**Figure 2: Eligibility thresholds for benefits in Poland (per capita in household)**

<!-- Start of picture text --> • Caretaking of disabled. Caregiver allowance<br>• Disabled and age 75+: Attendance allowance<br>• Emergency: Special Need Allowance<br>• 500+ for every child after 1st<br><!-- End of picture text -->

|**Any income**|•**Caretaking of disabled.**Caregiver allowance<br>•**Disabled and age 75+:**Attendance allowance<br>•**Emergency:**Special Need Allowance<br>•**500+ for every child after 1st**|
|---|---|
|PLN 1,922|•**Child birth:**Birth Grant (national)|
|PLN 800|•**500+ means tested for first child**|
|PLN 725|•**Child in separated family:**Alimony fund|
||Moderate poverty line: PLN 668.7<br>|
|PLN 664|•**Disabled member:**Family allowance and up to 7 supplements<br>to family allowance|
|PLN 623|•**Caretaking of disabled:**Special caregiver allowance|
|PLN 574|•**Children 0–18:**Family Benefit and up to 6 supplements|
|PLN 542 (single),<br>PLN 456 (family)|•**Disabled or Elderly:**Permanent Benefit<br>•**Difficult life situation:**Temporary Benefit<br>Absolute Poverty Line: PLN 519|

<!-- Start of picture text --> • Child in separated family: Alimony fund<br><!-- End of picture text --> <!-- Start of picture text --> • Disabled or Elderly: Permanent Benefit<br>• Difficult life situation: Temporary Benefit<br><!-- End of picture text --> _Source:_ World Bank 2015.

The model also allows for a computation of the marginal effective tax rates and a visualization of the poverty/inactivity traps.<sup>5</sup> The model has several assumptions: individuals respond to incentives to the extent that they are aware of the eligibility rules of each benefit; net income affects their decisions to work; and households receive all benefits that they are entitled to in full. Even when some of these assumptions are relaxed, the results remain overall insightful for Poland.<sup>6</sup> For this paper, we have updated the latest published OECD TBM (2014) to represent the 2016 policy realm, and it also has validity for the first semester of 2017 in light of the lack of significant reforms to taxation, labor market, or social benefit parameters. The updates were extensive and included (a) new regulations of existing programs, (b) changes to income thresholds across most programs, (c) inclusion of the newly introduced 500+ program for families, (d) changes to the level of MW, and (e) alignment of contributions on labor contracts. The paper adds to the literature by illustrating the exact level of earnings at which disincentives to work may occur and which

> 5 Poverty traps describe a mechanism where an increase in labor income leads to a stagnation or even loss of net income because of (a) the loss of a benefit/transfer or (b) taxes and other contributions that have to be paid. Marginal effective tax rates are useful in identifying these disincentives created by the interplay of the entire tax-benefit system in a country.

> 6 The take-up rate for housing benefits, for example, may be one of these cases. Housing benefits in Poland have an element that incorporates the different sizes of apartments and an assessment by an inspector to determine the exact amounts of the benefit. This very specific award of benefits cannot be exactly assessed in this model. In addition, HBS 2014 data suggest that the take-up rate for this benefit is the lowest in Poland.

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