Public work is currently the major national tool for the reintegration of the long-term unemployed into the world of labour in Hungary. As a result of the expansion of resources the government allotted to facilitate public work employment, labour statistics improved substantially. Nonetheless, public labour as an institution is objected to intense criticism. Since employment as public worker is not bound to citizenship rights, local municipalities have a large degree of discretion about selecting whom they hire. Criticism most often focuses on employment discrimination. In contrast, this research takes a progressive municipality, with anti-discriminatory profile as an example, where public work was adapted as a welfare, rather than purely workfare praxis. Uszka, a rural small-sized municipality, is characterized by high ethnified unemployment. Its politicians and administrators adapted varied strategies to help combat poverty and unemployment. The paper explores the place of public work in the context of social policy instruments and poverty reduction strategies applied and the degrees of freedom and limitations municipalities have in adapting state instruments.