Legislative Council

LC Paper No. CB(2)1665/98-99
(These minutes have been
seen by the Administration)

Ref : CB2/PL/WS

LegCo Panel on Welfare Services
Minutes of special meeting
held on Wednesday, 24 February 1999 at 8:30 am
in the Chamber of the Legislative Council Building

Members Present:

Hon CHAN Yuen-han (Chairman)
Hon HO Sai-chu, JP (Deputy Chairman)
Hon Cyd HO Sau-lan
Hon LEE Cheuk-yan
Dr Hon YEUNG Sum
Hon LAW Chi-kwong, JP

Members Absent :

Hon David CHU Yu-lin
Hon Eric LI Ka-cheung, JP
Hon LEE Kai-ming, JP
Hon Fred LI Wah-ming
Hon Ronald ARCULLI, JP
Hon YEUNG Yiu-chung
Hon CHOY So-yuk

Public Officers Attending :

Mrs Katherine FOK
Secretary for Health and Welfare

Mr Andrew LEUNG
Director of Social Welfare

Mr HO Wing-him
Deputy Secretary for Health and Welfare 2

Acting Deputy Director of Social Welfare (Administration)

Mr Laurie LO
Principal Assistant Secretary for Health and Welfare (Welfare) 1

Clerk in Attendance :

Ms Doris CHAN
Chief Assistant Secretary (2) 4

Staff in Attendance :

Mrs Eleanor CHOW
Senior Assistant Secretary (2) 4

I. Briefing by the Administration

Secretary for Health and Welfare (SHW) briefed members on the background and outcome of the public consultation on the Review of the Comprehensive Social Security Assistance (CSSA) Scheme, and the Administration's proposed changes to the original package of proposed measures as set out in the Legislative Council (LegCo) Brief. Having considered the views of the public, the Administration made two modifications, namely (i) to drop the proposal to require single parents to seek work when their youngest child reached the age of 12; and (ii) to continue to pay special grants for burial expenses to able-bodied recipients. The original and revised proposals were summarised at Annex C to the LegCo Brief. SHW reiterated that the CSSA scheme would continue to provide a safety net for those with genuine financial need. The elderly, the disabled and the chronically ill were unaffected by the new measures. The proposed package only tackled the immediate problem of able-bodied CSSA recipients with a view to encouraging and helping them to seek work to become self-reliant, and ridding the system of possible disincentives to work. The Administration expected that CSSA expenditures would reach $13 billion in 1998/99 and would continue to grow in 1999/2000 to $15.5 billion.

II. Members' comments

2. Dr YEUNG Sum said that he welcomed the two modifications made by the Administration but was disappointed that special grants such as those for spectacles and denture were to be slashed. He pointed out that these items were granted on a reimbursement basis and there was no possibility of abuse. He asked for the reasons for removing these grants and the savings achieved as a result.

3. SHW replied that a flat-rate grant was payable to full-time students up to the upper secondary level for selected items of school related expenses such as books and stationery. The grant was normally paid prior to the start of the school year in the range of $1,300 to $4,100 depending on the level of class in school that the students were attending. The students could also use the grant to pay for spectacles. It was difficult to estimate the savings of a specific item since the amount of savings that could be achieved depended on the growth rate of applications. She said that the new measures would avoid CSSA expenditure of about $550 million if the caseloads were to remain at the current level. The potential savings would rise to $600 million to $700 million depending on the growth rate in caseload.

4. Mr LAW Chi-kwong made the following comments -

  1. He disagreed with the Administration's assertion that the elderly and disabled would not be affected by the proposed package. He pointed out that elderly and disabled persons living with a large family comprising four members or more would feel the clinch because the standard rate for the household would be slashed by 20% or more;

  2. As regards the proposal to include owner-occupied residential properties for asset test, he pointed out that single parent families would fall back to the CSSA scheme once they depleted their savings realised from the sale of properties. It might cost the Government more in the long run when they applied for housing assistance or for a rent allowance under CSSA to meet the cost of accommodation. He questioned the justification for applying such a measure to single parent families with owner-occupied properties;

  3. Since there were insufficient vacancies in the job market and reduction of wages, the requirements of regular employment (which was defined as earning no less than $3,200 and working no less than 120 hours per month) in relation to disregarded earnings should be relaxed so as to encourage unemployed CSSA recipients to take up part-time jobs; and

  4. On alimony, the Attachment of Income Order Rules which introduced legal remedies to enforce maintenance orders had been in operation for almost a year. Given that many maintenance payees did not receive payments on a regular basis, the Administration was urged to review the current practice of counting alimony as income of single parents and to consider establishing a maintenance board to assist single parents with difficulties in collecting alimony payment.

5. Director of Social Welfare (DSW) replied with the following comments -

  1. The amount of CSSA for the elderly and the disabled would remain the same although the payment to their families might be reduced;

  2. He noted the difficulties of single parent families with owner-occupied properties but it was a matter of principle that asset should include property. The existing arrangement which totally disregarded property for the asset test created an anomaly in that a family possessing a self-occupied property of substantial market value might be eligible for CSSA while another family possessing other capital assets of a much smaller value might be denied assistance. Since CSSA was meant for the needy, it was not unreasonable to expect a person or a family to run down their assets, including self-occupied property, to a modest level before turning to welfare assistance. The asset test would only apply to employable adults aged below 50 and where there were no family members who were old, disabled or medically certified to be in ill-health. A grace period of 12 months would be allowed for the applicants to make alternative arrangements;

  3. On the suggestion to relax the eligibility for disregarded earnings, there was the possibility of further broadening the CSSA net, given that the CSSA payments for larger families were higher than the market wages for low-end jobs. It might also encourage recipients to look for a relatively comfortable or convenient low-paid job, benefit from the disregarded earnings and stay on CSSA. To give unemployed recipients a greater incentive to seek work, the first month's income from a newly secured full-time job would be totally disregarded under the new measure; and

  4. The Administration would consider the suggestion of reviewing the practice of counting alimony payments. He noted that single parents were in need of a steady source of income, but payment of alimony was not a simple issue that could be resolved easily. He appealed for members' forbearance and assured that CSSA would serve as a safety net during the interim period.

6. Mr LEE Cheuk-yan said that the Administration could not deny the fact that CSSA adjustments were based on wage movements, given the conclusion that CSSA payments for large families were higher than the market wages for low-end jobs. Mr YEUNG Sum supported the view. Mr LEE further criticised the proposals of having the effect of dragging down wages in the labour market and forcing people to accept low wages. He supported Mr LAW Chi-kwong's proposal that the requirements of disregarded earnings should be relaxed. He pointed out that under the present arrangement, a person taking a low paid part-time job would be worse off than an unemployed CSSA recipient because he had to incur additional expenses such as commuting costs.

7. In reply, SHW said that the Administration had not departed from the basic needs approach and would continue to provide a safety net for the financially vulnerable. She said that CSSA standard rates were set for different categories of recipients based on actual expenditure patterns of the lower income sectors of the population. Although references were made to wages of low-end jobs, they were not used to calculate the standard rates. The proposed downward adjustment of standard rates for able-bodied adults/children in households with three or more such members was to take into account of economies of scale in large households and to ensure that the level of CSSA payments would not create disincentives to work. She disagreed with Mr LEE Cheuk-yan that the proposed measures would drag down the general wage level. She noted the difficulties in finding full time jobs in the present economic climate and said that the Administration would implement an "Active Employment Assistance" (AEA) programme to encourage and help unemployed CSSA recipients to move towards self-reliance. The Administration would review the requirements for disregarded earnings taking into account the conditions of the job market. She said that many recipients had expressed keen interest to rejoin the working force, irrespective of the modest pay and whether the job was full-time or part-time. They recognised that being engaged in work would help them move to jobs with higher pay in future and leave the CSSA net eventually. Adm

8. The Chairman asked SHW for a time-table to review the requirements of disregarded earnings. SHW said that she needed more time to consider the issue and could not commit a date at this point in time. Dr YEUNG Sum proposed to move a motion as follows -

    "That, in view of the present situation where the unemployment rate is on the rise and the level of wages is experiencing downward adjustment, the Legislative Council Panel on Welfare Services urges the Government to re-assess the definition of 'regular employment' which is currently defined as 'earning no less than $3,200 and working no less than 120 hours per month', with a view to effecting downward adjustment of the requirements by May 1999."

9. Members unanimously supported the motion. The Chairman instructed the Clerk to follow up the matter with the Health and Welfare Bureau. Clerk

10. Miss Cyd HO criticised the Government for being mean to have made only two concessions on compassionate grounds. She urged the Administration to adopt a poverty line and not to force the recipients to join the job market unless there was adequate assistance provided. On single parents, she said that adequate child care and after school care services should be provided before requiring single parents to seek work. She suggested the Administration to make reference to the research report prepared by the Research and Library Services Division of the LegCo on "Child Support Agencies in Overseas Countries" which gave an account of the operation and effectiveness of overseas intermediary bodies responsible for the collection and enforcement of maintenance payment. She also expressed concern about the effectiveness of the AEA programme and asked when it would come into operation.

11. In reply, SHW said that the Social Welfare Department (SWD) would continue to provide child care services and after school care services to single parents. In addition, the Employees Retraining Board (ERB) and the Education Department had separately organised retraining courses and adult education programmes. With the change in demographics, she noted that there was rising demand for child care services in new towns. She assured members that the Administration would make corresponding changes. As regards the enforcement of alimony payment, the Home Affairs Bureau was reviewing the matter. The AEA programme which involved the co-ordinated work of the SWD, the ERB and the Labour Department (LD) would be implemented in June 1999.

12. DSW supplemented that participants in the AEA programme would be briefed on the work incentive arrangements, the various ways and channels to seek jobs, employment and retraining and other support services provided by the SWD, LD, ERB and NGOs. Job search would be further supported by provision of job vacancy information through a computerised system at social security field units (SSFUs). Staff of SSFUs would also help participants to develop an individual action plan to find work and would arrange regular follow-up interviews to monitor the progress of their job search and where necessary, provide appropriate assistance to help them modify and achieve their plan. All CSSA recipients were given priority access to ERB's training courses. In response to members, SHW undertook to brief the Panel at a future meeting on the detailed working plan of the AEA programme, and the co-ordination and division of labour of the relevant departments concerned. Adm

13. The meeting ended at 9:50 am.

Legislative Council Secretariat
7 April 1999