Verifying Participant Eligibility, Program Evaluation, Advisory Committee

3. Verifying Participant Eligibility

Program applicants will be asked to fill out an application form, indicating their household income. Due to the prevalence of informal sources of income, program staff will have to rely on a CASHPOR House Index system in order to verify the applicant’s given income information. By looking at the structural condition of the household, the quality of its walls, roofing, height, materials, and amenities, program staff can make an educated judgment as to the verity of the applicant’s stated household income.

The counselors will be recruited from the local community therefore they will be able to help the program officer to decide on the applicants’ eligibility.

The procedure is based on written and formalized forms and documents.

4. Program Evaluation

4.1 Asset-Building Evaluation

Neoclassical economists make no distinction in the effects of asset ownership over income. Income allows consumption and an asset is simply stored income for future consumption. However, Michael Sherraden argues that the accumulation of assets yield positive welfare effects beyond consumption. Assets, Sherraden claims:

Improve household stability;
Create an orientation toward the future;
Stimulate the development of other assets;
Enable focus and specialization;
Provide a foundation for risk taking;
Increase personal efficacy;
Increase social influence;
Increase political participation; and
Enhance the welfare of offspring

Therefore, in order to test the validity of these effects, the evaluation of the asset-building component must not only measure success rates, but also measure indicators across all nine of these purported effects.

Among participants in particular, evaluation should look to measure

Changes in self-esteem
Changes in welfare of offspring
Changes in household stability

5. Advisory Committee

In order to engage policymakers and advocate for welfare reform, the program has identified the following to act as members of the program’s advisory committee:

Representative from the Ministry of Equal Opportunities (Mr Andor Ürmös)
Representative from the Ministry of Labor (Mr István Szirmai)
Representative from the Ministry of Education (Mr Gábor Daróczi)
(Independent) welfare expert (Mr Péter Mózer, ELTE University)
Roma leader (Mr Dávid József Daróczi, counsel to the Pime Minister)
Representative from Bonyhád community (László Babai)

Annex A – Asset Building Match Rate Calculation

Based on informal focus group discussions in Bonyhád, Erdöbénye and Szendrőlád, community members identified the following asset goals:

Asset	Cost	USD
Driver’s permit	HUF 100,000	$500
Home computer	HUF 180,000	$800
Start-up of enterprise	HUF 300,000 – 500,000	$1,500 – $2,500
Bathroom construction	HUF 300,000 – 500,000	$1,500 – $2,500
Home expansion/completion/ repair	HUF 500,000 – 800,000	$2,500 – $4,000
Home purchase	HUF 500,000 – 800,000	$2,500 -$4,000

The people whom we interviewed stated that the average monthly income for a family of four receiving public assistance is HUF 60,000, and that their realistic monthly savings rate would be HUF 2,000 to 6,000.

Therefore we have arrived at the following match rates and match ceilings in order to shorten the accumulation period:

However, in order to ensure that the accumulation period does not fall below 3 months, we have set the following ceilings on deposits eligible for match:

Annex B – Asset Building Income Requirement Calculation

Income requirements were based on the following projections per asset[4]:

1. Driver’s Permit

Match Rate: 200%, Monthly Match Cap: HUF 6,000, Time Cap: 12 months

In order to meet the savings goal within 12 months, candidates must demonstrate household monthly income near, or exceeding, 25% of the asset cost
The household monthly income exceeding 100% of the asset cost would call into question the candidate’s need forthe program.

2. Home Computer

Match Rate: 200%, Monthly Match Cap: HUF 10,000, Time Cap: 18 months

In order to meet the savings goal within 12 months, candidate must demonstrate household monthly income near, or exceeding, 25% of the asset cost
The household monthly income exceeding 150% of the asset cost would call into question the candidate’s need for the program.
Assets costing more than HUF 250,000 are not eligible as they cannot be attained within 18 months.

3. Start-up of Enterprise, Bathroom, Home Repair, Home Purchase

Match Rate: 300%, Monthly Match Cap: HUF 20,000, Time Cap: 24 months

In order to reach the savings goal within 24 months, candidates must demonstrate a monthly household income near or exceeding 10% of the asset value.
Household monthly income exceeding 100% of the asset value, or HUF 350,000, would call into question the candidate’s need for the program.
Assets costing more than HUF 550,000 million are ineligible.

[1] Formal business startup is impeded by prohibitively high capital requirements and complex regulation. Post-secondary and vocational education is free.

[2] http://www.imf.org/external/country/HUN/index.htm

[3] It is related to the amount of the down-payment.

[4] According to World Bank data, Hungarian GNI per capita (Atlas method, current US dollars) is $689 per month, or HUF 137,833. Absolute poverty line is defined as $4.30 PPP per capita per day (HUF 860 per day / HUF 26,150 per month). According to informal focus group, a family of four whose only source of income is public assistance receives $300 per month, or HUF 60,000.