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By Ganga Tilakaratna
Social protection has been increasingly viewed as an important tool for addressing poverty, vulnerability, inequality, and social exclusion.
Sri Lanka has a long history of providing social protection to its population. Social protection policies and programs such as the free education and healthcare 
provision and food subsidy programs have been implemented by the successive governments since the 1940s.
At present, there are many social protection programs targeting vulnerable segments of the population: the poor, elderly, disabled, children and women. These programs vary from cash and in-kind transfers to pensions, insurance, and livelihood development programs. They can be broadly categorised as: (i) social insurance, (ii) social assistance, and (iii) labour market programs as shown in Figure 1.
Despite the multitude of programs, there are several gaps and weaknesses in the current social protection system.
Low coverage and poor targeting
Low coverage and poor targeting are two most common problems in the majority of social protection programmes in Sri Lanka. Programs designed for the poor, elderly, disabled and other vulnerable groups often cover only a fragment of the eligible population. The programs for schoolchi
ldren such as the free textbook and free uniform programs that are almost universal in coverage are perhaps the only exception.
Limited coverage is largely a result of budgetary constraints. Many programs also suffer from targeting problems. A recent IPS study reveals that only less than a half of the households in the poorest decile (47.4%) receive benefits under the Samurdhi cash transfer program (see Figure 2). However, there are 3-15% households in the top four deciles who receive Samurdhi benefits.
These figures indicate the severity of the targeting problem of the Samurdhi program – both inclusion and exclusion errors. The extent of targeting errors of the other social protection programmes is difficult to measure owing to the lack of data. In addition, many programs lack clearly defined eligibility criteria and an entry and exit mechanism, which too has contributed to the targeting problems in social protection programs.
Inadequacy of benefits
The value of monthly cash transfers received under most social assistance programs remains low. Under the Samurdhi income transfer program, the maximum amount received by a family was Rs. 1,500 per month until the end of 2014 (while the minimum was Rs. 210), which is far below the minimum requirement to meet their basic needs.
The net cash value received by a family was much lower than the above amounts since there are deductions for compulsory savings, social security and the housing fund. However, as per the Department of Samurdhi, these subsidy amounts have been increased since January 2015, with a minimum of Rs. 420 and a maximum of Rs. 3,000 per month.
The monthly allowances provided under the elderly assistance program and Public Assistance Monthly Allowance (Rs. 250-Rs. 500) are also far inadequate to cover the basic expenses like food. According to the national poverty line, a person requires around Rs. 3,800 per month to cover his/her consumption expenditure at a minimum level.
Budgetary constraints and inequitable resource allocation
Many social assistance programs suffer from budgetary constraints, which restrict them from expanding their coverage and improving the benefit amounts. Moreover, a recent IPS study reveals considerable inequity with regard to allocation of funds within the current social protection system.
Over 80% of the total social protection expenditure goes to retirement benefits of formal sector workers (e.g., pensions and EPF/ETF) while the expenditure on social assistance programs such as Samurdhi, disability assistance and elderly assistance as well as expenditure on labour market programs for vulnerable groups remain low.
In particular, the study finds that pensions for the public sector workers account for about 55% of the total social protection expenditure. However, pensions benefit only a smaller share of the country’s elderly population.
Lack of coordination
Currently, there are several ministries, departments, and provincial councils carrying out different social protection programs for various vulnerable groups. Lack of coordination among these institutions and programs increases the cost of social protection provision and leads to overlaps in beneficiaries served under these programs.
Way forward
It is important to improve ‘targeting’ in programs such as Samurdhi, and make better use of the limited resources available for social protection for the benefit of the ‘neediest’ groups. This would help improve the coverage of the programs as well as the amounts of benefit.
Moreover, strengthening the coordination among the programs implemented by various institutions in order to minimise duplications is important to enhance efficiency and thereby improve coverage and benefit levels.
Given the rapid ageing of population, reforms are also required for the pension scheme in order to reduce the burden on the government budget and make the program more sustainable. Such reforms would also help release funds to extend social protection to elders who do not receive retirement benefits or any other assistance.
(Dr. Ganga Tilakaratna is a Research Fellow and the Head of the Poverty Unit at IPS. To view this online and to comment, visit ‘Talking Economics’ – www.ips.lk/talkingeconomics.)
