• What is a subsidy?

    Ignorance of certain concepts and definitions can make it impossible for us to get help or have some benefit. "You need to charge a subsidy," you hear. But what is a subsidy? Fine? Tax? Or what contribution of money? “I don’t need this at all,” you think, refusing elementary support. Let's understand the concepts: what is a subsidy, to whom it is given, and what is necessary to obtain it.

    Subsidy: Definition

    The word that came to us from the Latin language means support or assistance of a material nature (monetary or in-kind). This payment of benefits to the consumer at the expense of the state or local budget. Consumers can be legal entities and individuals.

    Types of subsidies

    1. Subsidy as cash payments to individuals and legal entities (which are not budget institutions) from extrabudgetary (private) funds and budgets. Example: a housing subsidy is money provided to a resident from a state for payment of utility bills.
    2. Subsidy as an intergovernmental transfer - co-financing of a lower budget by a higher parent.Example: regional federal budget assistance, regional budget assistance to the local one.

    There are also direct and indirect subsidies.

    • What is a direct subsidy? This is direct, direct, targeted financing of regions, enterprises, industries or programs. Example: retraining; ensuring the production of new technology.
    • The indirect subsidy is the establishment of tax and other benefits; that is, it is indirect support through monetary policy, tax instruments, and so on.

    Subsidy properties

    1. Subsidies act as co-financing (subject to equity financing).
    2. Subsidies are targeted. That is, payments are always made for specific purposes, for other purposes these payments do not apply (purchase of housing, payment of utilities, etc.).
    3. A subsidy is always a non-refundable payment (unlike, for example, a loan), that is, it is gratuitous. Refunds will be made only in the case of payments on subventions (subventions - payments for strictly defined purposes), if these funds were used not for the purpose for which they were accrued (for example, utility funds were credited, and the money was spent on furniture. In this case, the money will be withdrawn).

    What do you need for a subsidy?

    It is impossible to say unequivocally, because now you know that "subsidy" is a rather broad concept.

    Let us give an example of the list of documents required for obtaining a housing subsidy, that is, to help pay for utilities.

    • Passports of all family members (if there are minors, their birth certificates).
    • Settlement documents, where: family composition; housing area; housing and utility expenses; type of housing (state, cooperative or private); type of settlement (bed or dwelling).
    • Information about family income (scholarships, pensions, salary, etc.), all its members.
    • Employment records (for non-working women with children under three years old and non-working pensioners).
    • Inquiries from the labor exchange (about receiving unemployment benefits).
    • Ownership of the dwelling (all supporting documents).

    This is an example of what is needed for a subsidy.

    To summarize: a subsidy is the support of a particular entity that does not have the necessary sufficient funds for self-financing.


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