans.