For discussion FCR(96-97)92
on 17 January 1997

ITEM FOR FINANCE COMMITTEE

HEAD 170 - SOCIAL WELFARE DEPARTMENT
Subhead 180 Social security allowance scheme

Members are invited to approve supplementary provision of $313.6 million under Subhead 180 Social security allowance scheme.

PROBLEM

The approved provision for the social security allowance (SSA) scheme is inadequate to meet increased expenditure in 1996-97.

PROPOSAL

2. The Director of Social Welfare (DSW) proposes supplementary provision of $313.6 million under Subhead 180 Social security allowance 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 SSA scheme will exceed the approved provision by $313.6 million, calculated as follows -




$ million






(a)

Expenditure from 1 April to
30 November 1996

2,683.85






(b)

Estimated expenditure from
1 December 1996 to
31 March 1997

1,375.88

_______






(c)

Estimated total expenditure
for 1996-97 [(a)+(b)]

4,059.73





Less

(d)

Approved provision

3,746.13

_______






(e)

Estimated shortfall [(c)-(d)]

313.60

_______

4. The supplementary provision required is mainly due to -

  1. an across-the-board increase of 7% in the rates of standard payments with effect from 1 April 1996 to take account of inflation; and
  2. a slightly higher than estimated number of recipients (about 2%) of old age allowance in 1996-97.

FINANCIAL IMPLICATIONS

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

BACKGROUND INFORMATION

6. The SSA 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 SSA scheme to take account of inflation, and accepted the financial implications of $262.2 million a year for SSA. 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 later in the year.

Health and Welfare Branch
January 1997

Enclosure to FCR(96-97)92

Social Security System - -- Social Security Allowance Scheme

Introduction

The aim of the social security allowance (SSA) scheme is to help the severely disabled and the elderly to meet the special needs which arise from disability and old age.

Eligibility

2. The scheme is non-contributory. Applicants for SSA are not subject to a means test but persons aged between 65 and 69 claiming the Old Age Allowance have to declare that their income and assets do not exceed the prescribed levels. Besides, there is a residence requirement.

The Scheme

3. Four allowances are payable under this scheme as follows -

  1. Normal Disability Allowance

    For severely disabled persons who, broadly speaking, suffer from a 100% loss of earning capacity, or who are profoundly deaf.

  2. Higher Disability Allowance

    For severely disabled persons who require constant attendance from others in their daily life but are not receiving such care in a government or subvented institution or a medical institution under the Hospital Authority.

  3. Normal Old Age Allowance

    For persons aged between 65 and 69 whose income and assets do not exceed the prescribed levels.

  4. Higher Old Age Allowance

    For persons aged 70 or over.

Last Updated on 5 August 1999