Digital Welfare Delivery and Exclusion: Patterns of Access, Trust and Administrative Burden among Low-Income Households

Abstract

Digitalisation of welfare delivery has increased the use of bank accounts, mobile payments and electronic transfer systems in social protection. However, low income households can still face exclusion due to lack of digital access and poor institutional trust and administrative complexity. This research explores trends in access to digital welfare, financial inclusion, and trust exclusion and administrative burden among economically disadvantaged groups. It includes a quantitative and comparative research design to measure the change in account ownership, participation in digital payments, receipt of government transfers, and barriers to financial access, particularly for the poorest 40 per cent of the population. Descriptive statistics, income-group comparisons, correlation analysis and regression techniques are used to detect major patterns and relationships. The results indicate that the use of accounts and digital payments on smartphones and in the internet have grown over time, albeit at low levels relative to their ability to use the same service. Overall poor groups lag behind rich groups, particularly in terms of digital transactions and online account access. The top three barriers cited were cost, documentation issues, and distance from financial institutions and lack of trust. There was a general tendency for increased administrative burden to be correlated with decreased financial access, but this correlation was not strong. The study establishes that digital welfare systems can enhance the effectiveness of social protection, but includes will be contingent on cost effective services, streamlined procedure, trustworthy grievance mechanisms, assisted entry and the availability of alternative providers in the offline world.