Legislative Council

LC Paper No. CB(2)1664/98-99
(These minutes have been
seen by the Administration)

Ref : CB2/PL/WS

LegCo Panel on Welfare Services
Minutes of special meeting
held on Monday, 9 December 1998 at 10:30 am
in Conference Room B 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
Hon Eric LI Ka-cheung, JP
Hon LEE Kai-ming, JP
Hon Fred LI Wah-ming
Dr Hon YEUNG Sum
Hon YEUNG Yiu-chung
Hon LAW Chi-kwong, JP

Members Absent :

Hon David CHU Yu-lin
Hon Ronald ARCULLI, JP
Hon CHOY So-yuk

Public Officers Attending :

Mrs Katherine FOK, JP
Secretary for Health and Welfare

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

Mr LO Chi-hong
Principal Assistant Secretary for Health and Welfare (Welfare 1)

Mr Andrew LEUNG, JP
Director of Social Welfare

Mrs Louise WONG, JP
Deputy Director of Social Welfare (Administration)

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

The Chairman welcomed representatives of the Administration to the meeting, the purpose of which was for the Administration to brief the Panel on the long-awaited Report on Review of the Comprehensive Social Security Assistance (CSSA) Scheme which was tabled at the meeting. Following the briefing, the Report would be further discussed at the next regular meeting on 14 December 1998.

Policy Directions

2. The Secretary for Health and Welfare (SHW) said that the three main objectives of the Review were as follows -

  1. to continue to provide a safety net for those with genuine financial need, particularly the elderly, the disabled and the chronically ill who were not supported by their families and had no working ability;

  2. to encourage and help unemployed CSSA recipients to re-join the workforce so that they could lead independent and productive lives. To ensure that CSSA rates were set at levels that would not create disincentives to work and that CSSA payments were consistent with the wider economic situation, the Administration proposed to reduce the standard rate payment to able-bodied adults/children in households comprising three or more such members; and

  3. to ensure that resources were directed to help the truly needy.

    SHW pointed out that CSSA expenditure, which had increased five-fold from $2.4 billion in 1992-93 to $13 billion this year, was a heavy burden on Hong Kong and might affect the resources available for other services like education and medical services. She informed members that there would be a six-week consultation period for the public and interested organizations to submit their views. She said that the Administration would consider all the views put forward before making its final recommendations.

    "Support for self-reliance" Scheme

    3. The Director of Social Welfare (DSW) said that the Review was directed towards "Support for Self-reliance" as printed on the cover of the Report. He referred to an earlier study in February 1998 to explore the problems faced by unemployed able-bodied CSSA recipients and single parents with the youngest child aged 12 or above in re-entering the labour market. During the three-month study, with counselling and other support services provided to the 250 participants by the Social Welfare Department (SWD), the Labour Department (LD) and the Employees Retraining Board (ERB), 20% of them were able to find jobs within three months, out of whom 76% did so on their own. Taking into account overseas experience and the findings of the study, the Report proposed to implement a "Support for Self-reliance" Scheme to encourage and assist the unemployed CSSA recipients to regain employment and move towards self-reliance. He outlined the main features of the Scheme which comprised three main components, namely active employment assistance, additional help by way of community work, and incentives to work through the provision of disregarded earnings.

    Other recommendations

    4. In response to members' request for information on the other changes recommended in the report, DSW explained that he had only highlighted the main recommendation in order to allow time for questions from members. Members pointed out that as the Report was only tabled, they did not have a chance to read it before the meeting and therefore would like to be briefed on the other recommendations as well.

    General introduction

    5. DSW said that the current review was prompted by growing public concern about the growth in the CSSA caseload and expenditure. In 1993-94, CSSA expenditure took up 27% of social welfare spending but now it constituted 49% of the total. As a percentage of the overall government expenditure, it also rose from 2.6% to 6.7% in the same period. There was particular concern over the sharp increase in the number of people of working age turning to CSSA and the high levels of CSSA benefit for larger families as compared with market wages. There was also increasing perception that some people were abusing the system.

    Standard rate for larger households

    6. DSW then briefed members on the proposed reduction in the standard rate payment to able-bodied adults/children in households with three or more such persons. For such three-member households currently receiving on average about $9,000 per month, the standard rate payment would be reduced by 10%. For such households comprising four such persons currently receiving on average $10,000 per month, the standard rate payment would be reduced by 20%. Such a scale of reduction was to recognize that it was easier for larger households to economize on their expenditures.

    Special grants and supplements

    7. As standard rates already covered the recipients' basic needs, it was considered necessary to limit the types of special grants for able-bodied adults/children to those which were absolutely essential, such as rents, water charges and schooling and child care centre expenses. DSW emphasized that special grants payable to recipients who were old, disabled or medically certified to be in ill-health would not be affected. The annual Long Term Supplement would be payable only to cases involving the old, the disabled and the sick according to the number of such persons in the family and the Single Parent Supplement would be granted only to those single parents with at least one child aged below 12 .

    Asset limits

    8. The asset limit for single able-bodied adult would be $24,000 instead of the present limit of $37,000. An owner-occupied residential property would be taken into account for the asset test but the applicant would be allowed a grace period of 12 months to make alternative arrangements. The new policy would not be applicable to households with any member who was old, disabled or sick.

    Prevention of fraud and abuse

    9. The measures to be taken would include home visits for all CSSA new cases and targetted CSSA cases and strengthening the Special Investigation Team of the SWD to tackle suspected fraud cases.

    II. Members' comments

    10. Mr Eric LI declared interest as Chairman of the Hong Kong Council of Social Service. However, speaking in a personal capacity, he fully understood the need for such a review and accepted that the CSSA payments for large families were higher than market wages for low-end jobs. The social welfare sector also understood the need for a review. On the other hand , the present economic downturn and the difficulties in finding employment should also be taken into account. He pointed out that for many years now, considerations had been made based on the recipients' basic needs and social needs. He had seen briefly from the Report that comparison was now made with households in the lowest income groups and wished to know whether there had been a change of policy. He also pointed out that there was a need for preventive and support measures. As regards the requirement of community work, he questioned the wisdom of forcing unwilling people to perform such work and wished to know the difference between such community work and the community service orders.

    11. In reply, SHW said that there was no change in policy as the CSSA Scheme still provided a safety net for the financially vulnerable. She pointed out that the amount of CSSA varied with family circumstances taking into account basic and social needs. She proposed that the subject be discussed in more detail at the next meeting on 14 December 1998 after members had a chance to read through the Report.

    12. Mr LEE Cheuk-yan said that the proposals gave the impression that while the Government was all out to save the stock and property markets, it displayed little concern for vulnerable people who needed help. He questioned the rationale for reducing the standard rate which was provided to meet the basic need. He noted that comparison was made with non-CSSA households in the lowest 25% expenditure group and considered that the proposal had the effect of dragging down wages in the labour market and forcing people to accept low wages. He also pointed to the difficulties in finding jobs in the present economic climate which made it difficult for the "Support for Self-reliance" Scheme to work.

    13. DSW said that the "Support for Self-reliance" Scheme did not guarantee finding a job but there was a need to ensure that the safety net provided by CSSA should not become a long term reliance for the recipients who were able to work. The difficulties in finding jobs at present required more efforts on the part of the job-seekers and assistance would be provided to them in this regard. As regards Mr LEE's question whether the Government was departing from the policy of providing a safety net and the Basic Needs Approach, DSW said that CSSA still provided a safety net but with the amount of standard rates for larger households adjusted only.

    14. Mr YEUNG Yiu-chung considered that the emphases in the Report were misplaced. He asked for information on CSSA expenditure in the next five years and details of the assistance to find work to be provided. SHW pointed out that a positive attitude towards job searching was as important as availability of support services. She referred to the results of an earlier study which indicated that most unemployed CSSA recipients wished to go back to work and that with additional support services, many of them were able to secure a job. SHW said that SWD would work closely with LD and the ERB to provide the necessary support services to the unemployed CSSA recipients. Adm

    15. Mr Fred LI asked for figures to support the reason for the reduction in standard rates for larger families. Referring to Annex 15 of the Report, he expressed surprise at the proposed cancellation of the grant for spectacles which was a basic need and was of a re-imbursement nature. He considered that based on Annex 11, the standard rates for three-member and four-member households should be reduced by 7% and 16 % respectively instead of the proposed 10% and 20%. He wished to know whether the median income would be used as the index for adjustment of CSSA payments in future. In reply, DSW said that there would not necessarily be a direct linkage with wages but wages would be used as reference. Adm

    16. Miss Cyd HO pointed out that the Government had not previously responded to the proposal for adopting a poverty line. She considered that there was a need to draw a poverty line so that assistance would also be provided to those whose income was beneath the line drawn. She wished to know how the standard rate was calculated and how much was allocated for food in order to make sure that the basic needs could still be met. Adm

    17. Mr LAW Chi-kwong referred to the scattered nature of the various proposals and the lack of clarity of some of the proposals. He asked for a comprehensive list of recommendations to be provided before the next meeting. He wished to know whether a CSSA recipient attending a training programme still had to perform community work and whether the median income would be used as the index for future adjustment. The Deputy Director of Social Welfare (Administration) clarified that in deciding on CSSA payments, not only the basic needs were taken into account, and there was flexibility to add on other allowances as necessary. She also pointed out that the CSSA standard rates were currently calculated on individual basis, it had not taken into account the fact that larger households on average enjoyed lower per capita expenditure because it was easier for them to economize. Referring to Annex 13, she said that taking into consideration other special grants, the downward adjustment was only 5-17% instead of 10% and 20%. Further, she pointed out that CSSA should not become a disincentive to work but over 30% of CSSA recipients had been on CSSA for more than two or three years. As regards the requirement for community work as a condition for continuing to receive CSSA, it was aimed at helping the recipients to maintain their work habit and to widen their social circle. Assistance would be rendered by various Government departments and non-governmental organizations to help them to find work. She emphasized that a safety net was still provided but any family should plan its spending according to its income and CSSA families were no exception. Adm

    18. Mr LEE Cheuk-yan noted that the disregarded earnings of up to a maximum of $1,805 a month had not been raised and expressed concern that a CSSA recipient able to find work would result in getting less net income in view of the need for expenses in connection with work. He was also concerned that the requirement for community work might take paid employment away from people and increase unemployment in general.

    19. Mr Eric LI referred to paragraph 12 of the Report and asked for a breakdown of the savings to be achieved. He also wished to know whether the savings would be used for providing new services. Adm

    20. Miss Cyd HO wished to know how the public consultation would be carried out and how public views would be quantified so that the public would know how to respond. Adm

    21. The meeting ended at 12 noon.

    Legislative Council Secretariat
    9 March 1999