Social protection can be used as an effective policy instrument to achieve zero poverty. A considerable percentage of households in Sri Lanka are still suffering from poverty, reflecting the fact that the existing social protection system does not correctly address the heterogeneity of poverty. This study examines the outreach and impact of social protection on poverty in the context of the spatial heterogeneity of poverty. The reasons and nature of poverty are different according to the different poverty levels and spatial disparities. However, the existing social protection system does not accurately target these disparities. The outreach and impact of social protection are low since the current system does not adjust according to the inflation rate and spatial poverty lines. Hence, it is essential to reformulate the existing social protection system considering the spatial factors and different poverty categories while implementing a rigorous method to select the beneficiaries and benefits of social protection by considering inflation and district-level poverty lines.