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"The result of this exercise, I can confirm, would have been the same even if we had used the lowest 15 per cent income group.

"In other words, the monthly expenditure of all persons in the lowest 15 per cent income group was lower than the CSSA standard rate payment for all categories other than adults and elderly persons living in a family.

"I fully understand members' surprise regarding some of this data, especially those relating to the elderly. But we cannot simply ignore what the Survey tells us."

Some members had called for an increase in the level of assets a person should be able to hold while being eligible for CSSA payments. This related to a desire of some members to widen the CSSA safety net to support more of the unemployed.

In this respect, Mrs Fok strongly cautioned against any attempt to "hijack" the CSSA scheme to address problems it was never intended to address, whether this be unemployment or, retirement protection.

She reiterated that CSSA was a non-contributory scheme created to provide a safety net to meet basic needs. Elsewhere in the world, schemes designed to support appropriate lifestyles for the unemployed or for retired persons were contributory in

nature.

As regards the Hon Law Chi-kwong's request to fund social security and welfare services from separate accounts, Mrs Fok emphasised that within the limits of welfare spending, it was important to strike the right balance between spending on social security and direct welfare services.

Spending on welfare has been growing rapidly; this year it will have increased by 24 per cent in real terms over last year.

Since 1991-92, as a proportion of total recurrent public expenditure, welfare expenditure has grown from 7.8 per cent to 9.2 per cent.

"This is good news, but we must be careful not to allow the lion's share of this increased expenditure to go on social security funding instead of on the necessary sustained upgrading and expansion of welfare services," said Mrs Fok.

"When we come to examine the full recommendations of the CSSA Review, we must bear in mind that the total funding available for welfare is limited.

"There is inevitably, therefore, a trade-off; greatly increased expenditure on social security could, indeed, mean relatively less for expanding welfare services."

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