Fighting poverty

The reform of the social assistance programme in Albania - improvements and future challenges

While committed to reform its social assistance programme, Albania is still facing challenges in ensuring adequate income assistance for all persons in need. A recent ILO assessment explores the key achievements and future issues.

News | 24 May 2023

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In recent years, Albania has implemented a series of reforms of the main cash social assistance scheme for poor families in Albania, called the Ndihma Ekonomike (economic assistance) programme.

In this context, the ILO conducted an analysis to assess the effectiveness of the economic assistance programme within the Joint UN Programme “Strategic policy options for SDG financing”.

The reform has so far made several key achievements:
  • The Albanian government adopted a new Law on Social Assistance in 2019, which simplified the application process of social assistance benefits. A proxy means test using a simple scoring formula was introduced for determining the eligibility for social assistance in the Management Information System. This contributed to the detection and reduction of false declarations. The reformed programme has significantly reduced the inclusion errors in urban areas, although they still persist in rural areas.
  • The reformed programme provides higher benefits for more targeted beneficiary families. Partial benefits have been abolished and a full benefit is paid to all beneficiaries. The amount of the social assistance benefit has been increased several times during the COVID-19 pandemic period between 2020 and 2022.
  • As the reform was gradually implemented, the number of the social assistance beneficiary families decreased by 37.2 per cent between 2012 and 2021 (Figure 1). In 2021, 68,246 families were receiving social assistance benefits. The estimated number of beneficiaries was 250,000 which accounts for 9.0 per cent of the total Albanian population.
  • The government is currently focusing on the National Exit Programme, especially the economic reintegration of the working age social assistance beneficiaries into the labour market by a referral from the State Social Service to the National Agency for Employment and Skills.
The reform has not been fully completed. Despite these positive achievements, Albania is facing a number of challenges. Especially, concerns remain regarding the coverage and adequacy of the benefit level of the reformed social assistance programme. The main findings and conclusions of our analysis can be summarized as follows:

Firstly, a number of indicators suggest that the social assistance benefit levels are low. Despite the substantial increase in the social assistance benefit for families with multiple dependent children in 2022, the resulting level is still less than 40 percent of the minimum wage. 

Secondly, the social assistance programme has a limited impact on reducing the risk of poverty. In 2020, the estimated number of social assistance beneficiaries was 8.8 per cent of the total population, which accounts for about 40 per cent of the population at risk of poverty (Figure 2).

Thirdly, the reformed programme enforces strict compliance with reporting and work requirements. In particular, working age family members should register as jobseekers in the employment office and participate in vocational trainings. Failure to comply with these conditions leads to the suspension of the benefits[PM2] . One should carefully analyse if this enforcement measure produced some unintended exclusion.

Fourthly, the new social assistance law sets the maximum period of social assistance for five years. In addition, the scoring formula used in the proxy means test for deciding the eligibility of social assistance benefits is not publicly accessible in order to prevent fraudulent claims. However, the non-disclosure of key coefficients undermines a transparent decision process.

Fifthly, the economic reintegration of the working age social assistance beneficiaries into labour market has not been satisfactory. An effective coordination mechanism between Social Service Offices and Employment Offices should be created both at the central and local levels. 

Through its continuous effort to fully implement the reform of the social assistance programme, Albania must build an adequate, equitable and sustainable social protection system that leaves no one behind.
Figure 1. Number of NE beneficiary families by size, 2010-2021

Source: Institute of Statistics of Albania

Figure 2. Effects of social transfers on reducing poverty risk, 2020

Source: Institute of Statistics of Albania