How should transfers in a social assistance programme be targeted?
Social assistance programmes are typically targeted at a certain group within the population. The two main targeting methods are categorical targeting and means-testing. • The most common example of categorical targeting is by age: many continental European countries provide universal child allowances to children, or social pensions (non-contributory) to the elderly lacking old-age or survivorship pension. • Means-tested programmes are given only to low-income households. Basically, only households with an income below the programme eligibility threshold, and in many cases, whose endowment with assets is less than a given threshold, qualify for the program. In other words, benefits are provided to households that are ‘poor enough’.Means-testing requires deciding whether an individual, family or household will be eligible for assistance. It can be based on income levels only or on a combination of income and assets. The income and assets of households or individuals can be assessed on a
