Laos has inadequate social protection, especially for the poor and the Lao economy is vulnerable to external shock, particularly from events like the global financial crisis. It seems that the poor suffered significant effects from the shock. Therefore, it is important to consider creating cash transfer programs for the poor. The main objective of this study is to assess the impact of cash transfers on poverty and income distribution during a crisis. A Computable General Equilibrium (CGE) model- and Micro-simulation are employed for this study. This study focuses on cash transfers to poor households with children, living in rural and urban areas. The simulation result shows that cash transfer has a significant impact on poverty and income distribution. It is noteworthy that poverty reduced more in rural rather than in urban areas. It is therefore important for government to consider establishing social support programs for the poor, in order to reduce poverty and mitigate external shocks such as the recent crisis and rising food prices.