In 2002, UNDP launched an initiative in partnership with Bulgaria's Ministry of Labour and Social Policy, and assisted the Government with social service reform. UNDP support to the development of a new social service system included developing capacities of community-based service providers, helping to mitigate some of the negative effects of those most affected by unemployment.

UNDP supported the Government to develop secondary legislation for the newly adopted Social Assistance Act, assisting with the design of a new system of community-based social services that would meet national minimum quality standards. The project also piloted a cost-sharing model for financing community-based social services between the central government (70 percent), municipalities (20 percent) and beneficiaries (10 percent). The project helped to develop the capacities of municipalities to co-finance, outsource and supervise community-based social services.