In this paper we estimate the redistributive impact of extending at national level the Reddito Minimo di Inserimento, a minimum income programme introduced experimentally in 1999 in some Italian municipalities. Furthermore, we analyse the poverty targeting of the benefit under the eligibility criteria provided by the current scheme and by the new means-testing indicator Indicatore della Situazione Economica (ISE). For this purpose we develop a microsimulation model reproducing the current Italian tax-benefit system. The simulation results show that the impact of the benefit is relevant in terms of both inequality and poverty reduction (poverty rate, poverty gap). However, in spite of high efficiency of the expenditure in fighting poverty, the ISE means-testing criterion shows better capacity in selecting poor households.