The paper proposes a radical change in the design of the social assistance system (in Latvia and other post-Soviet Republics) based on a guaranteed minimumincome defined within accepted macroeconomic fiscal constraints. The current social assistance system inLatvia is characterized by a multitude of benefits, privileges and institutional care. The paper analyzes the current system and discusses the outcomes of an extended household survey (1998) revealing that the impact of social assistance in Latvia is unfair and ineffective in reaching the poor. Moreover, neither the population nor the administration is fully informed about the current system. The radical simplification of the system is based on the observed shape of the income distribution in the country, on the study of the capacity of the administration, on the experiences in other countries and on macroeconomic and microeconomic efficiency arguments.