The means-tested benefit system in Bulgaria is failing to reach those most in need, according to new research from the Institute for Social and Economic Research.
The study, Evaluating the performance of means-tested benefits in Bulgaria by economist Iva Valentinova Tasseva, examines four means tested benefits in Bulgaria – the guaranteed minimum income, the heating allowance, the benefit for young children and child allowance – and finds that Bulgaria has very high non-take up rates. Around 40 per cent of those eligible do not receive the benefit for young children and more than 60 per cent of those entitled do not receive the three other benefits. Conversely, the study also found a large proportion of the non-poor, whose incomes exceeded the threshold for eligibility, who were still receiving support.
Ms Tasseva explains:
“Despite being means-tested and being very progressive, the social assistance benefits cover only a quarter of the poor population. On the other hand child benefits are almost evenly distributed across the population because of the generous income test.
However, they are failing to provide income support to all poor households with children, leaving around a third of these families unsupported by state benefits.
State benefits in Bulgaria do not contribute to a large reduction in poverty – in fact this study shows poverty is reduced by less than 4 per cent."
Using the tax and benefit simulation model EUROMOD economists at ISER found that even with full take up and perfect implementation, the current Bulgarian benefits system would still not reduce poverty levels significantly.
Using EUROMOD they are able to compare five different reform scenarios to show how the Bulgarian system could be re-structured to meet the policy objective of supporting the poor and vulnerable.