The effectiveness of minimum income benefits in poverty reduction in Spain

Abstract

One of the greatest peculiarities of the Spanish system of minimum income benefits is its complex organisation. There is a wide variety of specific means‐tested benefits whose management and financing depend on the central government. They are designed to protect different contingencies, providing very different levels of protection. On the other hand, the general risk of poverty is covered by regional governments without any coordination and financing from the central government. In this article, we provide a picture of the possibilities and limits of the current set of welfare benefits, focusing especially on its effectiveness in terms of reducing poverty. Our findings show that most benefits are clearly insufficient to cover the risk of poverty in terms of both incidence and intensity. The results show the need for the redesign of the system to better articulate existing benefits in order to prevent new forms of poverty and to respond to emergency situations.Key Practitioner Message: • The Spanish system of minimum income benefits consists of a varied mosaic of benefits that provide very different levels of protection for individuals or households with similar needs; • The contribution of these benefits to the reduction in poverty in Spain is very modest and significantly lower than that of contributory pensions; • The protection provided by MIBS is also unequal by population categories.