Reaching the Right Households: Reforming Social Aid in Sri Lanka

Social protection programs are central to Sri Lanka’s recovery as it gradually emerges from its most severe economic crisis to date, which occurred in 2022. The crisis pushed many households into or near poverty, with families struggling due to income losses and rising prices. At the time, existing social protection systems were inadequate in both coverage and effectiveness, failing to provide sufficient relief for low-income families. Efforts to expand these programs were constrained by the government’s limited capacity to secure funding to address growing socioeconomic challenges. Poverty rose to 25% in 2022, up from 11.3% in 2019 (World Bank, 2023). This sharp increase highlighted the urgent need for improved social protection mechanisms to help individuals manage economic hardship without major disruptions to their consumption.

In response, the Government of Sri Lanka introduced Aswesuma^[1] as a temporary replacement for the existing Samurdhi^[2] program. This initiative aimed to address the shortcomings of previous social protection efforts and establish a more targeted system to ensure that only the most deserving individuals receive cash transfers, with the goal of helping them move out of vulnerability. The program uses a multidimensional approach to assess applicants’ eligibility, employing 22 indicators across six dimensions: education, health, economic status, housing conditions, family demographics, and assets. These indicators are designed to comprehensively evaluate household deprivation and ensure that assistance reaches those most in need. Beneficiaries receive varying monthly cash transfers for periods ranging from six months to three years, depending on the severity of their poverty status. The most deprived households, as determined by the evaluation criteria, receive larger transfers for the maximum duration.

Despite the program’s multidimensional selection criteria, concerns have been raised about its effectiveness. Adapted from a study published by the Institute of Policy Studies of Sri Lanka (IPS), this article highlights the need to refine Aswesuma’s eligibility criteria and data collection methods to better identify and support households facing both chronic and transient poverty, incorporate regional and climate-related factors, and consider employment-linked transfers to promote long-term self-reliance and poverty reduction.

Concerns with eligibility criteria

Some of these relate to the inclusion of households not facing economic hardship and the exclusion of families living in poverty. There’s a need to refine the current criteria to better identify households experiencing temporary financial difficulties, even if they own certain assets.

Challenges in data verification

Another area for improvement in Aswesuma is the difficulty officials face in verifying household information related to eligibility. For example, errors may occur during data collection if households withhold accurate information about their poverty status to qualify for benefits or are unable to recall details correctly. These inaccuracies can reduce the program’s effectiveness by excluding people who genuinely need help and undermining efforts to create a more objective social protection system.

Improving follow-up and monitoring

Better data collection methods during follow-ups with Aswesuma recipients would help improve the criteria. This would allow the program to monitor households’ economic conditions and track improvements resulting from cash transfers. The main goal of these transfers is to help participants move out of poverty by improving their living situations. Therefore, follow-up assessments should document any changes and measurable outcomes related to food insecurity or poverty levels. These outcomes should go beyond the current Aswesuma indicators to better reflect improvements in well-being.

Addressing chronic and transient poverty

Ongoing updates to Aswesuma should also improve its ability to target people experiencing both chronic and transient poverty. Chronic poverty refers to long-term deprivation, often passed down through generations, while transient poverty involves short-term income or spending losses, even when long-term resources are sufficient to stay above the poverty line (Duclos et al., 2078). The current deprivation score mainly focuses on chronic poverty, emphasizing household assets and housing conditions (13 of the 22 indicators are based on multidimensional measurements).

Gaps in coverage and food insecurity

While addressing chronic poverty is important, it’s also necessary to consider temporary poverty. A large portion of the population (households ineligible for Aswesuma but who experienced food insecurity in the past 12 months) remains underserved. Of the 20% of the population that faced food insecurity, nearly 40% are not eligible for Aswesuma.

Expanding the framework for vulnerability

Given the current economic climate, with rising costs and income losses, measures of temporary poverty could help identify both long-term and short-term hardship, regardless of assets or housing. Including data on household members’ recent employment experiences, especially job loss, could offer a more complete picture of who needs support. The amount of cash transferred is unlikely to directly improve indicators related to household assets or other long-term poverty markers, as those require larger investments in education, health, and infrastructure (Lipton and Ravallion, 1995).

Climate vulnerability and regional differences

Climate vulnerability also adds complexity to household conditions. Although it’s difficult to measure, including it would help the program reach more at-risk groups in Sri Lanka.

The current set of indicators can also be improved by accounting for both visible and hidden factors that influence household selection. The relevance of indicators varies by region and demographics. For example, vehicle use and electricity consumption depend on the availability of alternatives, which differ across the country. Rural households may lack access to transportation or electricity not because of poverty, but because those services aren’t available. Regional adjustments in how deprivation is measured could lead to more accurate assessments of poverty in both rural and urban areas.

Asset ownership and agricultural work

Asset indicators like ownership of agricultural machinery or land are influenced by both observable and hidden factors, including the decision to work in agriculture. This suggests a need for additional support programs, such as insurance for agricultural workers. In some areas, deprivation in agriculture-related indicators may actually reflect higher well-being, depending on location and market access.

Labor market impacts and conditional transfers

Finally, the program’s impact on labor market outcomes should be considered. The study predicts a drop in labor force participation for both men and women under various scenarios. This aligns with economic theory, which suggests that higher non-labor income reduces the need for paid work (Garganta et al., 2017). However, building resilience through employment is key to long-term poverty reduction. In some cases, transfers tied to employment have shown fewer negative, or even positive, effects on labor participation (Berlinski et al., 2024). While cash transfers are helpful for addressing food insecurity, exploring conditional transfers that encourage work and self-reliance is important for helping people move out of poverty.

The program was fast-tracked to meet urgent needs, but the underlying targeting system and registry require careful review. It is essential to consolidate welfare schemes and invest in stronger data systems, supported by development officers working at the community level.

The revised cash transfer, based on an integrated social registry, marks a major step forward in reducing food insecurity and supporting vulnerable households. The foundation of the current social protection landscape reflects a shift toward a more transparent and better-targeted system.

However, long-term success will depend on Sri Lanka’s ability to balance short-term relief with efforts to promote labor force participation, reduce dependency, and support individuals in moving out of poverty. To build resilience, social protection must become more adaptive and responsive not only to deprivation but also to the evolving risks that shape household vulnerability in Sri Lanka today.

^[1] Aswesuma, which means “strength” or “empowerment” in Sinhala, is a social welfare program introduced by the Government of Sri Lanka in 2023. It replaced the older Samurdhi program and aims to provide targeted cash transfers to low-income households, based on a multidimensional poverty assessment.

^[2] Samurdhi, which means “prosperity” or “well-being” in Sinhala, was Sri Lanka’s longstanding national poverty alleviation program prior to Aswesuma. It provided cash and food stamps to selected low-income families but faced criticism for poor targeting and limited impact.

P. Amarasinge. 2025. Estimating Aswesuma Effectiveness. Institute of Policy Studies Sri Lanka: Colombo.

P. Amarasinge. 2025. Recalibrating Aswesuma: A Move Towards a Dynamic and Adaptive Social Registry in Sri Lanka. Talking Economics. 12 June.