For discussion
FCR(97-98)89
on 16 January 1998
ITEM FOR FINANCE COMMITTEE
HEAD 170 - SOCIAL WELFARE DEPARTMENT
Subhead 179 Comprehensive social security assistance scheme
Subhead 180 Social security allowance scheme
Members are invited to approve supplementary provision of -
- $1,766.5 million under Subhead 179 Comprehensive social security assistance scheme; and
- $288.8 million under Subhead 180 Social security allowance scheme.
PROBLEM
The approved provisions for the Comprehensive Social Security Assistance (CSSA) and Social Security Allowance (SSA) schemes are inadequate to meet increased expenditure in 1997-98.
PROPOSAL
2. The Director of Social Welfare (DSW) proposes supplementary provisions of $1,766.5 million under Subhead 179 Comprehensive social security assistance scheme and $288.8 million under Subhead 180 Social security allowance scheme.
JUSTIFICATION
3. On the basis of actual expenditure for the eight months from April to November 1997, DSW estimates that expenditure for the whole financial year on the CSSA and SSA schemes will exceed the approved provision by $1,766.5 million and $288.8 million respectively, calculated as follows -
|
|
|
CSSA
scheme
($ million)
|
SSA
scheme
($ million) |
|
|
|
|
|
|
(a)
|
Expenditure from 1 April to
30 November 1997
|
6,151.9
|
2,935.5 |
|
|
|
|
|
|
(b)
|
Estimated expenditure from
1 December 1997 to
31 March 1998
|
3,370.0
|
1,502.1 |
|
|
|
|
|
|
(c)
|
Estimated total expenditure
for 1997-98 [(a) + (b)]
|
9,521.9
|
4,437.6 |
|
|
|
|
|
|
Less
|
(d)
|
Approved provision
|
7,755.4
|
4,148.8 |
|
|
|
|
|
|
(e)
|
Estimated shortfall [(c) - (d)]
|
1,766.5
|
288.8 |
|
|
|
|
|
4. As regards the CSSA scheme, the supplementary provision required is due to -
- an across-the-board increase of 6.5% in the rates of standard payments with effect from 1 April 1997 to take account of inflation. This amounts to $378 million;
- the general price increase in non-standard payments, i.e. special grants. This amounts to $116 million;
- a greater than anticipated increase in the number of CSSA recipients. This amounts to $928 million. In estimating the provision required for 1997-98, we have allowed for an 11% increase in the number of paid cases, but the actual number of cases has already increased by 14% from 155 300 cases in March 1997 to 176 500 cases in November 1997. Having regard to this rising trend, we anticipate another 4% increase in paid cases for the remainder of 1997-98; and
- a higher than anticipated average payment per case due to the continued increase in the number of cases involving larger households and an increase in payments for special grants. This accounts for $345 million of the supplementary provision required. In estimating the provision required for 1997-98, we assumed an average payment of $4,430 per case ($4,160 at 1996-97 price level). Based on the actual payments up to November 1997, we estimate the average payment per case for 1997-98 to be $4,600, which is 3.8% higher than the assumption we used in estimating the requirements for 1997-98.
5. As regards the SSA scheme, the supplementary provision required is mainly due to an across-the-broad increase of 6.5% in the rates of payment with effect from 1 April 1997 to take account of inflation which amounts to
$266 million and a slightly higher than estimated increase (about 1%) in the number of Old Age Allowance recipients which amounts to $23 million.
FINANCIAL IMPLICATIONS
6. We are seeking total supplementary provision of $2,055.3 million under Subheads 179 and 180. 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
7. The social security system comprises two major schemes: the CSSA scheme and the SSA scheme. An explanatory note is at the Enclosure.
8. On 21 March l997, Members approved an across-the-board increase of 6.5% in the rates of standard payments under the CSSA and SSA schemes to take account of inflation, and accepted the financial implications of $388.2 million a year for CSSA and $269.7 million a year for SSA. Members noted that these financial implications were estimated on the basis of the caseload prevailing at that time. We advised Members that we would seek supplementary provision, including any additional requirements for non-standard payments, later in the year.
Health and Welfare Bureau
January 1998
Enclosure to FCR(97-98)89
Social Security System
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 essential and special needs can be met. 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. Both schemes are non-contributory. The CSSA scheme is means-tested. Applicants for SSA are not subject to a means test except that 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.
3. 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.
Comprehensive Social Security Assistance Scheme
4. The amount of assistance is determined by the resources and needs of the applicant. The difference between the applicant's assessable income and his total needs as determined by reference to certain prescribed levels, will be the amount of assistance payable.
5. The CSSA scheme embraces different standard payments to meet the basic and general needs of broad categories of recipients. In addition, a long-term supplement is paid on an annual basis 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 family. They include payments to cover such expenses as rent, school fees and other educational expenses, medically recommended diets, spectacles and dentures.
6. With effect from 1 April 1997, elderly recipients aged 60 or above who are permanent Hong Kong residents and who have been receiving CSSA continuously for three years are allowed to continue to receive their monthly standard rate payment and annual long-term supplement if they choose to leave Hong Kong to take up permanent residence in Guangdong Province in the Mainland of China.
Social Security Allowance Scheme
7. Four allowances are payable under this scheme as follows -
- Normal Disability Allowance
For severely disabled persons who, broadly speaking, suffer from a 100% loss of earning capacity, or who are profoundly deaf.
- 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.
- Normal Old Age Allowance
For persons aged between 65 and 69 whose income and assets do not exceed the prescribed levels.
- Higher Old Age Allowance
For persons aged between 70 and over.
