A proposal to peg changes in welfare benefits to economic conditions would be pushed ahead with despite legislators' opposition, officials said yesterday.
Total spending on the Comprehensive Social Security Assistance scheme was so great that a small percentage difference in the adjustment involved a lot of money, Deputy Secretary for Health and Welfare Ho Wing-him told Legco's welfare panel.
'Society spends $20 billion on the scheme each year. A deviation of one per cent [in the level of adjustment] will cost about $170 million.' Under the present system, the standard payment rates of CSSA and the Social Security Allowance Scheme are adjusted in accordance with the inflation forecast for the coming year.
But the Director of Audit found that when the forecast was wrong, there was a significant impact on government expenditure.
As a result, the Government wants to make annual adjustments based on the actual movement of an index which measures inflation according to CSSA recipients' expenditure pattern.
Democrat Law Chi-kwong, representing the social welfare functional constituency, was worried the living standard of recipients might be affected during high inflation.