allowance program offered some relief against energy poverty for the poor before the reform, there is room for improvement in its effectiveness. Challenges such as low coverage of social assistance programs, stringent eligibility criteria, and a lack of clear administrative rules for the heating allowance program likely contributed to limitations in its effectiveness.

# III. Methodology and Data

## Data

### **This study uses microdata from different sources, including an income survey, a household budget survey, budget data from fiscal accounts and other administrative registries, and estimates of a minimum consumption basket from previous studies.**

### **This study relies primarily on the cross-sectional component of the 2021 Bulgaria SILC (Survey on Income**

**and Living Conditions).** The primary aim of the income and living conditions survey, as part of the European Statistical System, is to furnish timely and comparable data on income distribution and social inclusion. The nationally representative survey delivers insights into current (cross-sectional data) and longitudinal changes in income, poverty levels, and social exclusion. The reference population for EU-SILC comprises all private households and their residents within the country's territory during the data collection period. Individuals in collective households and institutions are generally excluded from the target population. Until 2015, the survey operated on a four-year rotational panel from private households, with a sample size of approximately 7,300 addresses/households distributed across all regions annually. All members aged 16 years or more in the sampled household are surveyed. Household participation spans four consecutive years, with a rotational design that facilitates both cross-sectional (current year data) and longitudinal (data for households participating in the survey for at least two consecutive years) insights. Each year, one rotational group is replaced by another to maintain the continuity of data collection. The survey methodology encompasses various social areas, including basic demographic characteristics of households and their members, monetary indicators reflecting living standards and social stratification, non-monetary indicators related to living standards, economic activity, employment, unemployment, social services or programs, and household participation in them.

**Since the EU-SILC focuses mainly on income, the study also relies on the 2021 Household Budget Survey, which provides critical consumption data to estimate consumable income in the commitment to equity (CEQ) model.** The household budget survey in Bulgaria aims to gather data on income, expenditure, consumption, and living standards, focusing on understanding changes over the years. The unit of observation is an ordinary household, whether consisting of a single person or multiple individuals sharing meals and an expected budget. The sample size has varied over the years, with 3,000 households observed up to 2009 and a subsequent adjustment to 3,060 households divided into three subsamples since 2010. The selected households participated in the survey for one year, with a rotation sample method implemented.

**Additionally, the study relies on external EC estimates of the consumption basket and administrative data on beneficiaries of social programs** . The consumption basket serves as a reference basket to evaluate the restrictiveness of the income thresholds. As there is no official measurement of the

12