Cash Social Assistance: Lithuanian Experience and Reform in Ukraine

Abstract

The aim of this article is to analyse the reform of determining social assistance benefits in Ukraine, comparing it with Lithuania’s experience. Previous studies have not examined the reform of calculating the amount of social assistance through a direct comparison of two countries Ukraine today and Lithuania’s trajectory since the 1990s. Addressing this gap is particularly relevant now, as Ukraine is redesigning its income‑tested assistance during a period of institutional transformation, war‑related pressures, and heightened social vulnerability.

The study applies a comparative research design that juxtaposes two post‑transition welfare systems undergoing institutional restructuring. Lithuania represents a mature post‑transition case, where income‑tested social assistance has evolved over three decades, while Ukraine constitutes a current reform case, redesigning its benefit calculation system under conditions of accelerated institutional change. This design enables the identification of structural similarities, path‑dependent constraints, and recurring policy challenges in the development of income‑tested assistance.

Lithuania provides an appropriate policy lesson for Ukraine because both countries share comparable legacies of Soviet social policy, similar trajectories of welfare state formation, and reliance on income‑tested assistance as a core anti‑poverty instrument. Lithuania’s experience with replacing the minimal subsistence level by the state‑supported income and the subsequent long‑term stagnation of this benchmark offers a relevant cautionary example for Ukraine as it introduces a new basic amount for benefit calculation. The Lithuanian case demonstrates how politically convenient but infrequently updated benchmarks can erode the adequacy of social assistance over time.

To achieve the aim, the study employs legal document analysis in Lithuania and Ukraine. It also uses secondary data from the Monitoring of Social Assistance Effectiveness in Lithuania and Eurostat. In addition, the analysis incorporates previous academic research and reports issued by international institutions.

The findings reveal notable similarities between Ukraine’s current reform and Lithuania’s reforms in the early 2000s. Lithuania’s experience with the state‑supported income introduced as a replacement for the minimal subsistence level demonstrates that social benefits failed to ensure even the minimal subsistence threshold. The state‑supported income remained largely unchanged after 2003, resulting in a persistent gap between benefit levels and actual living costs. Based on this experience, Ukraine should closely monitor the relationship between its newly introduced basic amount and the minimal subsistence level to avoid similar long‑term stagnation.

This comparative analysis contributes to the broader welfare state discourse in Eastern Europe, revealing structural parallels in the evolution of social assistance policy in Lithuania and Ukraine. It also adds to wider debates on the design of income‑tested assistance in post‑transition contexts, underscoring the importance of maintaining a realistic, regularly updated calculation base to ensure effective income support.

Policy implication: Maintaining a regularly revised and empirically grounded calculation benchmark is essential to prevent benefit erosion and ensure the long‑term adequacy of income‑tested assistance.