This draft paper from the International Labour Organisation’s Centre for Learning on Social Inclusion (CIARIS) outlines the growing importance of social assistance, and reviews its place within wider social protection, labour and poverty reduction strategies. Social assistance is not a panacea against social exclusion; its limitations should be recognised and addressed through links with more comprehensive social and labour market policies.
Social assistance (SA) is defined by the ILO as “benefits for poor and needy groups that are financed by tax revenues”. It has two main goals: prevention of extreme deprivation; and promotion of social inclusion. Pro-inclusion social assistance schemes include: unconditional cash or in-kind benefits; integrated welfare, social services and social insurance; integrated income generation and social and health services; conditional cash transfers tied to service use; employment guaranteed public work schemes; minimum guarantees with activation measures (usually active labour market policies); local/municipal programmes linking social assistance with local development initiatives; and interventions that tackle specific needs such as child labour or households with HIV/AIDS.
While economic growth is necessary for poverty reduction, it is not sufficient. Social protection can fulfil three important functions: insurance, redistribution, and safety nets. It is rooted in a conception of citizenship and equal rights, of which redistribution and social inclusion are cornerstones. From a social rights perspective, minimum protection should be guaranteed to all, to expand their freedoms and capabilities.
Key issues for social assistance programmes include:
- Targeting, eligibility and take up: While it is more effective and easier to administer, universal coverage is more expensive and not targeted at the poor or vulnerable. In low-income countries, where families are usually large, it may be preferable to target households rather than individuals. Given the cost of targeting and conditionality monitoring geographical targeting could be considered. Another method inside communities is to rely on traditional mechanisms for determining targeting, eligibility and verifying compliance.
- Benefits adequacy and dependency: Due to budget constraints and fears of effects on the labour market and social insurance, social assistance levels are generally below poverty lines.
- Feasibility, affordability, cost effectiveness: In low-income countries, this involves securing a basic package of transfers – including targeted social assistance– that could have an immediate impact on poverty and vulnerability. ILO studies on a number of countries in Africa and Asia show that this basic package would absorb on average around four percent of Gross Domestic Product (GDP), but could potentially reduce the incidence of poverty by one third.
Social assistance is an important tool for both poverty alleviation and promoting social inclusion. Lessons from experience include the following:
- Social cash transfer schemes and labour market policies and programmes are complementary instruments and should be integrated.
- A legal and institutional framework for social assistance must be established.
- Coherence and coordination between different social protection schemes are essential.
- With conditional transfers, it is crucial to balance investment in generating demand for social services (such as making cash transfers conditional upon educational attendance) with investment in improving the supply of those services (such as more funding for schools).
- Social protection can promote economic growth, stimulating both consumption and investment – therefore such expenditure can generate significant financial returns for the state in terms of both increased income (through taxes on increased consumption) and reduced costs (for example, through reduced ill health).
