Replies to LegCo questions
LCQ13: Disability Allowances
Following is a question by the Hon Lee Cheuk-yan and a written reply by the Secretary for Health, Welfare and Food, Dr Yeoh Eng-kiong, in the Legislative Council today (December 18):
Question:
Given that the Chief Executive pledged not to cut the rates of the Old Age Allowances under the Social Security Allowance Scheme ("SSAS") when he attended the Question and Answer session of this Council on October 10, this year, will the Government inform this Council whether it plans to adjust the rates of the Disability Allowances, which are also payable under SSAS?
Reply,
The Disability Allowance (DA) is one of the two allowances payable under the Social Security Allowance (SSA) Scheme. It aims to provide a flat-rate monthly allowance to the severely disabled to meet special needs arising from disability. It is non-means-tested, non-contributory and entirely funded by General Revenue.
A severely disabled person can receive a monthly Normal DA of $1,260. For those who require constant attendance but are not receiving such care in a government or subvented residential institution or a medical institution under the Hospital Authority, they are eligible for a Higher DA of $2,520 per month.
The SSA payment rates are revised with reference to the price movements as reflected by the Social Security Assistance Index of Prices (SSAIP)(Note*1). The SSA payment rates were revised upwards by 6.5 per cent in 1997-98 and 4.8 per cent in 1998-99 on the basis of the then forecast SSAIP. Taken together, the payment rates have been increased by 11.6 per cent(Note*2). However, the SSAIP only registered an increase of 4.2 per cent and 0.3 per cent respectively during the period and thereafter has been on the decline. The actual prices, as measured by the SSAIP, fell by 2.7 per cent in 1999-2000, 1.9 per cent in 2000-01 and 0.5 per cent in 2001-02. The SSA payment rates have however remained frozen since 1999-2000.(Note*3)
The combined effect of the upward adjustment up to 1998-99 based on forecast price increases and the continued deflation since then is an over-adjustment to the SSA payment rates of 12.4 per cent up to the end of March 2002.(Note*4) In other words, there is room for an 11.1 per cent downward adjustment without affecting the originally intended purchasing power of the DA rates.
In July 2002, we informed the Finance Committee of the Legislative Council that for both policy and fiscal reasons, we would like to take stock of the situation and gauge the public's views on the adjustment of the CSSA and SSA rates. In the meantime, the CSSA and SSA rates would remain frozen until March 2003. As with the CSSA rates, we have not made any decision on the DA rates yet.
Note:
*1 The SSAIP measures inflation according to the expenditure pattern of households receiving Comprehensive Social Security Assistance (CSSA). The SSAIP consists of the same items as the Consumer Price Index, except for items which are covered by special grants under the CSSA Scheme (e.g. rent). The SSAIP is compiled by the Census and Statistics Department monthly. In order to ensure that up-to-date expenditure patterns of CSSA households are accurately reflected in the compilation of the SSAIP, it is an established practice to rebase the SSAIP once every five years based on the data from the Household Expenditure Survey on CSSA Households. The SSAIP presented in this reply refers to the 1999-2000-based series.
*2 The percentage is calculated as follows: 1.065 x 1.048-1.
*3 In July 1999, we informed the Finance Committee of the Legislative Council that the past practice of adjusting the standard payment rates according to the forecast inflation for the following year would discontinue. Instead, inflationary adjustments to the CSSA and SSA standard payment rates will be based on actual price movements in the previous year
*4 The percentage is calculated as follows: 1.116/(1.042 x 1.003 x (1-0.027) x (1-0.019) x (1-0.005)) -1.
End/Wednesday, December 18, 2002
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