The Palestinian National Cash Transfer Program (PNCTP), managed by the Ministry of Social Development (MoSD), is the main national poverty-targeted social assistance programme ameliorating the effects of deep poverty experienced by approximately 115 thousand families in the West Bank and Gaza. The program targets households that fall below the extreme poverty line, identified primarily through a proxy-means test (PMT) formula, which is also used in determining the transfer value received by beneficiary households.

The MoSD and the World Bank have collaborated to update the PMT using the latest available PECS data from 2016/2017. This report aims to reflect on and learn from these latest efforts to revise the PMT formula with the objective of contributing towards the development of the national Social Protection system in the Palestinian territories. To that end, this report assesses the expected impacts of revising the PMT formula on targeting efficiency within the PNCTP and discuss its limitations and potential adverse incentive structure. In addition, this report explores the potential for the use of the national Multidimensional Poverty Index (MPI) in targeting of the PNCTP.