assess, understand, and gauge the actual effectiveness of these vital programs in alleviating poverty and enhancing the livelihoods of disadvantaged individuals and families.

# **Considering the abovementioned constraints and limitations, this paper adopts a distinct approach to**

**address the issue.** Instead of relying solely on survey data, we employ a simulation method to assess the performance of the Monthly Social Allowance (MSA) and heating allowance programs. This simulation draws upon eligibility criteria and administrative data to accurately represent the benefits provided to eligible households. The simulation involves utilizing several household-level variables in the Survey on Income and Living Conditions (SILC)<sup>16</sup> to determine potentially eligible households using the program's parameters specific to 2020<sup>17</sup> . These are used to calculate the DMI coefficient factor. Subsequently, this factor is multiplied by the base amount for 2020/2021, which stood at 75 Bulgarian leva (BGN) before the reform. The result is a more precise estimation of the benefits that these social assistance programs would provide. This approach allows us to access valuable information about DMI for various categories of individuals, ensuring a more nuanced and accurate evaluation of the MSA and heating allowance programs. By mitigating the reliance on survey data and introducing administrative parameters, we enhance our ability to understand and analyze the impact of these programs on the targeted beneficiaries, providing a more comprehensive and reliable assessment of their effectiveness. With this approach, we can identify information about DMI for the following categories of persons:

- people over the age of 75 living alone

- people over the age of 65-75 living alone

- people over 65 years old cohabiting with others

- people under 65 years living alone

- people under 65 years old living with others

- people with reduced working capacity (50% or more)

- people with reduced working capacity (75% or more)

- all children and youth in education

- for children attending school

- for children not attending school

**Since not all households that meet the potential eligibility criteria receive the benefits, estimating the take-up rate for the Monthly Social Allowance (MSA) scheme is important.** To determine this take-up rate, we compare the estimates of beneficiaries based on administrative data with those from the simulated survey data. In our estimation, we calculated the number of beneficiaries and the total benefits derived from the survey data. Notably, these figures were higher than the corresponding administrative data figures reported by the government, particularly for the MSA program, and slightly higher for the heating allowance.<sup>18</sup> These disparities can be attributed to various factors, including the lack of modeling

> 16 We thank Lucian Bucur for previous versions of the Stata code to model the GMI, which was further developed and incorporated into the CEQ model infrastructure for this estimation.

> 17 See Annex 1 for details.

> 18 According to the survey, the beneficiaries were 42,600 households, but according to Bulgaria’s government administrative data, the coverage was 23,702 in 2020.  Regarding the heating allowance, the beneficiaries were 264,771 in the household survey and 283,680 in administrative data.  For heating allowance , we assumed 99% takeup in the baseline scenario, and the total beneficiaries were 265,896. The GMI estimated benefits were higher than

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