Timor-Leste's COVID-19 near universal cash transfer supports households

The government of Timor-Leste introduced the country’s first near universal cash transfer of USD 200 in April 2020 to help people cope with the impacts of the COVID-19 crisis. The transfer was provided to all households with a monthly income of less than USD 500. The policy was well received and led to increased support for universal social protection in East Timor. Over three quarters of people surveyed were either satisfied or very satisfied with the government’s COVID-19 response.

On March 28, 2020, the government of Timor-Leste announced a state of emergency in response to the COVID-19 pandemic involving travel restrictions, social distancing, and school closures. Disruptions caused by the pandemic were expected to have widespread negative impacts on livelihoods and coping strategies for people across the country, particularly those living in or near poverty. Among support packages introduced to help people cope with these disruptions, the government announced a universal unconditional cash transfer for all households without a regular individual monthly income of USD 500. The transfer reached approximately 300,000 households in all 452 villages across the country.

The universal approach was adopted to avoid exclusions that might otherwise occur through a targeted approach to social protection. An existing national registry was used, but people were invited to join the registry to receive the payment. Despite the universal approach of the transfer, some important exclusions were noted. Women in shelters were not reached by the transfers, and some people were not recognized by their local authorities.¹ One survey found that LGBTI respondents did not register themselves or their families due to advice from local authorities or a widespread perception that people living alone or in same-sex couples were not considered to be a household.²

Overall the policy has been well received, while noting these exclusions. Based on the policy’s success, the government of Timor-Leste has announced further universal cash transfers, including piloting one for all children, pregnant women, and children with disabilities in three municipalities that will be expanded country-wide by 2028.

Implementation

The identification of eligible households was done through an existing household registration system, Ficha de Familia, managed by the Ministry of State administration. This household registration system had been established to register households for the purposes of the National Village Development Program (PNDS). New registrations were invited during a “grace period” put in place until March 31, 2020.

The one-off emergency cash transfer of USD 200 was paid directly to household heads over a 30-day period starting in June 2020. Payments were distributed in person at collection sites in each village by staff from the Ministry of Social Solidarity and Inclusion and by village chiefs. Payments were also made to “the door” of people who could not travel to the collection site, such as the elderly and persons with physical disabilities.³ Payments were mostly made to male heads of households, though one review found that household spending decisions were largely made by men and women together and suggested that challenging gender norms related to household spending may not be appropriate in times of crisis.⁴

Cost

The universal COVID-19 relief cash transfer is estimated to have cost USD 60 million. The programme was financed through a wider COVID-19 Fund of USD 250 million established in April 2020 and involved a transfer from Timor-Leste’s Petroleum Fund.⁵

Assessment

The universal transfer has been studied by a range of institutions and found to be broadly successful in mitigating some of the harshest economic impacts of the COVID-19 crisis on people living in or near poverty in Timor-Leste. It is estimated that 95 percent of people received the cash transfer and/or a companion food transfer.⁶ People living outside the capital, where poverty rates are higher, were more likely to receive the transfer, suggesting the policy was progressive. A survey found that 96.9 percent of recipients spent the transfer on food and non-alcoholic drinks, 27.6 percent on clothing and shoes, and 16.9 percent on health and education.⁷ A survey among self-employed and small business owners also found that 78 percent observed an increase in sales following the transfers and 80 percent received better prices for their products.⁸ The universal transfer has also been attributed to a positive change in community relations. Before the transfer, 70 percent of the population thought that COVID-19 had brought their community closer together and this rose to 82 after the transfer.⁹ There were some challenges reaching people experiencing social exclusion, particularly those that do not fit social norms of typical family structures including single mothers, widows, people with disabilities, LGBT persons, survivors of violence and domestic workers.¹⁰

All opinions and views expressed on this website solely represent the views of the authors and of the Pathfinders for Peaceful, Just and Inclusive Societies, a program of the Center on International Cooperation at New York University. The views expressed do not necessarily reflect the views of the United Nations Economic and Social Commission for Western Asia.

Tags

• Asia & Pacific
• Health
• Income & Wealth
• Low-Income Groups
• Middle-Income Country
• Redistribution
• Social Protection
• Timor-Leste
• Universal