XN000022-1995-11-02 — Page 40

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Our approach to social security is different. We consider it to be a safety net. It is this fundamental difference in approach which has led us to arrive at different payment levels. The level of payments in our system are set to cover basic needs for food, clothing, housing, fuel, light and water and transport as well as for household goods. In addition, payments are made to meet the education expenses of children. Medical treatment for recipients at public clinics and hospitals is free.

Whereas our basic philosophy is different from that adopted in that Report, our methodologies are not that far apart. But we have one key advantage in that we have been able to use the statistics produced by the first six months of the latest Household Expenditure Survey (HES). This has enabled us to compare our CSSA standard rates with what CSSA recipients say they spend and with what people in lower income groups also say they spend monthly. These statistics showed us quite clearly that the CSSA standard rates for certain groups of recipients were too low. As a cross-check on the results of this HES-based methodology, we also built up a basic needs budget for each category of CSSA client. Although more work needs to be done to refine further this approach, the preliminary results broadly supported the conclusions we reached using the HES method.

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I shall pause here to address a technical point raised by some Members about our methodology. For comparison purposes, we looked at the expenditure patterns of those in the lowest 5 per cent income group that is the income group immediately above those on CSSA. We did so because we consider it natural to compare CSSA recipients, the most vulnerable in our community, with the group nearest to them in terms of financial resources. For those uncomfortable with this approach, I can offer some further elaboration.

The result of this exercise, I can confirm, would have been the same even if we had used the lowest 15% income group. In other words, the monthly expenditure of all persons in the lowest 15% 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.

When our comprehensive Review of the system is completed next year, we shall of course present all our recommendations to this Council and there will then, no doubt, be an important and fully informed debate on them.

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