Under this pilot direction of the Social Assistance Reform Project, the experts of CASE Ukraine focused on developing methodology for calculating income from informal sources that are not taken into account, fully or partially, while granting social assistance, such as income from informal employment, agricultural production and assets.
To take into account informal income of social assistance applicants and better target social assistance, the method of indirect (hybrid) means-testing (HMT) was used, which spreads more and more in the world. Indirect means-testing implies calculation of income basing on regular qualitative characteristics of an applicant’s household and its members, such as household composition, socio-economic status of its members, location and quality of housing, etc. To get indirect income estimates, a model (formula) obtained by regression analysis is used. Easy to verify household data is entered into the formula, and the result is an estimate of total household income, including informal income that can not be verified in data-matching procedures, which is particularly important given significant share of the informal economy in Ukraine.
The HMT method was tested in five pilot welfare offices in different regions of Ukraine. It was used both to assess the applicant’s income in addition to the established procedures of income declaration and as an experimental mechanism for identifying suspicious social assistance applicants.
Under this pilot project, a new methodology of setting rates of household income from land and livestock was developed. The estimated agroincome rates were tested in the pilot offices along with the HMT model. In addition, there were outlined the main directions of developing the imputing income from assets (additional housing or excessive living space, cars and other vehicles, etc.) methodology.
During the work on the pilot project, the issues of unifying criteria for granting different means-tested benefit types and of granting benefits to families living in multi-family households were also considered.
The main results of this pilot project are presented in the following reports:
1. Summary Report on Introducing Uniform Households Means Testing Criteria for Granting All Types of Social Assistance, and Improving the Techniques of Calculation of Family’s Aggregate Income for All Types of Social Assistance
- Social Protection