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CSSA
The first point to be made on CSSA is that the Scheme is a "safety net" which gives financial assistance to those who need it to bring their income up to a level where their basic and special needs can be met. The second is that it is non- contributory and means-tested. These points are not new, but they bear repeating. This is because it is important people understand that CSSA is not retirement protection. Schemes providing such protection are almost always contributory and are aimed at maintaining a lifestyle similar to that enjoyed while still working.
Neither is CSSA, as some Members have suggested, the means to address social relativities based on a comparison of the lifestyle of those on CSSA and that of the majority of the population.
CSSA payments are based on need. Pegging them to a certain percentage of the median wage, as some Members suggested, would mean that clients with greater needs would receive the same as those with lesser needs.
CSSA Review Methodology
I should also like to address views by some members on the methodology used in the CSSA Review. The answer to the question how much is 'enough' cannot be totally objective. We sought to minimise subjectivity by using two approaches. First, we took data from the Household Expenditure Survey and compared the CSSA standard rates with what people in the lowest 5% to the lowest 20% income groups actually spend. Secondly, we drew up basic needs budgets, for goods and services in daily life for each category of CSSA recipient.
The findings of the two different approaches corroborated each other. We based our proposed increases on these objective findings.
Rejoining the Workforce
In contrast to the many Members calling for increases in CSSA, a few voiced a concern that we are being too generous and that increases, in particular, in the adult rate might create a disincentive for these recipients to go out and find a job. Those on CSSA, who are able to work, must sign on with the Labour Department. We are also keen to provide positive encouragement to them to rejoin the workforce. Hence our increase of 66%, since March 1995, in the disregarded earnings limit which sets the earnings they may retain without such income being offset against their CSSA payments. In addition, we allow certain categories of CSSA recipients, such as single parents, to retain in full their first month's income from a new full-time job in addition to their CSSA payment. We have undertaken to review this concession later this year to see whether there is a case for extending it.