A proposal to cut welfare payments by 11.1 per cent was endorsed by the Executive Council yesterday, sources said. But a critic of the government's policy said the adjustment to the Comprehensive Social Security Assistance would make life even more difficult for about 260,000 poor families. For months now the government has proposed cutting payments in line with deflation over the past four years, which is up to 11.1 per cent. It will spend more than $16 billion in CSSA payments this financial year and estimates this will rise to $18 billion next year if nothing is done. The government froze payments in August until March. It is understood that the adjustment will not become effective until July in order to give time for families receiving the benefit to change their spending habits. The government has not decided if some recipients, particularly the elderly and people with disabilities or chronic illnesses, can have their payments reduced in phases. A spokesman for the Society for Community Organisation, Sze Lai-shan, said last night that it was a 'shame on the government' to target the most vulnerable group in society when trying to balance its books. 'Many families who receive the payout are very worried. The money given to them now will only be enough for their basic needs,' he said. 'It makes no difference even if the government allows some people to have their money cut bit by bit. At the end of the day, they will have less and less.' Sources said that senior officials would meet again tomorrow to discuss how the adjustment would be implemented. It is understood that the government has listed the CSSA as one of its priorities in tackling the budget deficit. Welfare payments account for about 7.8 per cent of government expenditure. The Social Welfare Department has presented statistics to show that the average payment for a family of four has reached $10,000 a month, which officials say is comparable or even better than the income of some families who are standing on their own feet. Last month the Secretary for Health, Welfare and Food, Yeoh Eng-kiong, warned that Hong Kong could no longer rely on existing tax revenue to sustain spending on CSSA payments. 'There has been a huge increase in the number of CSSA cases over the past five years so it is impossible to make a very generous payment out of the existing low tax rates and narrow tax base,' he said. The number of CSSA cases has increased by about 48 per cent since September 1997 - from 179,000 to more than 260,000.