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The primary objective of the majority of social assistance schemes is to reduce poverty, and targeting is often considered an important tool to reach this objective more efficiently and effectively. This paper investigates the efficiency and effectiveness of a targeted benefit scheme that uses a hybrid form of targeting and is subject to a tight budget constraint, namely the social assistance scheme in Kosovo. In recognition of the long-term detrimental and negative consequences of child poverty, we focus particularly on the scheme's impact on children. A mixed method approach is used to investigate both the economic and non-economic costs and implications. Findings suggest that the social assistance scheme is highly efficient but excludes many poor children. Poverty impacts are limited and the scheme does not resonate well with its recipients. Policy simulations indicate that incremental budget increases have the potential to greatly reduce child poverty when implemented hand-in-hand with amendments to the current social assistance scheme. © The Author(s), 2011.