Current Status

Surpassed (interim) — The share of financial aid directed toward empowerment (rather than direct welfare transfers) reached 33.7 per cent in 2024, surpassing interim milestones on the path to the 38.3 per cent target. This represents a fundamental reorientation of Saudi Arabia’s social protection system from passive welfare to active empowerment.

Key Metrics

Trend Analysis

The transformation of Saudi Arabia’s social protection system from 1 per cent empowerment-focused to 33.7 per cent represents perhaps the most radical welfare reform in the Kingdom’s history. In 2016, the overwhelming majority of social financial aid consisted of unconditional cash transfers — stipends, grants, and subsidies provided without requirements for skill development, job seeking, or self-sufficiency improvement. The Vision 2030 target of 38.3 per cent empowerment-focused aid signalled a paradigm shift toward a system that supports citizens not merely with income maintenance but with the tools and pathways to achieve economic independence.

The shift has been implemented through multiple programmatic innovations. The Hafiz programme was transformed from a relatively passive unemployment benefit into an active labour market programme requiring recipients to engage in job search activities, attend training, and accept suitable employment offers. Non-compliance results in benefit reduction or suspension, creating strong incentives for workforce entry. The Tamheer programme provides on-the-job training placements for university graduates, with stipends funded by the Human Resources Development Fund, bridging the education-to-employment gap. The Doroob digital training platform offers thousands of online courses in employable skills. The Kafalah SME loan guarantee programme empowers entrepreneurs to start businesses rather than rely on government support.

The Citizen’s Account programme, introduced in 2017, consolidated multiple subsidy streams into a single, means-tested cash transfer system. While the programme itself is a transfer mechanism, its means-testing approach ensures that benefits flow to those most in need, freeing fiscal space for empowerment-focused spending. The programme serves over 13 million beneficiaries and has demonstrated the government’s capacity to deliver targeted social protection at scale. The combination of tightened welfare conditionality, expanded training opportunities, and improved labour market linkages has created a virtuous cycle: as more citizens transition from welfare to employment, fiscal resources are freed for further empowerment investment.

Methodology

The empowerment share of financial aid is calculated by the Ministry of Human Resources and Social Development. Financial aid is categorised into two types: direct welfare transfers (unconditional cash payments, subsidies, and grants) and empowerment-focused aid (training subsidies, employment incentives, entrepreneurship support, educational grants linked to employment outcomes, and rehabilitation services). The empowerment share is calculated as empowerment-focused aid divided by total government social financial aid spending. The methodology follows a classification framework developed in consultation with the World Bank and aligns with the OECD’s Active Labour Market Policies taxonomy. Data is compiled from the budgets and expenditure reports of all government agencies involved in social protection delivery.

Related Priorities

The empowerment orientation of social aid directly supports multiple Vision 2030 labour market and social objectives. It enables Unemployment Rate reduction by actively preparing and incentivising welfare recipients for employment. It supports the Saudis in Private Sector target by channelling citizens toward private-sector opportunities. The Home Ownership Rate benefits as empowered, employed citizens become eligible for mortgages. The World Happiness Index is supported as economic self-sufficiency improves life satisfaction more sustainably than passive transfers. The fiscal sustainability agenda also benefits, as employment reduces long-term welfare expenditure.

Outlook

Closing the remaining 4.6 percentage point gap to reach 38.3 per cent by 2030 is well within the established trajectory, requiring annual improvement of approximately 0.8 points — below the historical pace of approximately 4 points per year. The deceleration is expected as the easiest welfare-to-empowerment conversions have already been achieved, and the remaining direct welfare recipients include populations with more complex barriers to employment (elderly, disabled, single parents with care responsibilities).

The Vanderbilt Portfolio projects the empowerment share reaching 36 to 42 per cent by 2030, with the target of 38.3 per cent very likely to be achieved. The broader significance extends beyond the numerical target: Saudi Arabia’s welfare reform demonstrates a governance model that other resource-rich countries may seek to emulate. The shift from unconditional transfers to empowerment-focused support represents a fundamental change in the social contract between the Saudi state and its citizens — one that values productive participation over passive receipt and positions the population for long-term economic self-sufficiency.