New analysis shows that reforming cash benefits can significantly reduce child poverty and improve labour market outcomes

Skopje, 6 May 2026: The Ministry of Social Policy, Demographics and Youth and UNICEF today held a high level policy discussion titled “Investing in Children – Advancing Human Capital, Women’s Employment and Inclusive Growth”, presenting new evidence showing that reforming cash benefits for families with children could reduce child poverty in North Macedonia by up to 6 percentage points.

The event brought together senior government officials, parliamentarians, academia, civil society and international partners to examine policy options that not only tackle poverty, but also strengthen demographic resilience, support women’s employment and promote long term economic growth.

Despite social protection reforms, nearly three in ten children in North Macedonia – around 120,000 children – remain at risk of poverty, a rate significantly higher than the national average. Poverty risks are especially high among children growing up in large families, single‑parent households and Roma communities, where nearly one in two children lives below the poverty threshold.

“Today, we are at a stage where the next, bolder step is needed. The key message is clear: a new generation of child benefit reforms is required - with broader coverage, more adequate support, a stronger child focus, and better alignment between social protection and the labour market. That is why we see today’s analysis as the foundation for substantial reform. One of the models being considered is the introduction of a universal child benefit, with proven effects on reducing poverty and improving labour market outcomes. At the same time, the expansion of the coverage and adequacy of existing child benefits is also being explored. Our goal is clear: to establish a more inclusive and effective child benefit system, centred on the best interests of the child, while also creating incentives - not barriers - for formal employment,” said Fatmir Limani, Minister of Social Policy, Demographics and Youth.

Participants highlighted that child poverty is not just about limited income; it also affects children's nutrition, healthcare, education, and overall development. These challenges can result in lower educational attainment and poorer economic prospects later in life, creating a cycle of poverty across generations.  High rates of poverty can also weaken demographic resilience, as families may postpone or avoid having children, women may be driven out of the workforce, and young people might migrate elsewhere for better opportunities. 

“Demographic resilience is about creating the conditions in which families can raise children with security, dignity and confidence in the future. Strong and predictable child benefits are a core part of the solution, helping families cope with economic pressures, prevent poverty and protect investments in children’s growth and development – the foundations of the country’s future workforce and long‑term human capital,” said Lesley Miller, UNICEF Representative in North Macedonia

The analysis presented provided two evidence-based reform options: (1) a Universal Child Benefit, offering base income support for all children plus extra top up for those in poverty, education, or larger families; and (2) a strengthened means-tested approach, increasing benefits, expanding eligibility, and lifting caps on the maximum number of children supported in a household. Both options show potential to reduce child poverty by up to 6 percentage points, within reasonable fiscal implications. 

Panel discussions explored how improved child benefit design can ensure a fair start for every child, while also supporting women’s activation in the labour market. Speakers emphasised that predictable and stable income support is particularly important during early childhood and key life transitions, and that social protection should support – not penalize – entry into formal employment. Participants agreed that financing arrangements for the reform must not divert resources away from essential child focused services that complement cash benefits.

The closing remarks at the end of the event were delivered by the State Secretary of the Ministry, Fatmir Sabriu.

“For the Ministry of Social Policy, Demography and Youth, today’s discussion is extremely valuable. It provides us with a clear picture of the key challenges, but also of the opportunities ahead of us. In the period ahead, we will continue with a careful analysis of the proposed options, with the aim of identifying solutions that are:

• truly effective in reducing poverty,
• equitable with regard to different categories of families,
• and, of course, fiscally sustainable.”

Concluding the event, participants agreed that regardless of the reform pathway chosen, child benefits must be adequate, fair and linked to wages or the poverty line, while remaining closely integrated with investments in child-focused services such as education, health and early childhood services. 

For more information, please contact:

Suzie Pappas Capovska| Tel: (02) 3231-244 | [email protected]

Simona Mirkoska | Tel: (02) 3231-253 | [email protected]