Dimitri Gugushvili, January 2013

Abstract
Shortly after winning elections the new government of Georgia has announced a number of important measures aimed at strengthening the social protection system. These include increasingn pensions, doubling the levels of means-tested social assistance, introduction of tax allowances for low earners, strengthening labour regulations and provision of universal basic health insurance. In this paper we project the possible impact of increased social transfers on poverty by using data from the Integrated Household Survey, carried out by Geostat. We argue that while increased transfers will considerably reduce poverty, a third of poor families will see no improvement as at present they are excluded from the social protection system. To fill this gap we propose alternative means-testing criteria, whereby households’ eligibility is defined by their income-generating capacity and actual needs rather than by hypothetical welfare scores primarily defined by possession of durable items.