SINGAPORE: Instead of cash, why not give food vouchers to help a lower-income family, so that they are sure to spend it on essentials? Or how about making financial assistance time-limited, with a review every three months, as a check to ensure taxpayers’ money is well spent?

These were suggestions from social service professionals from a research study I participated in many years ago. I recall wondering about the assumptions and attitudes that even professionals carry when interacting with clients in poverty.

After more than 20 years in the sector, I see these views persist - more recently, in reactions to local social service agency AWWA’s family empowerment programme in which some lower-income families received unconditional cash aid of between S$300 and S$550 a month over 18 months.

The poor will become complacent or unmotivated about resolving their financial problems if aid is given with “no strings attached”, goes the recurrent concern. Another is that aid recipients might spend their “free money” badly instead of on basic needs.

If we want to uplift the lower-income, we need to understand why this view is flawed.

POVERTY IS THE PROBLEM, NOT A PROBLEM OF THE POOR

This perspective leans heavily on the notion that poverty stems from personal shortcomings.

If people believe “the poor wouldn’t be poor if they made better choices”, then they probably also think that those in poverty will struggle to make sound financial decisions due to bad decision-making skills and will likely misuse the assistance extended to them.

Poverty is seen as a problem of the poor, rather than as the problem.

But difficulties in decision-making and problem-solving stem primarily from the chronic stress that people in poverty experience daily, according to a growing body of research.

Mdm Zee* always experiences a sense of relief when her husband’s salary is credited at the beginning of the month. This quickly turns to despair: After paying off the household bills she has only about S$800 left for her family of three.

Living pay cheque to pay cheque keeps Mdm Zee in a constant state of hypervigilance, always uncertain whether the next family crisis or unexpected expense will leave them with even less before the next payday. Her constant focus on immediate concerns makes discussions about savings, setting goals or planning seem pointless. There simply isn't enough mental space to feel confident about making future plans, she says.

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Once we stop perceiving it as an innate lack, we can look at improving their decision making and problem-solving abilities.

Then, intervention must target ways to increase cognitive bandwidth and improve mental well-being. AWWA’s study of their family empowerment programme found that mental health improved for participants who received the cash assistance, compared with a control group. 

Crucially, those in the intervention group had better job outcomes, such as landing more secure employment contracts (going from part-time to full-time work for example) or jobs that would provide more stability and longevity. They were not compelled to take just any job.

Unconditional financial aid provided a backstop, a psychological financial floor, which in turn, provided more mental bandwidth.

Still, social service professionals all want to ensure that financial resources - whether from taxpayers or donors - are used to achieve the intended outcome of alleviating economic insecurity. This is entirely appropriate and reflects good governance.

Unfortunately, because of assumptions that people in poverty will misuse resources or lack the knowledge to manage money effectively, programmes often impose strict controls777 runny, monitoring and conditions. And this can be counterproductive.

Assumptions that people in poverty will misuse financial assistance often leads to strict controls, monitoring and conditions being imposed, which can be counterproductive. (Photo: TODAY/Ili Nadhira Mansor)

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