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Targeting Social Assistance by Proxy Means Testing

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Under the Social Assistance Reform Project, the experts of CASE Ukraine studied the methods oftargetingsocialassistance, in particular proxy means-testing,andthe resultsof theiruseinthe world. According tointernationalpractice,there is nouniformmethod oftargeting social assistance that would be optimal for different social assistance programs andall countries. Applying complexmethodsof direct income estimation incurs high administrative costs, while simple means-testing methods arecharacterized bylowaccuracy. Scoringmethodinvolvesthe useof simpleobservablehouseholdcharacteristics forproxymeans-testing of an applicant’sincomeandthus helps avoidfraudanderrors associated with income declaration. The report describing international experience in the use of proxy means-testing and itspros and cons can be downloaded at the link below.

 

January 4, 2011