**Finally, the study's beneficiaries represent a sample of low-income households eligible for these benefits, with a take-up rate estimated in the baseline year (2020).** However, given the lack of detailed information about the characteristics of households that are more likely to receive benefits, selecting beneficiaries was conducted randomly. While this approach provides a reasonable approximation, further research on the specific attributes of benefit recipients could enhance the precision of the findings and inform more targeted policy adjustments.

# IV.Results

**This section presents the main results.** First, it examines the effectiveness and poverty-reduction impact of the Monthly Social Assistance (MSA) and Heating schemes before the policy reform of the social support system. Then, it assesses the potential impacts of the reform by assessing how restrictive the income thresholds are compared to the consumption basket and using microsimulation techniques to evaluate the potential welfare impacts of the reform. By delving into different policy scenarios, we aim to gain a deeper understanding of the potential implications and ramifications of these policy adjustments, particularly in their impact on poverty incidence, poverty gap, and income inequality.

Assessment of the MSA and Heating Scheme effectiveness and poverty reduction impact under Baseline Scenario (before the Policy Reform)

**Our analysis indicates that the take-up of the MSA is significantly lower than the heating allowance.**

Our estimated take-up rates are 56% for MSA and 99% for the heating allowance. These findings bear significant policy implications, suggesting potential areas for intervention to tackle barriers to enrollment in safety net programs.

**Our results show that while the MSA scheme exhibits strong targeting, its coverage of the poor and**

**generosity are relatively low** . In this baseline scenario, we simulate the benefits in line with the 2020 income data, which is part of the CEQ fiscal incidence analysis. We consider the existing MSA rules and replicate the total number of beneficiaries based on administrative data. This scenario illustrates that the MSA benefit reaches only 11.5% of households in the first decile (Figure 5, Panel a) and extends to just 2.9% of poor households. Regarding benefit incidence, the MSA benefits are concentrated in the first decile (Figure 5, Panel b). When looking at adequacy, the benefits provided by the MSA account for just 4.4% of the pre-fiscal income (Market Income plus pensions) for the first decile, indicating a relatively low level of generosity (Figure 5, Panel c). In terms of its impact, the MSA shows no significant effect on income inequality, and its marginal impact on poverty reduction is relatively modest, with a noticeable reduction in the poverty gap by only 0.11 percentage points.

**Comparing these findings to previous assessments, the MSA's coverage for the first quintile in 2020 mirrors the previous estimate.** Although the level of generosity is relatively low, it does exhibit a slight improvement compared to estimates from 2013/2014 (World Bank, 2020). These results underscore the need for further evaluation and potential adjustments to the MSA scheme to enhance its effectiveness in addressing poverty and income inequality.

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