Our guest blogger Ilene Zeitzer, is President of Disability Policy Solutions. An internationally recognised expert on comparative disability policy, Ms. Zeitzer has worked in more than 65 countries on various disability-related issues.

In social protection policy, there is probably no better example of the unintentional consequences of well-intentioned policies than poverty targeting and, most especially, how it is carried out through the common use of Proxy Means Tests (PMTs) in particular when households include a disabled member. The goal of PMTs is to target only the ‘poorest of the poor’ with the aim of having the greatest impact on those in the lowest financial strata. While the goal is admirable, in reality such targeting fails to deliver, with generally high exclusion errors (rates of 50 per cent or more are common). In this respect, it is worthwhile considering that social insurance systems often use, as the measure of their efficacy, three recognised benchmarks: (1) quality; (2) effectiveness; and (3) efficiency. Based on those measures, poverty targeting programmes – in particular those using PMTs – are failures.

How do PMTs Work?

PMTs use a methodology to estimate the income of a household by measuring the household’s assets (known as proxies), In other words, household characteristics are used to predict the welfare level of a household. For example, the proxy value for someone whose house is made of brick, rather than palm leaves, would logically be much higher. How much higher requires empirical data. Hence the imputed values usually come from data in National Household Income and Expenditure Surveys of the individual country. These surveys provide household characteristics such as: the type of dwelling; the type of assets the household owns; indoor plumbing; heat; etc. as well as information about the composition of the household such as ages, genders and occupations of the members. Economists then use multiple regressions to estimate the relationship between the variables that describe the characteristics of the household and the monetary value of the household consumption. Subsequently, they typically set up an algorithm, assigning various weights to the variables. The PMT approach is often used to target cash transfer programmes aimed at those most in need. The common approach is to use the PMT algorithm to construct a poverty line that is then applied to households to see if they are poor enough to qualify.

Why are PMTs Generally More Problematic for Families with a Disabled Member?

Over the past few years, various research projects conducted by Development Pathways – and others such as Martin Ravallion – have consistently demonstrated the problematic nature of using PMTs to undertake poverty-targeting. Essentially, as mentioned above, they are highly prone to exclusion errors. However, even more pernicious is their common pairing with poverty-alleviation programs aimed at families with a disabled member. Economists who specialise in studying disability – such as Daniel Mont, Sophie Mitre and Michael Palmer – have frequently raised objections to the use of PMTs in households with disabled members because of failures of the PMT to adjust sufficiently to the extra costs experienced by households as the result of disability. Consider the following from Mont:

People with disabilities have higher costs of living because of the increased need for medical care, assistive devices, transportation, modified housing, etc. A poverty line is drawn at a level considered to represent a minimal standard of living. But a family with a member with a disability has extra costs. Therefore, at a given level of consumption they have a lower standard of living. If the poverty line is adjusted for these extra costs, then the poverty rate of households that include people with disabilities rises significantly. For example, in a study from Vietnam the unadjusted poverty rate for people with disabilities was about 17 percent, but it was 22 percent when adjusted for the extra costs associated with disability.[1]

The argument that the PMTs frequently undervalue the full impact of disability on a household’s actual standard of living is certainly true, not only because of the extra costs of having a disability, but also owing to the frequent need for another family member(s) to be a caregiver, thereby resulting in lost income or other forms of contributing to the household wellbeing such as subsistence farming. This withdrawal from the labour market is often not recognised by PMTs unless there has also been a substantive change in household assets (such as moving into lower quality accommodation).

What is the Effect When PMTs are used to Determine Eligibility for Households with a Disabled Member?

Field research in several low-and middle-income countries where disability cash transfers are linked to poverty testing has revealed another deleterious effect: the PMT totally ignores the reason why certain higher cost commodities might be needed by a family with a disabled member. Let me explain through two examples.

The first example is from Egypt which, in 2015, rolled out two new programmes called Takaful and Karama (Solidarity and Dignity) that are aimed at poverty alleviation as part of a larger social assistance programme. Originally funded at $400 million by the World Bank – with an additional $500 million added by the Bank in July 2019 – the programmes are implemented by the Ministry of Social Solidarity (MOSS). Takaful is a conditional cash transfer programme targeted at poor families, with the goal of increasing food consumption, reducing poverty, encouraging families to keep children in school and providing them with necessary health care. Families who qualify for Takaful receive 325 Egyptian pounds (EGP) (USD $20.10) a month provided that they meet the requirements such as 80 per cent school attendance.

Karama, in contrast, is an unconditional cash transfer for Egypt’s poor older people (65+), those with severe disabilities or diseases and orphans. The benefit is paid to the individual, rather than a family unit and, in 2018, the amount was raised to 450 EGP (USD$ 27.85) per month. A poor family with a severely disabled member can receive both benefits but, first, it must qualify for Takaful’s Proxy Means Test, otherwise the disabled member receives nothing.

Originally the Bank economists insisted that the disability evaluation had to happen before the poverty evaluation. That resulted in families being told that the disabled member qualified only to be turned down afterwards during the poverty assessment. Our team recommended reversing the procedure, but it took MOSS to force the Bank to comply.

During field work near Luxor, the director of the Social Unit (the local government entity) in the town brought our small group to see a family because she could not understand how this specific family could have been found as not poor enough to qualify for Takaful and Karama. We entered a clay dwelling with a large hole in the roof. An extremely disabled child was lying on a mat on the dirt floor. Given his multiple problems – total paralysis, serious intellectual deficits, impaired speech and seizures – he likely had Cerebral Palsy (although he had never been diagnosed). The child had no wheelchair and could not sit up, so he lay there all day. The family were 20 km away from any services and lived in a Governorate that the Egyptian Government had designated as extremely poor.

There was almost no furniture in the house, except for a small refrigerator, the size of a hotel minibar. They also had inherited a small piece of land that was not arable and was at a considerable distance from their home. The economist in the group who helped develop the algorithm immediately pointed to those two possessions as likely reasons explaining why they did not qualify. The PMT survey had noted that the family had a refrigerator, despite the fact that this was merely a mini bar and needed to store the medicine for the child’s seizures. The land was virtually useless and was not generating any income for the family, but that too had a rather high imputed value based on its size, rather than its actual financial utility.

These stories were repeated time and again in different Social Units and, as a result, MOSS insisted that the World Bank economists construct a more generous poverty line for families that included persons with disabilities.

The other example relates to the fact that PMTs often create barriers that are totally counter to good social inclusion policies. For instance, in Cambodia, during field work, we saw a very poor woman with two children, one of whom was disabled. Their one “valuable” possession was a small, used motorbike. The Commune leader said that possessing any item with a value of over US$25 was all it took to make them ineligible for the ID Poor Card (which used a PMT), a prerequisite for the disability-based cash transfer. The mother explained that she used the bike to take her daughter to school, because she could not walk and, therefore, would otherwise not be able to attend. She said she felt it was more important for her child to get an education, then to have a US$5 a month benefit. Thus, the dilemma – give up the motorbike to qualify for a low-level cash transfer or keep it and allow the child to be educated?

These challenges are created by a PMT approach that too often does not provide adequate weight for the conditions of disability, nor for supporting good inclusion policies. Moreover, the enumerators of the PMT are never trained to ask about the anomaly, in other words to query why an obviously poor family with a disabled child or adult has some “valuable” possession that can immediately disqualify them.

We know that PMT is a very poor quality poverty targeting mechanism. But, if governments and donors insist on using it, could I please make the plea that the effort is made to adapt it to the needs of children and adults with disabilities, many of whom are unjustly excluded from social security benefits, in effect due to the fact that they are disabled.

[1] [2017/02/08 Mont, Daniel, Disability and poverty: a complex and nuanced issue; http://gap.leonardcheshire.org/disability-and-poverty-a-complex-and nuanced issue/

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