File ref: HWCR/2/4821/58 Pt. 42

LEGISLATIVE COUNCIL BRIEF

REVIEW OF THE COMPREHENSIVE SOCIAL SECURITY ASSISTANCE (CSSA) SCHEME -- FINAL PACKAGE OF PROPOSALS

INTRODUCTION

At the meeting on 9 February 1999, the Council ADVISED and the Chief Executive ORDERED that the we should implement the package of proposals as originally put out for public consultation but make two modifications on compassionate grounds -

1. to drop the proposal to require single parents to seek work when their youngest child reaches the age of 12; and

2. to continue to pay special grants for burial expenses to able-bodied recipients.

BACKGROUND

Public Consultation

2. The Chief Executive in Council has previously decided that the report on the Review of CSSA Scheme should be issued for public consultation.

3. The CSSA review report was released for public consultation on 9 December 1998. During the six-week public consultation period, the Administration organised briefings and attended meetings with various public and private organisations including - two meetings with the Legislative Council (LegCo) Panel on Welfare Services; a motion debate in LegCo; three meetings with the Social Welfare Advisory Committee (SWAC); two briefings for the Provisional District Board (PDB) members in Hong Kong, Kowloon and the New Territories respectively; ten meetings of PDBs or their committees, namely, Kowloon City, Tai Po, Tuen Mun, Sham Shui Po, Yuen Long, Southern, Wong Tai Sin, Central & Western, Kwun Tong and Wan Chai; a meeting with Heung Yee Kuk; and meetings with political parties, welfare organisations, business associations, kaifong associations, academics and concern groups.

4. We also attended radio and television programmes to explain the proposals and respond to public enquiries and comments. Furthermore, an opinion survey was conducted to gauge public views on a scientific basis.

5. During the public consultation period, Social Welfare Department (SWD) received a total of 2 602 submissions through telephone, post, fax and electronic mail. More than 1 900 submissions offered comments on one, two or a few selected proposals. The comments were diverse but the majority was made in relation to the proposals concerning single parents and reduction in the levels of CSSA payment. Among those submissions which have commented on the package of recommendations as a whole, 269 were in support and 406 were in opposition.

Opinion Survey

6. An independent market research company was commissioned to conduct an opinion survey on the package of proposals contained in the review report. A random sample of 1 519 people were selected and interviewed over the telephone. The findings indicated that the objectives as well as most of the proposed measures were supported by the public. Most of the proposed measures had a support rate of 70% or above. As regards the more controversial proposal of requiring single parents to seek work, the views were more evenly split, with 55% in support and 40% in opposition. A summary of the survey findings is at Annex A.

7. A number of public opinion polls were conducted by various organisations during the consultation period, of which one was by a television broadcast company, two were by a radio station and two by local newspapers. The majority of the respondents interviewed in the media polls were supportive of Government's proposals, i.e. the 10% to 20% adjustments to the standard rates for households with three able-bodied members or more; the requirement for CSSA recipients to perform community work; single parents should find work after their youngest child reaches the age of 12; and the reduction in asset limits.

8. The polls conducted by an educational institute and a political party, however, seemed to portray a different picture. The majority of the respondents thought that Government should divert more resources to providing vocational training and should help CSSA recipients find jobs rather than forcing them to take up community work. There were divided views on whether the existing CSSA payment levels were sufficient in covering the basic needs of larger households. Many of them considered that single parents should be allowed to work part-time or receive training when their youngest child reaches the age of 12. It should, however, be noted that the questions used in these polls were sometimes designed to assess public views on other aspects of the problems of poverty and unemployment and therefore covered different issues from our review proposals.

Public Views Expressed

9. Consistent with the results of the public opinion survey, there has been extensive public support for both the objectives and the majority of the proposed measures in the review report, in particular -

1. the public shared our concern about the rapid growth in CSSA expenditure;

2. they agreed that the proposed tightening measures should not affect the elderly, the sick and the disabled;

3. there was a consensus in the community that more should be done to encourage and help the unemployed CSSA recipients to rejoin the workforce. Nevertheless, there were also concerns that it might be difficult for unemployed CSSA recipients to find jobs under the current economic climate. It is therefore important for the Labour Department and the Employees Retraining Board to step up efforts to provide help to the unemployed recipients, in addition to extra assistance being provided by SWD under the Active Employment Assistance scheme;

4. there was strong in-principle support for the proposal to require unemployed CSSA recipients to perform community work. But there were concerns about possible stigmatisation of the participants and the high administrative costs of the scheme;

5. the public welcomed the proposal to disregard totally the first month's income of a new job secured by an unemployed CSSA recipient. But there were calls for further relaxation in the eligibility requirements for disregarded earnings to provide additional incentives;

6. there was general support for the proposed reductions in CSSA payments to larger households (with three able-bodied members or more). However, there were also concerns that the reduced CSSA payment could not cover the basic needs of recipients. There were specific suggestions from some LegCo Members and welfare groups that Government should continue to pay special grants for spectacles and burial expenses to able-bodied recipients;

7. there were diverse public opinions on the proposal for single parents to seek work when their youngest children reached the age of 12. It was pointed out that children between 12 and 15 were in their formative years and would require close parental care and attention, otherwise, they might become a potential source of social problems;

8. there was extensive support for both reduction in asset limit and inclusion of the value of self-owned properties into the assessment of an applicant's asset for cases involving able-bodied recipients; and

9. the proposals to strengthen prevention and investigation of fraud and abuse received extensive public support.

10. A summary of the views expressed by different sectors of the community during the public consultation period is at Annex B.

Proposed Changes to the Original Package of Proposed Measures

11. After careful consideration of the views and comments expressed by different sectors of the community during the public consultation, we decide to make two modifications to the original package of proposals on compassionate grounds, as set out in the following paragraphs.

Single Parents

12. We note that there is considerable public sympathy for single parents who have to bring up young children single-handedly. It is pointed out that children between 12 and 15 are in their formative years and are vulnerable. If they are not given adequate parental care and support, there is a real risk of their falling victims to problems such as juvenile delinquency and drug addiction. On compassionate grounds, we are prepared to concede and continue with the existing policy of requiring single parent CSSA recipients to seek work when their youngest child reaches 15.

Special Grants

13. There is strong public sentiment that Government should retain special grants for burial expenses for able-bodied recipients. Burial expenses for able-bodied recipients are usually unplanned for and are expensive having regard to the means of CSSA recipients. We therefore retain it for able-bodied recipients.

Adjustment to Standard Rates

14. There are concerns that the reduced payment for households with three able-bodied members may not be enough to cover their basic needs. The concern is unfounded as our calculations have shown that the adjusted payment levels are higher than the amount required by three-person households to meet their basic needs. We therefore do not make any changes to the proposed adjustments to the standard rates payable to larger CSSA households.

15. A summary of the original and revised proposals is at Annex C.

Implementation of the Proposals

16. We have already taken into account the above revisions to the CSSA Scheme when we prepare the 1999-2000 Draft Estimates, which will soon be publicised.

17. To allow time for SWD to review all relevant cases and amend the payment rates as appropriate, we will implement the package of measures on 1 June 1999.

FINANCIAL AND STAFFING IMPLICATIONS

18. The proposed package only tackles the immediate problem of able-bodied CSSA recipients with a view to ridding the system of the disincentives to work. Taking account of the projected increase in CSSA cases and the modifications, the final package of proposals would generate notional savings of about $700 million in Government expenditure. For 1999-2000, we project CSSA expenditure will continue to grow and the expenditure will exceed $15 billion. Details will be announced in the Draft Estimates to be publicised on 26 February.

PUBLICITY

19. We will brief the LegCo Panel on Welfare Services on 24 February. A press release will be issued to promulgate the final package of measures. We will also attend radio phone-in and public affairs programmes, if requested, to explain our policy.

ENQUIRY

20. For enquiries, please contact Mr. C H LO, Principal Assistant Secretary for Health and Welfare at 2973 8108.

Health and Welfare Bureau
Government Secretariat
February 1999

Annex A

SUMMARY OF KEY FINDINGS

	Agree %	Disagree %	No comment %
(a) The sharp growth in CSSA expenditure was a worry to the public	76	16	8
(b) Terminating assistance for unemployed CSSA recipients with working ability who refuse job offers or interviews without acceptable reasons	93	5	2
Among those who disagreed
(i) Reducing assistance for these recipients	65	31	4
(c)Requiring unemployed CSSA recipients with working ability to do community work regularly	86	11	3
(d)Terminating assistance for unemployed CSSA recipients with working ability who refuse to do community work without acceptable reasons	81	14	5
Among those who disagreed
(i) Reducing assistance for these recipients	49	48	3
(e) Requiring single parents to seek jobs if their children are aged 12 or over	55	40	5
(f1) Reducing the CSSA payment for a four-person family from about $11,000 to $9,500	68	26	6
Among those who disagreed	Too much %	Too little %	No comment %
(i)Views on the proposed payment of $9,500	14	81	5
Sample size (1 519)
Base : All respondents

	Agree %	Disagree %	No comment %
(f2) Reducing the CSSA payment for a three-person family from about $9,000 to $8,000	69	24	7
Among those who disagreed	Too much %	Too little %	No comment %
(i) Views on the proposed payment of $8,000	11	84	5
	Agree %	Disagree %	No comment %
(g) Using a lower asset limit for families having able-bodied adult(s)	73	20	7
Among those who agreed(i)
Reducing the asset limit for a five-person family having able-bodied adult(s) from $110,000 to $64,000	71	25	4
(h) Including owner-occupied residential properties in asset test for families having adult(s) with working ability under 50 years old	69	25	6
Among those who disagreed
(i)Including owner-occupied residential properties in asset test after a family had received CSSA for 12 months or more	45	51	4
(i) The tightening measures should not affect recipients who are old, disabled or ill-health	98	1	1
(j) Requiring CSSA applicants to take an oath to declare that all information provided are true	86	9	5
Sample size (1 519)
Base : All respondents

Annex B

LIST OF CONSULTATION ACTIVITIES

Date	Activities
1998
9 December	Briefing for Social Welfare Advisory Committee Briefing for Legislative Council Panel on Welfare Services
10 December	Briefing for Provisional District Board Chairmen
14 December	Briefing at Hong Kong Council of Social Services Quarterly Meeting
15 December	Briefing for Kowloon Region Provisional District Boards
16 December	Briefing for New Territories Region Provisional District Boards
17 December	Briefing for Hong Kong Region and Islands Provisional District Boards
18 December	Social Welfare Advisory Committee Special Meeting
22 December	Meeting with Hon. Christine LOH
28 December	Meeting with Democratic Party
31 December	Attended Social Welfare and Medical Service Committee Meeting of Kowloon City Provisional District Board
1999
5 January	Attended Tai Po Provisional District Board Meeting Attended Tuen Mun Provisional District Board Meeting Luncheon Speech at Lion's Club Meeting with Hong Kong Progressive Alliance
7 January	Attended Sham Shui Po Provisional District Board Meeting Attended Kaifong Associations Tea Reception
8 January	Meeting with Hon. CHAN Yuen-han Meeting with Liberal Party
10 January	Attended Open Forum organised by Yan Oi Tong, Tuen Mun
11 January	Attended Social Services & Publicity Committee Meeting of the Yuen Long Provisional District Board Attended Community Buildings and Affairs Committee Meeting of the Southern Provisional District Board Meeting with Hon. Emily LAU Wai-hing
12 January	Attended Wong Tai Sin Provisional District Board Meeting
14 January	Attended District Social Services Committee Meeting of Kwun Tong Provisional District Board Attended Central & Western Provisional District Board Meeting
15 January	Social Welfare Advisory Committee Special Meeting
16 January	Meeting with Hon. LEE Cheuk-yanMeeting with Single Parent Groups organised by Association for the Rights of Industrial Accident Victims
17 January	Attended Open Forum organised by Democratic Party
19 January	Attended Wan Chai Provisional District Board Meeting Luncheon Speech at Rotary Club Attended Meeting at Heung Yee Kuk, New Territories Meeting with HK Federation of Trade Unions

Annex C

SUMMARY OF THE ORIGINAL AND REVISED PROPOSALS

Proposal	Original	Revised
Active Employment Assistance (AEA)	Social Welfare Department (SWD), Labour Department and Employees' Retraining Board to work closely and provide a co-ordinated programme of counselling, employment assistance and retraining for the unemployed CSSA recipients. Participants will draw up own action plan to find work. SWD will interview the participants regularly to monitor progress and render appropriate assistance.	No revision
Community Work	Unemployed recipients are required to perform community work on a regular basis as a condition of receiving CSSA. No revision Disregarded Earnings Totally disregard the first month's income from a newly secured full-time job.	No revision
Termination of CSSA assistance	Strictly enforce the existing policy and include performance of community work as one of the requirements.	No revision
Standard Rates	For households comprising three able-bodied adults/ children, their standard rate payment will be reduced by 10%. For households comprising more than three able-bodied adults/children, their standard rate payment will be reduced by 20%.	No revision
Special Grants and Supplements	Provide special grants for rent, water charge, school related and child care centre fees only for able-bodied recipients. Long Term Supplement will be payable only to elderly, disabled and ill-health recipients. Able-bodied recipients will also be eligible for special grant for burial expenses.
Assets Limit	Reduce the assets limits for cases involving able-bodied adult.	No revision
Owner-occupied residential property	Include the value of owner-occupied residential properties into the assessment of asset for cases involving any able-bodied recipients aged below 50. A grace period of 12 months will be provided for the applicant to make alternative arrangements.	No revision
Single parent	Single parents are required to seek work when their youngest child reaches the age of 12, instead of 15. Single Parent Supplement will be granted only to single parents with at least one child aged below 12.	Continue with the current arrangements.
Prevention of fraud and abuse	Strengthen the Special Investigation Team. Resume home visits for all CSSA new cases. Strictly require all CSSA applicants to apply on a household basis if they are living with other income-earning family members.	No revision