the heating allowance since its take-up rate is already close to 100%; according to SILC 2021, nearly all eligible households are already receiving the benefit.

In summary, while the MSA may impact all three channels, the heating allowance primarily operates through changes in eligibility, given that the transfer size is typically fixed, and program take-up is already relatively high.

**In assessing the impact of policy changes related to social assistance programs like the Monthly Social Allowance (MSA) and heating allowance, we evaluate various outcomes to gain a comprehensive understanding of the implications of the reform** . The simulations aim to comprehensively assess the proposed policy change to determine the overall effectiveness and social impact. The outcomes included in this analysis can be broken down into several key components:

- _Program Coverage_ : This refers to the number of households receiving assistance under the revised policy. When changes are made to programs like the MSA or heating allowance, it is essential to determine how many more households would become beneficiaries due to these adjustments. A higher number of beneficiaries reflects the expansion of the program's reach. Coverage is a percentage of households participating in the program by income decile (calculated as market income plus pensions).

- _Program Adequacy/Generosity_ : Adequacy assesses whether the benefits provided under the new policy are sufficient to address recipients' needs. It examines how the increased benefits can alleviate financial hardship and improve the well-being of eligible individuals or households. This is crucial for determining the real impact of the policy change on those it is intended to help. Adequacy is measured as the total transfer amount received by all beneficiary households in each decile as a share of the total income of beneficiaries in that group.

- _Impacts on Inequality_ : One key objective of social assistance programs is to mitigate income inequality. The impact on inequality assesses whether the policy changes lead to a more equitable income distribution.  It is measured as the per adult equivalent Gini index change before and after policy.

- _Impacts on Poverty Rate_ : Poverty reduction is a primary goal of many social assistance programs, particularly poverty-targeted programs. By estimating the impact on poverty, policymakers can understand whether the policy changes effectively lift individuals or households out of poverty, ultimately improving their quality of life. The impact is measured as the change in the AROP rate before and after the policy change (with a fixed poverty line before the policy change).

- _Impact on the Poverty Gap_ : The poverty gap measures the depth of poverty experienced by individuals or households. It quantifies how far below the poverty threshold their income falls. A reduction in the poverty gap indicates a positive effect of the policy change as it indicates that those in poverty are moving closer to the threshold. It is measured as the change in the AROP gap rate before and after policy (with a fixed poverty line). The at-risk-of-poverty gap is calculated as the difference between the median equivalized disposable income of people below the at-risk-ofpoverty threshold and the at-risk-of-poverty threshold, expressed as a percentage of the at-riskof-poverty threshold (cut-off point: 60 % of national median equivalized disposable income).

- _Total Benefits (Fiscal Cost of the Policy Change_ ): This aspect involves estimating the total cost to the government associated with implementing the policy change. It considers the increased

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