Press Releases

Downward adjustment in CSSA not targeted at vulnerable groups

The Deputy Secretary for Health, Welfare and Food, Mr Patrick Nip Tak-kuen, today (March 2) reiterated that the decision to adjust the standard payment rates of the Comprehensive Social Security Assistance (CSSA) and Social Security Allowance (SSA) is neither targeting at the vulnerable groups nor achieving savings for the budget deficit.

In response to media questions after attending RTHK's City Forum, Mr Nip said the adjustments would enable the Government to ensure CSSA, as a safety net for the vulnerable groups, could be maintained within our means and that existing resources would go further to meet the increasing demand.

He noted that the Government had kept the standard payment rates frozen since 1999 despite continuous deflation.

"With deflation likely to persist for some time and in view of the unprecedented budget deficit situation, there is ground for not waiting further to recoup the over-adjustment.

"In fact, the 11.1 per cent adjustment would have only reflected the deflation situation up to March 2002. Continued deflation has been registered in the Social Security Assistance Index of Prices (SSAIP) since April 2002," he said.

Mr Nip noted the Government had at present no intention to cap Government's expenditure on CSSA but would have to continuously review the operation of the Scheme to ensure it would be financially sustainable.

At present, there are 267,609 CSSA cases and the provision for CSSA expenditure in 2002/03 is $16 billion (11.1 per cent over 2001/02 provision). The Administration had recently sought additional provision of $250 million to meet increasing demand. The estimated provision for the coming fiscal year is expected to top the $16.2 billion.

Mr Nip expected the provision for CSSA would reach $18 billion if the Government failed to contain the growth in CSSA expenditure.

"The figures clearly demonstrate the Government's commitment to help the vulnerable groups because even with the downward adjustment in CSSA payments, the Government will continue to increase its provision to social welfare and CSSA," he said.

Mr Nip stressed that the savings achieved in the downward adjustment of CSSA would be used to meet the expected growth in CSSA caseload to help those in need.

To help the able-bodied recipients to re-join the workforce, Mr Nip noted the Government would intensify the support for self-reliance measures, which were first introduced in 1999, to encourage and assist the able-bodied CSSA recipients towards self-reliance.

"In helping the able-bodied recipients, our objective is to support, not impede their will for self-reliance. The intensified measures include commissioning Non-government Organisations (NGOs) to launch new Intensive Employment Assistance Projects with the proposed Lotteries Fund funding of $100 million to assist CSSA recipients back to work; and raising the maximum level of disregarded earnings (DE) from $1,805 to $2,500 a month," he said.

Earlier, the Executive Council had approved the following proposals:

* the standard rates for non able-bodied CSSA recipients, namely the elderly, the disabled and those medically certified to be in ill health, be adjusted downwards by 11.1 per cent by two phases, first by 6 per cent from October 2003, followed by the second phase adjustment effective from October 2004;

* the standard rates for able-bodied CSSA recipients under the CSSA Scheme, and those of Disability Allowance (DA) under the Social Security Allowance (SSA) Scheme be adjusted downwards by 11.1 per cent from June 2003, and other standard payment rates under CSSA be reduced in accordance with the established adjustment mechanism for all categories of recipients from June 2003;

* the Old Age Allowance (OAA) rates under the SSA Scheme should remain frozen at the current levels until inflation in subsequent years catches up; and

* intensified support for self-reliance measures be introduced to encourage and assist able-bodied CSSA recipients towards self-reliance.

End/Sunday, March 2, 2003
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