XN000022-1995-11-02 — Page 41

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Our Review covers much more than just assessing the level of standard rates. Even that assessment is not complete yet because we still need to examine carefully the full 12-month data from the HES and to refine further our cross-check methodology of building up a basic needs approach. Other issues being considered in the Review could also have a major impact on the level of support provided to CSSA recipients.

Before leaving this subject, I should like to comment on a specific proposal made by some Members who suggested that CSSA rates should be pegged to 30% of the median wage. This would be totally contrary to our philosophy of assessing payments against individual needs. In our system, very few recipients receive exactly the same payment because standard rates vary according to the age of recipients and the payment of special grants vary according to the precise nature of their special needs. If our safety net is to address needs, such an approach is necessary. To set rates by reference to a percentage of the median wage would be too rigid to address needs; it should also be bome in mind that the median wage can drop in times of recession. At such times it would not necessarily be wise to decrease welfare payments as well. We do already have a mechanism for regularly increasing all CSSA rates in line with a special inflation index to ensure their real value is maintained. It may be of some academic interest to note that the average CSSA payment for a single elderly person already represents about 29%, and for a family of four represents 95% of the median wage.

Some Members have called for an increase in the level of assets a person should be able to hold while being eligible for CSSA payments. I believe this recommendation is connected to wider concerns Members have expressed about the plight of the unemployed and how the CSSA scheme can be revised to address their problems. Of course, an unemployed person is eligible for CSSA support if his financial situation meets the eligibility criteria. But I would strongly caution against any attempt to "hijack" the CSSA scheme to address problems it was never intended to address, whether this be unemployment or, indeed retirement protection. The CSSA is a non-contributory scheme created to provide a safety net to meet basic needs. In other places, schemes have been devised to provide unemployment benefits or old age pensions but these schemes are normally contributory. Indeed, the mandatory provident fund scheme to be set up here is a contributory scheme designed to provide financial support in retirement. These schemes are often designed to support a lifestyle well above the basic needs level we seek to maintain in our safety net.

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