In 2011 the Slovak Republic initiated reform of the non-contributory social assistance system. A key concern of the government, as it launched broad ranging reforms, was whether social assistance cash transfers, and in particular the poverty targeted ‘Benefit in Material Need‘, created disincentives to work. To enhance the evidence base for the reforms, the government engaged the World Bank to evaluate the performance of non-contributory social assistance cash transfers, and in particular the Benefit in Material Need.

This paper summarizes the social safety net assessment conducted by the World Bank, including (a) spending on and coverage and adequacy of social benefits; (b) review of the main design parameters, draft legislation, and implementation arrangements for the Benefit in Material Need program; and (c) analysis of the incentive structure created by the tax and benefit system, and a profiling of the recipients of the Benefit in Material Need, to identify potential barriers to greater participation in the labor market. In order to better understand the broader causes behind persistent unemployment, the assessment profiles all of the unemployed and inactive population in the Slovak Republic, developing indicative groups that can be targeted using tailored programs to increase their employability. Recommendations provided in the report include addressing quality of education and skills for incoming labor cohorts and increasing institutional capacity of Public Employment Services.