Coverage of Social Security Allowances in Areas at Risk of Floods and Droughts

Coverage of Social Security Allowances in areas at risk of floods and droughts

Final Report

Suravi Bhandary, Ludovico Carraro, Madhumitha Hebbar, Pooja Singh and Yugmi Rajyashree Thapa

January 2020

Coverage of social security allowances in areas at risk of floods and droughts

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Coverage of social security allowances in areas at risk of floods and droughts

Acknowledgements

The team acknowledges the contributions of the UNICEF Nepal team, Sevara Hamzaeva, Usha Mishra, Thakur Dhakal and Antonio Franco Garcia, for their valuable feedback on the design and implementation of this study as well as the analysis of the findings.

The team also thanks the DoNIDCR for their support in access both to the MIS data and the use of their premises.

Finally, a special thanks goes to all the people who took part in the survey, both in the different local governments that we visited as well as the households that generously welcomed the survey teams and gave their time in answering our questions.

Executive Summary

Background and research questions

UNICEF Nepal is supporting the Government of Nepal to improve shock responsiveness of the national social protection system and, if the Social Security Allowances (SSA) Programme is to be considered one of the possible channels of response, it is important to strengthen its capacity and preparedness to ensure a timely, inclusive and effective response in case of emergency.

Therefore, the study aims at answering the following questions:

i. What is the coverage of SSA in six districts, where there are risks of flooding or drought?

ii. If there is under coverage among the SSA eligible population, who is more likely of not being reached by SSA even though eligible? What are the main barriers to access?

iii. Again, if there is significant under coverage of the SSA eligible population, are the excluded more or less likely to be poor, food insecure or adopt different coping strategies when faced by a natural calamity?

iv. Are SSA eligible households more or less likely to be affected by national calamities compared to other households by looking at differences in poverty levels, food security and coping strategies?

v. Are there other specific sub-population groups badly affected by natural disasters and not covered by SSA?

The research design is comprised of two core elements:

• A population based random sample survey (5126 households) focusing on understanding coverage rates, perception of barriers of access and vulnerability in six districts (Saptari, Rautahat, Banke, Bardiya, Kalikot and Jajarkot) across 102 wards. The quantitative survey was also followed up by a comparison of people eligible to SSA based on the survey and data retained in the central MIS. • A set of follow up in-depth interviews with SSA eligible members excluded from SSA and key informant interviews to better understand factors behind exclusion in twelve sites, and also a separate investigation on two locations where there is a presence of people from endangered ethnicities.

SSA coverage

The figure below shows in a schematic and theoretical way the main sub-populations categories of interest and their relationships. SSA eligible population is a subset of the whole population and while ideally recipients should coincide with the eligible, because

of implementation failures there is often a subset of eligible who do not receive as well as the possibility of encountering recipients who are not eligible.

Analysing SSA coverage

Before looking at the actual size of these sub-population groups it is important to be aware that across districts there are very different eligibility rules. SSA eligibility is the highest in Kalikot with 80 percent of the population, because all children under five and all people 60 and over are eligible. In Rautahat and Jajarkot eligibility is at around 70 percent as in both districts all children under 5 are eligible to SSA, whereas eligibility falls significantly in the remaining three districts, where only Dalit children and senior Dalit citizens aged 60 to 70 are eligible to SSA. However, since Saptari has a significantly higher percentage of Dalits than other districts, about 45 percent of the population is eligible to SSA, whereas in Banke and Bardiya it stands at approximately 30 percent.

We find two emerging results: inclusion error is negligible (small group C), but exclusion error is significant (large group A of eligible non-recipients); with Rautahat having the highest exclusion error and Kalikot, the lowest.

However, overall SSA exclusion errors hide considerable coverage heterogeneity across the types of SSA. The extent of exclusion in the senior citizen allowance and the single women allowance is relatively low, as these allowances reach 85 percent of their respective eligible population. Instead, the overall exclusion error is largely driven by the child grant and the disability allowance, which cover respectively only 51 percent and 43 percent of the intended population. Moreover, for disability even among blue and red card holders, we find that there is not full coverage since about 87 percent receive the allowance. Coverage among the endangered ethnic groups cannot be assessed through the survey as its overall population is very small in these districts.

In order to further verify the above findings, we conducted a careful exercise of checking the lists of all the eligible member identified in the survey against the beneficiaries in the MIS, and such comparison confirmed the exclusion errors identified by the survey.

Therefore, the study finds that there is an exclusion problem in the SSA programme. The estimated exclusion error is somewhat smaller than what other studies indicated, but still a considerable issue, especially for child and disability allowances.

Why eligible people do not receive SSA?

There is a radical difference that signals two rather different reasons for exclusion: a transitionary issue and a more serious exclusion among those who are not aware of SSA or did not apply. We found that 48 percent of all the eligible non-recipient persons did apply for SSA and that the majority of them are still waiting for the results of their application (39 percent), while some were either rejected or do not know their application status (respectively 6 and 3 percent). The group of people still waiting to hear the result of their application is likely to pose only a transitional problem of delayed entry, since they are likely to become beneficiaries in the near future, and indeed this was confirmed by the comparison with the MIS lists. On the other hand, while most people are aware of SSA, as only 9 percent of the excluded population has never heard of the SSA, 42 percent, who are aware of SSA, have not applied for the SSA1.

The 51 percent of people who have never applied (9+42) should be the subject of further investigation. However, the first aspect to note is that there is considerable variation across the four types of SSA when it comes to eligible non-recipients who did not apply. In fact, application effort is the least among disabled individuals, as nearly 70 percent of the eligible non-recipients in this category have never applied, and then among children, with 52 percent who never applied, followed by senior citizen and single women, with 43 percent and 32 percent, respectively.

In terms of the reasons reported by the respondents for not applying for the SSA, lack of information (not aware of SSA or lack of adequate information) and lack of documents are the main reasons cited for not applying, both of them being mentioned in 45 percent of the cases (multiple responses were possible). Only less than 1 percent reported that they did not apply because of discrimination or stigma, though these problems were better identified as part of the qualitative research.

A very crucial aspect of the analysis consists of determining whether exclusion of the eligible is associated to poverty. This is assessed considering the distribution of the excluded across wealth quintiles and food security categories. However, it is important to analyse the excluded considering separately those who applied and those who never applied. It clearly emerges that while those who applied are not significantly different from the rest of the population, SSA recipients are and, even more, those who never applied are much poorer than the rest of the population. This demonstrates the importance of addressing the lack of coverage of the excluded as this identifies one of the groups that would most need such support.

1 This does not add up exactly to 100 due to rounding.

Vulnerability analysis

In this report and from a social protection perspective, we argue that vulnerability is not defined by the fact of being hit by a shock, but by the effect that such shocks have. More specifically, we draw on a conceptual framework developed by Ibok et al. (2019), initially used to assess food vulnerability. This conceptual framework envisages vulnerability as a composite of exposure to shocks, the accumulative experience of vulnerability and poverty (sensitivity), and the household’s coping ability (adaptive capacity). We do not identify people as vulnerable or not vulnerable, but affected by a different degree of vulnerability, which allows us to group people in vulnerability quintiles.

Looking at eligibility to SSA across vulnerability quintiles, whereby as long as there is one household member eligible to SSA, we consider all household members as eligible. We find that close to 60 percent of those in the most vulnerable group and the second highest vulnerable groups were eligible to SSAs. Such percentage declines for the relatively less vulnerable categories, whereby about 50 percent of people in the 3rd quintile of vulnerability are eligible to SSAs, and about 41 percent of people in the least vulnerable groups were eligible. Therefore, while the correlation is not very strong, it is in the right direction and SSA would still cover 60 percent of the most vulnerable population.

In a scenario whereby these areas are hit by a certain environmental shock, ideally we would like to ensure a full coverage of all those that are most vulnerable, so the next exercise consists of testing and identifying whether there are other potential subpopulation groups currently not eligible to SSA, but that could be included in a response to shocks. This analysis identified two potential groups of interest: Dalits whose household members are aged between 5 and 59, and children under 5 not currently eligible to SSA.

In a scenario of shock response, where support is provided to all SSA eligible people and, through horizontal expansion the two above groups would also be included, almost 83% of the population in the most vulnerable quintile would be covered.

However, the above supposes that SSA reaches all its eligible population. One population sub-group that currently is not reached by SSA is composed of those eligible households not aware of SSA and who have never applied. This group displays a strong correlation with vulnerability, and indeed as shown earlier also with the wealth quintile and food security. Of those who are eligible and did not apply, almost 30 percent is from the most vulnerable quintile. This group is more vulnerable than the current SSA recipients and significantly more vulnerable than the rest of the population.

Recommendations and policy messages

While for senior citizens and single women, coverage of eligible population is quite high, and lack of coverage is transitional, we identified significant concerns for the child grant and disability allowances. These must be addressed not only from an equity perspective, because their entitlements are not achieved, but also because these are among the most poor and vulnerable groups. Therefore, such effort could achieve not only an improvement of the SSA programme, but also potentially support the use of SSA as a mechanism to provide emergency support in case of shocks.

More systematically, in order to achieve the above, this study identified a set of recommendations at policy, programme design and implementation level.

Levels of Recommendations and policy messages influence It is necessary to provide the legal framework to potentially use SSA as one of the instruments of response during shocks. An adjustment to the legal framework that provides the link between SSA and emergency response would Policy level support this possible use and ultimately would lead to strengthening the social protection system in Nepal.

There is a need to institutionalize outreach efforts including the role of ward representatives in the SSA service delivery. Lack of information about SSA is still one of the main drivers for exclusion error and this seems to require a different response in terms of how the programme is designed to reach the eligible population. This calls for stronger and more concerted outreach efforts. Outreach efforts can also be further institutionalized through linkages to services and systems where existing points of service delivery are used to disseminate information on the SSA to targeted beneficiaries.

The ward office, especially the ward secretary is covering all aspects of the Programme policy cycle of service delivery (for example, intake and registration, design level enrolment, payments) and there is a need to strengthen lines of accountability. Horizontal and vertical oversight mechanisms are not fully developed and need to be strengthened by means of: (i) institutionalizing monitoring, evaluation, and learning (MEL) system; and, (ii) improving transparency and accountability measures. Under MEL, effort needs to be made to ensure creation and formulation of the LLMSC as described in the Guideline. Similar social audit mechanisms have been developed and implemented in the health and education sector, and best practices can be adopted from them. Capacity to feed learning from monitoring and evaluation reports back into the planning and implementation of the SSA should also be strengthened.

Levels of Recommendations and policy messages influence Support capacity building of ward offices to streamline processes that would help influence access to SSA especially for those groups who are eligible, but unable to apply because they do not have the relevant documents. Service providers’ understanding of eligibility is limited to availability of supporting documents such as citizenship ID, birth certificates, and disability card. While these issues are not the responsibility or the mandate of one single ministry or department and are often influenced by larger political dynamics, there is a need to address this fundamental problem. One mechanism to achieve this is to build ward-level capacity to understand that documents are means of verification and not what defines eligibility, so ward offices can assist eligible beneficiaries in accessing services. It would be possible and very useful to generate a set of practical instructions on how Programme to overcome some of the problems people experience in getting documents and implementation provide practical advice to people. level- Federal level More targeted efforts on orientation of the SSA for ward offices and local governments would help influence coverage. While key informants specified that MIS training was received from the central level, based on observations made during key informants it appears that ward offices knowledge of the SSA programme was from self-learning. This has had implications on understanding SSA eligibility criteria, especially for those close to the minimum age thresholds, in turn impacting coverage. Further, while there appears to be provisions around MIS training from the centre to the municipality, variations were observed in interview of key informants on subsequent trainings provided from the municipality to the ward- officers. The process and frequency of knowledge transfer on MIS entry from the municipality staff to the ward staff is unclear. This has implications on data entered in the MIS which becomes the basis for receiving SSA.

There is a need to bring about standardisation of application process to keep it less time consuming and resource intensive. There were two broad issues around application standardization: • Eligible beneficiaries had to visit ward offices multiple times for different purposes. For example, in order to apply for the child grant, eligible beneficiaries need to first apply for the birth registration, then re-visit the ward office to register for the SSA. Or, at other times, senior citizens had to re-visit Programme district headquarters to re-issue their Citizenship Identity Cards if information implementation was illegible in the existing one, increasing application costs for them; level- Local • The renewal process was very demanding in some LGs, potentially impacting Government coverage and SSA take-up. level Wards need to adopt a more supportive approach by telling potentially eligible groups what they can fix instead of penalising them for their incomplete applications. Many eligible non-recipients complained that they had to make multiple visits to the ward, municipality, or district offices because they were unclear on the application process and did not bring with them the necessary documentation. It appears that issues around documentation or explanation on why certain applications was incomplete were not clearly communicated to the eligible beneficiaries by the ward offices. Donor and government efforts towards sensitization of service providers would help improve beneficiary experience and their access. Sensitization For amongst service providers on why SSA is targeted to vulnerable population is development needed. Ward offices are aware that the SSA are targeted to certain segments of partners the population, although they don’t understand why. However, key informants were observed to have questioned why the SSA were not targeted to other poorer groups of people. This can create overlapping administrative and psychological barriers impacting beneficiaries’ access to the service providers.

Table of contents

Acknowledgements ...... i Executive Summary ...... ii Table of contents ...... viii List of tables and figures ...... x List of abbreviations ...... xiii 1 Background and research questions ...... 1 1.1 Background ...... 1 1.2 Research questions ...... 2 1.3 Structure of the research design ...... 3 1.4 Structure of this report ...... 4 2 Study areas and functioning of SSA ...... 5 2.1 Brief introduction to the sample...... 5 2.2 Background information on districts part of the study ...... 5 2.3 SSA processes and administration ...... 9 3 SSA coverage ...... 16 3.1 Coverage within the eligible population and the overall population ...... 16 3.2 Survey estimates vs official records ...... 22 3.3 Endangered ethnicity allowance ...... 26 4 Why eligible people do not receive SSA? ...... 28 4.1 Main reasons for failing to receive SSA ...... 29 4.2 Exclusion by wealth and food insecurity ...... 37 4.3 Who are the eligible non-recipients? ...... 38 5 Vulnerability analysis ...... 42 5.1 Exposure to shocks and coping strategies ...... 44 5.2 Sources of borrowing ...... 45 5.3 SSA eligibility vis-à-vis vulnerability ...... 46 6 Recommendations and policy messages ...... 51 Policy level ...... 51 Programme design level ...... 51 Programme implementation level...... 53 References ...... 55 Annex A Measurement of disability ...... 57 Annex B Profile of respondents ...... 60 Annex C Profile of communities ...... 62

Annex D Additional analysis ...... 67 Bank account ownership ...... 67 Reasons for not applying, by SSA type ...... 68 Exposure to shocks and coping strategies by Province ...... 68 Exposure to shocks by wealth quintiles ...... 70 Matching eligible people from survey to MIS central lists by SSA type ...... 71 Annex E Methodological overview ...... 75 Quantitative methodology ...... 75 Qualitative methodology ...... 81 Limitations, biases and mitigation strategies ...... 85 Ethical considerations ...... 86

List of tables and figures

Table 1 Division of the quantitative survey sample by district ...... 5 Table 2 Division of qualitative study sample by district ...... 5 Table 3 Strengths and weaknesses of different payment modalities ...... 12 Table 4 Comparison of aggregate figures from the MIS and survey estimates ...... 23 Table 5 Matching eligible people from survey to MIS central lists ...... 24 Table 6 Indicators used to determine vulnerability ...... 43 Table 7: Screening question for disability ...... 57 Table 8: Domains of disability measured by the survey ...... 57 Table 9: Questions used to measure Disability - Definition 2 ...... 58 Table 10: Functional disabilities among red and blue disability card holders ...... 58 Table 11: Incidence of disability, by definition ...... 59 Table 12: Level of disability ...... 59 Table 13: Overlap between alternative definitions of disability ...... 59 Table 14: Profile of households, by district ...... 60 Table 15: Profile of individuals, by district ...... 60 Table 16 Distribution of surveyed wards, by district ...... 62 Table 17 List of surveyed wards ...... 62 Table 18 Condition of main road serving the community, by district ...... 64 Table 19 Mean distance to urban centres and municipality, by district ...... 65 Table 20 Basic infrastructure at ward level, by district ...... 65 Table 21 If all those receiving SSA in the ward included in the MIS system, by district65 Table 22 Reasons for MIS entry for beneficiaries not being complete, by district ...... 66 Table 23 Matching eligible people from survey to MIS central lists, Senior Citizens allowance ...... 71 Table 24 Matching eligible people from survey to MIS central lists, Single Women Allowance ...... 72 Table 25 Matching eligible people from survey to MIS central lists, Child Allowance... 72 Table 26 Matching eligible people from survey to MIS central lists, Disability Allowance ...... 73 Table 27 Types of tools- quantitative component ...... 75 Table 28 Percentage of population meeting the SSA eligibility criteria ...... 76 Table 29 Selected wards for sample survey ...... 77 Table 30 Sample completion- quantitative study ...... 79 Table 31 Types of tools- qualitative component ...... 81 Table 32 Sample completion for qualitative study ...... 83

Figure 1 Structure of the research design ...... 3 Figure 2: Poverty incidence in Nepal 2011, by district ...... 7 Figure 3: Comparison of the survey sample to the national distribution ...... 8 Figure 4: Comparison to the national wealth distribution, by province ...... 8 Figure 5: Sources of information about the SSA, among eligible recipients ...... 10 Figure 6: Ease of SSA application process, among eligible recipients ...... 11 Figure 7: Mode through which SSA payments are received, among eligible recipients 14 Figure 8: Analysing SSA coverage ...... 17 Figure 9: Analyzing SSA eligibility and coverage, by district (household level) ...... 17 Figure 10: Analyzing SSA eligibility and coverage, by district (individual level) ...... 18 Figure 11 Coverage of SSA among individuals eligible, by type of SSA ...... 19 Figure 12: Coverage of Senior Citizen Allowance, by district ...... 20 Figure 13: Coverage of Single Women Allowance, by district ...... 21 Figure 14 Coverage of Child Allowance, by district ...... 21 Figure 15: Conceptual framework to understand under-coverage ...... 29 Figure 16: Main reasons for failing to receive the SSA, by stage ...... 30 Figure 17: Eligible individuals who never applied, by type of SSA ...... 30 Figure 18: Reasons for not applying, among those not aware or aware but have not applied (51% of excluded) ...... 31 Figure 19: Population distribution by wealth quintiles across different categories ...... 37 Figure 20: Population distribution by food insecurity across different categories ...... 38 Figure 21 Eligible population excluded from the SSA, by locality ...... 39 Figure 22 Eligible population excluded from the SSA, by municipality ...... 39 Figure 23: Exclusion by age, old age allowance ...... 40 Figure 24: Exclusion by age, child grant...... 40 Figure 25: Exclusion by gender, by SSA type ...... 41 Figure 26: Exclusion by ethnicity, by SSA type ...... 41 Figure 27 Eligibility to SSA and Vulnerability ...... 42 Figure 28 Exposure to shocks in the last two years ...... 44 Figure 29 Coping strategies employed by households affected by shocks ...... 45 Figure 30 Sources of borrowing for NPR 6,000 ...... 45 Figure 31 Sources of borrowing for NPR 30,000 ...... 46 Figure 32: Exposure to shocks, by SSA eligibility ...... 46 Figure 33: Eligibility to SSA, by vulnerability ...... 47 Figure 34: Eligibility to SSA, by food insecurity ...... 48

Figure 35: Dalit, children under 5 and people 60-69 in non-eligible households, by vulnerability ...... 49 Figure 36: Population distribution by vulnerability across different categories ...... 50 Figure 37: Eligible individuals with bank accounts, by province ...... 67 Figure 38: Reasons for not having a bank account, by province ...... 67 Figure 39: Reasons for not applying, among those who are not aware or aware but have not applied (51% of excluded), by SSA type ...... 68 Figure 40: Exposure to shocks in the last two years- Province 2 ...... 68 Figure 41: Exposure to shocks in the last two years- Province 5 ...... 69 Figure 42: Exposure to shocks in the last two years- Karnali Province ...... 69 Figure 43: Coping strategies employed by households affected by shocks, by province ...... 70 Figure 44: Exposure to shocks, by wealth ...... 70

Box 1: Who