In 1985 some 47 percent of Georgia's budget went to support the food, health, and education needs of the population. Social services included partial payment for maternity leave for up to eighteen months and unpaid maternity leave for up to three years. State pensions were automatic after twenty years of work for women and twenty-five years for men. As inflation rose in the postcommunist era, however, a large percentage of older Georgians continued working because their pensions could not support them. In 1991 the social security fund--supported mainly by a payroll tax--provided pensions for 1.3 million persons. The fund also paid benefits for sick leave and rest homes, as well as allowances for families with young children.

In 1992 subsidies were in place for basic commodities, pensions, unemployment benefits, and allowances for single mothers and children. At that time, a payroll tax of 3 percent was designated to support the national unemployment fund. Deficits in the social security fund were nominally covered by the state budget, but budget shortfalls elsewhere shifted that responsibility to the banking system. In 1992 increased benefit payments and the decision not to increase the payroll tax eroded the financial base of the fund.

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Source: U.S. Library of Congress