For discussion
FCR(97-98)85
on 9 January 1998

ITEM FOR FINANCE COMMITTEE

HEAD 170 - SOCIAL WELFARE DEPARTMENT
Subhead 787 Grant to the Emergency Relief Fund (block vote)

Members are invited -

  1. to approve changes to the existing basis for revising the Re-accommodation Grant, Repair Grant and Grant for victims who suffer damage or extensive loss to their home appliances, furniture and other personal belongings due to natural disasters under the Emergency Relief Fund with immediate effect as set out in paragraphs 6 to 10 below; and

  2. to delegate to the Secretary for the Treasury the authority to approve future revisions to the rates of the grants in (a) above in accordance with the new basis.

PROBLEM

The existing basis for revising the rates of certain grants under Section B of the Emergency Relief Fund (ERF) payment schedule is no longer practicable.

PROPOSAL

2. We propose that -

  1. the existing basis for revising the rates of the grants be changed with immediate effect as set out in paragraphs 6 to 10 below; and

  2. the authority to revise the rates of the grants in future in accordance with the new basis be delegated to the Secretary for the Treasury.

JUSTIFICATION

3. The ERF provides financial assistance to persons who are in need of relief as a result of fire, flooding, tempest, typhoon or other natural disasters regardless of their financial means. The Director of Social Welfare Incorporated, as trustee, is responsible for the administration of the ERF. He acts on the advice of the ERF Committee. There are several broad types of grants under ERF. These cover death/personal injury, domestic re-accommodation/re-equipment/repair/site formation, replacement/repair of vessels and fishing gears, and loss of stock/houses/crops/home appliances/furniture/other personal belongings, etc. The rates of payments are normally adjusted on an annual basis.

4. Section B of the ERF covers payments to people whose dwellings are affected by natural disasters. On 30 August 1979, the Finance Committee endorsed the pegging of the rates of certain grants under this section of the ERF to the ex-gratia domestic removal allowance (DRA) payable to persons affected by Government's clearance operations. The objective was to rationalise and equate payments made under the ERF and DRA schedules to people whose homes are similarly affected, whether by clearance or as a result of natural disasters. Rates of the grants pegged to DRA are revised annually in line with revisions to the DRA.

5. Hitherto, there are four sets of DRA rates payable to clearees depending on the types of public housing they were moving into, namely, permanent rental housing and the three types of temporary housing areas (THA) - single storey, cockloft type and full-built. With regard to the rates applicable to THA, the Finance Committee approved on 19 July 1996, vide FCR(96-97)51, that there should henceforth be one single set of DRA rates applicable to those moving into full-built structures. This is because all single storey and cockloft type THAs are under clearance and will have no further intake. Accordingly, two grants under Section B of the ERF applicable to single storey and cockloft type of THA will cease to apply.

6. There are, however, a number of other grants the rates of which are pegged directly or indirectly to the two obsolete DRA rates for THA. These involve four grants in Section B and one grant under Section C. We have reviewed the existing basis for revising the rates of the affected items and concluded that the best alternative would be to sever the link between the rates of payments under these grants and the DRA and adopt instead the Consumer Price Index (A) (CPI(A)) as the basis for future revisions. Our considerations are as follows -

  1. the grants under Section B of the ERF payment schedule are given to the victims to assist them to meet general expenses related to domestic removal, replacement of household items or domestic re-construction. It will be appropriate to adopt a basis which can best preserve the real value of the assistance and the CPI(A) is considerd the most appropriate indicator for this purpose; and

  2. an index-based approach will provide an objective basis for reviewing the rates, in line with many of the other grants under the ERF such as Re-equipment Grants and Site Formation Grant which are already revised annually according to the movement of the CPI(A).

7. Pursuant to this proposal, the prevailing rates of the items affected should be increased by 6.9% to take account of the change in CPI(A) from July 1996 to September 1997. here to explain.] Until July 1996, the rates were pegged to the relevant DRA. Subsequent annual revisions inscheduled for April each yearwhich month?] to these grants will be in accordance with the movement of the CPI(A) during the corresponding period.

8. Victims who are required to be permanently evacuated to Housing Authority's interim housing would until the year 2000 be offered rehousing to full-built THAs. The grant payable to them would continue to be pegged to the rate provided under the DRA to victims moving to full-built THAs. When the Housing Department clears all traditional THAs by 2000, there would be a need to determine a new basis for setting and revising the rates in this category of grants payable under the ERF.

9. Details of the grants affected are set out in Enclosure 1.

10. The proposed changes to the revision mechanism was endorsed by ERF Committee in June 1997. The existing and proposed revised rates of payment under the various grants are at Enclosure 2.

11. In line with the existing arrangement for other items of payment under the ERF, we propose that Members delegate to the Secretary for the Treasury the authority to approve future annual revisions to the rates in accordance with the approach proposed in paragraphs 6 to 10 above. We will seek Members' approval in the event of any proposed changes to the basis for revision.

FINANCIAL IMPLICATIONS

12. As there is no predictable pattern of fire, flooding or other natural disasters, we cannot assess precisely the likely financial implications of the proposals. Based on the number of cases over the past few years, we estimate that the proposed increase of 6.9% could result in additional expenditure of $54,100 a year. The proposal to revise the basis for future adjustments will not give rise to any significant financial implications.

BACKGROUND INFORMATION

13. In 1962, the Legislative Council enacted the Community Relief Trust Fund Ordinance (Cap. 1103) to establish a trust fund known as the Community Relief Trust Fund. It consisted of the unexpended balance of sums donated by the public in the early 1960s for the aid and relief of people who suffered loss as a result of four natural disasters, and further public donations received by the trustee, DSW. The Ordinance also provided for the establishment of the Community Relief Trust Fund Committee to administer the Fund. The Ordinance, the Fund and the Committee were renamed the Emergency Relief Fund Ordinance, the Emergency Relief Fund and the Emergency Relief Fund Committee respectively in 1973.

14. Community donations were the main source of income for the ERF when it was established in 1962. In 1972, the Finance Committee accepted the financing of the ERF by general revenue as far as this was necessary. Over the past decades, the Fund has received no public donations and the ERF has been financed entirely from general revenue.

15. The ERF grants are grouped into five5 sections. Section A covers…and so on [P(A) : Pl. complete death and personal injury grants; Section B covers domestic re-accommodation, re-equipment, site formation and repair grants; Section C covers grants for the reapair or replacement of vessels; Section D covers primary producer grants and Section E ocver special grants.

16. Since the proposal involves changes to the basis of revision mechanism of the rates under ERF as approved by Finance Committee in 1979, we need to seek the approval of the Finance Committee.

Health and Welfare Bureau
December 1997


Enclosure 1 to FCR(97-98)85

Emergency Relief Fund
Grants Affected by the 'Deletion' of Two Re-accommodation Grants (Items B1(b)(ii) and B1(c)(ii)) Payable to Victims Moving to Single Storey and Cockloft Type Temporary Housing Areas

Grants to be adjusted by Consumer Price Index (A)

(a) Two categories of Re-accommodation Grants (RAGs)

(i)

RAGs to victims whose domestic structures are rendered uninhabitable and who are resited and allowed to rebuild, or who rebuild in situ (item B2(ii)) - these grants are pegged to the deleted items B1(b)(ii) or B1(c)(ii) as appropriate;

(ii)

RAGs to victims whose domestic structures are undamaged but are required to be permanently evacuated and resited (item B4(c)(i)) - this RAG is related to the deleted item B1(b)(ii).

(b) Grants to owners of floating squatter boats severely damaged (item C3) - they are pegged to those grants under item B2(ii) described in sub-paragraph (a)(i) above.

(c) Repair Grants payable to victims who opt to repair in situ where domestic structures suffer damage (items B3(a)(i) and B3(b)) - these are pegged to either 50% of the relevant family rate under the deleted item B1(b)(ii) or 30% of the payment for a two-person family under the deleted item B1(b)(ii), depending on the degree of the damage to the domestic structures.

(d) Grants to victims who suffer damage or extensive loss to their home appliances, furniture and other personal belongings due to natural disasters (item B5) - they are pegged to one-third of the Repair Grants (item B3(a)(i)) described in sub-paragraph (c) above) plus the full rate of Re-equipment Grant (item B4(b)(ii)).

Grants to be pegged to another RAG

The Re-accommodation Grants (item B4(b)(i)) payable to victims whose domestic structures are undamaged but who are required to be permanently evacuated and moved to Housing Authority's interim housing presently - these are pegged to the deleted items (B1(b)(ii) and B1(c)(ii) as appropriate).


Enclosure 2 to FCR(97-98)85

Comparision between The Existing and Proposed Payment Rates

Section

Type of Grants

Existing Rates

Proposed Rates







B1(b)(ii)

Victims moving to Housing Authority temporary housing area (THA) single storey part-built structures

(a)

(b)

(c)

(d)

(e)

(f)

$5,140 for a single person;

$9,680 for a family of 2 persons;

$10,420 for a family of 3 persons;

$11,870 for a family of 4 persons;

$13,620 for a family of 5 persons; and

$15,550 for a family of 6 persons and above.


Obsolete







B1(c)(ii)

Victims moving to Housing Authority THA Cockloft type part-built structure

(a)

(b)

(c)

(d)

(e)

(f)

$5,790 for a single person;

$10,980 for a family of 2 persons;

$11,920 for a family of 3 persons;

$14,340 for a family of 4 to 5 persons;

$17,910 for a family of 6 to 7 persons; and

$19,740 for a family of 8 persons and above.


Obsolete






Section

Type of Grants

Existing Rates

Proposed Rates







B2(ii)

C3

Re-accommodation Grant to victims whose domestic structures rendered uninhabitable - victims resited and are allowed to rebuild, or victims rebuild in-situ.

Floating squatter boats -

Severe Damage

(a)

(b)

(c)

(d)

(e)

(f)

$5,140 for a single person;

$9,680 for a family of 2 persons;

$10,420 for a family of 3 persons;

$11,870 for a family of 4 persons;

$13,620 for a family of 5 persons; and

$15,550 for a family of 6 persons and above.

(a)

(b)

(c)

(d)

(e)

(f)

$5,500 for a single person;

$10,350 for a family of 2 persons;

$11,140 for a family of 3 persons;

$12,690 for a family of 4 persons;

$14,560 for a family of 5 persons; and

$16,630 for a family of 6 persons and above.







B3(a)(i)

Repair Grant to victims whose domestic structures substantially damaged and are allowed to repair

in-situ.

(a)

(b)

(c)

(d)

(e)

(f)

$2,420 for a single person;

$4,840 for a family of 2 persons;

$5,210 for a family of 3 persons;

$5,940 for a family of 4 persons;

$6,810 for a family of 5 persons; and

$7,780 for a family of 6 persons and above.

(a)

(b)

(c)

(d)

(e)

(f)

$2,590 for a single person;

$5,180 for a family of 2 persons;

$5,570 for a family of 3 persons;

$6,350 for a family of 4 persons;

$7,280 for a family of 5 persons; and

$8,320 for a family of 6 persons and above.







B3(b)

Repair Grant to victims whose domestic structures not substantially damaged but warrant some assistance.

$2,910 per family irrespective of size.

$3,120 per family irrespective of size.






Section

Type of Grants

Existing Rates

Proposed Rates







B4(b)(i)

Re-accommodation Grant to victims whose domestic structures undamaged but are required to be permanently evacuated and move to full-built structures of interim housing.

Pegged to the grants payable to victims moving to single storey part-built temporary housing i.e. (B1(b)(ii) and B1(c)(ii))

(a)

(b)

(c)

(d)

(e)

(f)

(g)

$2,080 for a single person;

$3,630 for a family of 2 persons;

$4,710 for a family of 3 persons;

$5,360 for a family of 4 persons;

$5,950 for a family of 5 persons;

$6,670 for a family of 6 persons; and

$7,630 for a family of 7 persons and above.






B4(c)(i)

Re-accommodation Grant to victims whose domestic structures undamaged but are required to be permanently evacuated and allowed to resite.

(a)

(b)

(c)

(d)

(e)

(f)

$5,140 for a single person;

$9,680 for a family of 2 persons;

$10,420 for a family of 3 persons;

$11,870 for a family of 4 persons;

$13,620 for a family of 5 persons; and

$15,550 for a family of 6 persons and above.

(a)

(b)

(c)

(d)

(e)

(f)

$5,500 for a single person;

$10,350 for a family of 2 persons;

$11,140 for a family of 3 persons;

$12,690 for a family of 4 persons;

$14,560 for a family of 5 persons; and

$16,630 for a family of 6 persons and above.










Section

Type of Grants

Existing Rates

Proposed Rates

B5

Grant to victims whose domestic structures not substantially damaged but suffering damage or extensive loss to their home appliances, furniture and other personal belongings.

(a)

(b)

(c)

(d)

(e)

(f)

$2,335 for a single person;

$3,900 for a family of 2 persons;

$4,790 for a family of 3 persons;

$5,795 for a family of 4 persons;

$6,850 for a family of 5 persons; and

$7,940 for a family of 6 persons and above.

(a)

(b)

(c)

(d)

(e)

(f)

$2,470 for a single person;

$4,120 for a family of 2 persons;

$5,050 for a family of 3 persons;

$6,110 for a family of 4 persons;

$7,220 for a family of 5 persons; and

$8,370 for a family of 6 persons and above.