This note considers unemployment assistance (UA) as an alternative to UI. By targeting the benefits to those with the lowest incomes, UA provides the potential for savings. At the same time, UA obviously imposes more demanding administrative procedures and thus imposes other costs. Moreover, by paying benefits only to families which pass a means test, the program may introduce additional labor-market disincentives. We look into these issues in more detail below.1 We describe the two systems, analyze their generosity, targeting and efficiency and consider the applicability of UA to developing and transition countries.