2. The Director of Social Welfare (DSW) proposes supplementary provision of $l,390 million under Subhead 179 Comprehensive social security assistance scheme.

JUSTIFICATION

3. On the basis of the actual expenditure for the eight months from April to November 1996, DSW estimates that expenditure for the whole financial year on the CSSA scheme will exceed the approved provision by $1,390 million, calculated as follows -

			$ million

	(a)	Expenditure from 1 April to 30 November 1996	4,578.7

	(b)	Estimated expenditure from 1 December 1996 to 31 March 1997	2,721.3 ______

	(c)	Estimated total expenditure for 1996-97 [(a)+(b)]	7,300.0

Less	(d)	Approved provision	5,910.0 ______

	(e)	Estimated shortfall [(c)-(d)]	1,390.0 ______

4. The supplementary provision required is due to -

an across-the-board increase of 7% in the rates of standard payments with effect from 1 April 1996 to take account of inflation;
increases in non-standard payments arising from general price increases and an increase in the number of payments;
an increase in average payment per case resulting from the implementation of the improvements arising from the CSSA Review approved by Members on 12 April 1996 vide FCR(96-97)3 and from a substantial increase in the number of cases involving bigger households with more family members recently; and
a greater than anticipated increase in the number of CSSA recipients. In estimating the provision required for 1996-97 (including the provision reserved under Head 106 Miscellaneous Services Subhead 251 Additional commitments for meeting the additional costs of the improvements to the CSSA Scheme), we assumed that the average caseload would increase 500 paid cases per month at an annualised growth rate of 12% to 13%. But the actual number of paid cases has already increased by 21% 1996, from 121 600 as at March 1996 to 147 600 as at November 1996.

FINANCIAL IMPLICATIONS

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

BACKGROUND INFORMATION

6. The CSSA scheme is a major feature of the social security system. An explanatory note is at the Enclosure.

7. On 9 February l996, Members approved an across-the-board increase of 7% in the rates of standard payments under the CSSA scheme to take account of inflation, and accepted the financial implications of $331 million a year for CSSA. Members noted that these financial implications were estimated on the basis of the caseload prevailing at that time. We informed Members that we would seek supplementary provision, including any additional requirements for non-standard payments, later in the year.

8. On 12 April l996, Members also approved a package of improvements to the CSSA scheme with effect from 1 April l996, and accepted the financial implications of $475 million a year. We informed Members that we would seek the total supplementary provision required under Subhead 179 towards the end of the 1996-97 financial year.

Health and Welfare Branch
January 1997

Enclosure to FCR(96-97)91

Social Security System --- Comprehensive Social Security Assistance Scheme

Introduction

The social security system provides a safety net for individuals or families suffering financial hardship for various reasons, such as old age, disability, illness, unemployment, low earnings, etc. The aim of the comprehensive social security assistance (CSSA) scheme is to bring the income of such individuals or families up to a prescribed level where basic and special needs can be met.

Eligibility

2. The scheme is non-contributory and means-tested. There is a residence requirement for the scheme. In addition, applicants for CSSA aged between 15 and 59, if unemployed and in normal health, are expected to seek work actively by registering for employment assistance with the Labour Department.

The Scheme

3. The amount of assistance is determined by the resources and needs of the applicant. The difference between the applicants assessable income and his total needs as determined by reference to certain prescribed levels, will be the amount of assistance provided.

4. The scheme embraces different standard payments to meet the basic needs of broad categories of recipients. In addition, an annual long-term supplement is paid to those who have been receiving assistance continuously for more than 12 months for the replacement of household and durable goods. A monthly supplement is also paid to single parents in recognition of the special difficulties they face in bringing up families on their own without the support of spouses. Apart from these standard payments, a wide range of non-standard payments in the form of special grants are payable to meet the specific needs of an individual or a family. They include payments to cover such expenses as rent, school fees and other educational expenses, medically recommended diets, spectacles and dentures.

Supplementary Note to FCR(96-97)91

HEAD 170 - SOCIAL WELFARE DEPARTMENT

Subhead 179 Comprehensive social security assistance scheme

Introduction

At the Legislative Council Welfare Panel meeting on 10 January 1997, representatives of Health and Welfare Branch and Social Welfare Department informed Members that the approved provision for the comprehensive social security assistance (CSSA) scheme of $5,910 million under Head 170 Subhead 179 is inadequate to meet increased expenditure in 1996-97. Members suggested that the Finance Committee be provided with a breakdown of the supplementary provision of $1,390 million being sought.

Details

2. A breakdown of the amount of $1,390 million is given below -

In relation to the approved provision of $5,910 million, inflation adjustment of $414 million attributable to an across-the-board increase of 7% in the standard rates with effect from 1 April 1996 and increases in the non-standard payments arising from general price increases;
$307 million for an increase in average payment per case arising from an increase in the number of non-standard payments and an increase in the number of cases involving bigger households with more family members;
$159 million in addition to the approved provision for the implementation of the improvements arising from the CSSA review approved by Members on 12 April 1996 vide FCR(96-97)3; and
$510 million for a greater than anticipated increase in the number of CSSA recipients.

Health and Welfare Branch
16 January 1997

Last Updated on 5 August 1999