For discussion FCR(95-96)124
on 9 February 1996

ITEM FOR FINANCE COMMITTEE

HEAD 173 - STUDENT FINANCIAL ASSISTANCE AGENCY
Subhead 156 Kindergartens - fee assistance

Members are invited to approve supplementary provision of $38.3 million for payment of kindergarten fee assistance.

---

PROBLEM
PROPOSAL
JUSTIFICATION
FINANCIAL IMPLICATIONS
BACKGROUND INFORMATION

---

PROBLEM

The approved provision for kindergarten fee assistance is insufficient to meet increased expenditure in 1995-96.

PROPOSAL

2. The Controller, Student Financial Assistance Agency (C, SFAA) proposes supplementary provision of $38.3 million under Head 173 Subhead 156.

JUSTIFICATION

3. On the basis of the actual expenditure for the nine months from April to December 1995, C, SFAA estimates that the expenditure for the whole financial year on kindergarten fee assistance will exceed the approved provision by $38.3 million, calculated as follows -

4. The approved provision of $135,966,000 under Head 173 Subhead 156 is insufficient to meet the requirements for 1995-96, mainly due to the following reasons -

1. an increase in the weighted average fees of non-profit-making kindergartens from $632 to $708 per pupil per month for half day sessions and from $1,384 to $1,448 per pupil per month for whole day sessions with effect from September 1995; and
2. an increase in the estimated number of successful applicants. Based on the actual number of applications received so far in the current financial year, C, SFAA estimates that the number of successful applications (in terms of full-remission equivalents) for 1995-96 will be 25 252 which is 54.2% more than the 16 380 estimated in the 1995-96 Estimates. This is largely due to increased publicity of the scheme resulting in greater awareness among kindergartens and parents of the fee assistance.

FINANCIAL IMPLICATIONS

5. If Members approve the proposal, we shall offset the supplementary provision of $38.3 million by deleting an equivalent amount under Head 106 Miscellaneous Services Subhead 251 Additional commitments.

BACKGROUND INFORMATION

6. Members approved the Kindergarten Fee Remission Scheme on 29 June 1990. Under the Scheme, fee remission is provided to eligible pupils in kindergartens registered with the Education Department. Eligibility for fee remission is assessed on a points system which takes into account the applicant’s household income and the number of dependants in the family. The level of fee remission is either in full or half of the actual fee charged or the weighted average fee of all non-profit-making kindergartens, whichever is the smaller.

Education and Manpower Branch
January 1996

---