The Ministry of Finance has solved issues regarding the refund to housing utility suppliers of exemptions and subsidies granted to citizens for the payment of housing utilities according to the new mechanism of the monetization of subsidies enacted on January 1, 2018.

The decree of the Cabinet of Ministers No. 951 of November 08, 2017, on the implementation of the monetization of subsidies at the level of service companies starting from 2018 is the first stage in the reform of the settlement of subsidies which implies transparent and timely “real” payments to clear subsidies between the state and service providers.

On January 30, to ensure timely settlements with the homeowners associations and housing cooperatives (OSBB/ZhBK), the Ministry of Finance sent explanations to the State Treasury Office regarding the transfer of the subsidy for exemptions and entitlements granted to citizens for the payment of housing utilities.

Also, the Ministry of Finance prepared an instruction to the State Treasury to transfer a part of the subsidy for the payment of the apartment fee and other utilities according to the norms set by the Ministry of Finance.

Now, the Ministry of Finance has started the preparation of systemic amendments to the decree of the Cabinet of Ministers No. 256 of March 04, 2002, which stipulate the launch of the second stage of the reform of exemptions and subsidies and implements the “monetization” of exemptions and subsidies at the level of households. Thus, a mechanism will be offered for the direct transfer of the subsidy for housing utilities to the accounts of the respective recipients enabling them to pay for these utilities on their own.

Pending the amendments to the decree of the Cabinet of Ministers No. 256 of March 04, 2002, settlements with OSBB/ZhBK will be effected via bank accounts, settlements with entities funded from the state budget will be effected via special registration accounts at the State Treasury.

Background

The monetization of subsidies means a number of innovations in the settlement of subsidies:

• Subsidies shall be transferred directly by the State Treasury without any protocols;

• Clear timeline for the transfer of the subsidies (by the 24th day of the respective month);

• Service providers independently select suppliers of energy and housing utilities;

• Settlements are effected in “real” money;

• Subsidies are transparently transferred for the exemptions and preferences in line with the actual consumption of services.