With Financial Assistance costing Bermuda’s taxpayers roughly $1 million a week, or more than $50 million a year, Minister of Social Development and Sports, Zane DeSilva asserted today that the burden on the public purse is not sustainable. 

Speaking at a news conference this morning on the Throne Speech initiatives that fall under his Minister, he said, now more than ever, in an ageing community, Financial Assistance Reform is a necessary reality.

On the overall reform plan, he said: “The current system does not effectively serve either the clients or the Government,” although it “serves some of the most vulnerable in our society”. But he said: “Unfortunately, over time there has developed an over-reliance – and some may even say a culture of entitlement – among too many of those who receive financial assistance.

Graphic Courtesy of DCI

“It is well recognised that the current expenditure of over $50 million per year the Government spends on financial assistance is unsustainable. It can’t continue,” said the Minister.

As a result, he said changes are coming down the pike for able-bodied persons who are unemployed and on financial assistance. The upcoming review will require them “to upgrade their education and skills to facilitate their return to the workforce”. But he said reform is also needed to remove some of the punitive aspects of the system.

“Financial Assistance should encourage people to find work; therefore, people who take a part-time position will not find themselves penalised,” said Mr DeSilva. “This Government will reform Financial Assistance to reduce abuse, discourage dependence, and ensure that work pays.”

He noted that the programme started over 15 years ago, by way of the Financial Assistance Act 2001, “to ensure that individuals with insufficient financial resources have access to services in order to gain, maintain, or regain a minimum standard of living while encouraging personal and economic independence”. It was also created “to encourage the development of personal skills and resources so they didn’t have to rely on Financial Assistance”.

While noting that the programme “has proven to be a lifeline for many in our community,” he said: “Unfortunately, over time, there has developed an over-reliance, some say even a culture of entitlement, amongst too many of those who receive financial assistance.

“Some persons remain on financial assistance for long periods of time, and this is certainly not what the Programme was designed for. At the same time, there is evidence that the way financial assistance is structured unfairly penalizes persons who have part-time jobs, since they find themselves unable to sustain their progress towards financial independence.

“We will examine that situation carefully and seek to make adjustments to policy and legislation so as to encourage people to wean off financial assistance, not to remain on it forever,” he said. Moving forward, the upcoming reform plan will include both policy and legislation.

In addition to updating requirements for able-bodied persons “to upgrade their education and skills to facilitate their return to the workforce,” he said: “We will also reach out to Corporate Bermuda to encourage funding support, together with Government, so that able-bodied persons… can get their GED and make themselves more job ready.

“This will require a sincere collaborative effort between business and Government, since it is well recognized that the current expenditure of over $50 million that Government spends on financial assistance is unsustainable. That’s almost $1 million dollar per week,” he said.

The bottom line, in his view, is that for a small country like Bermuda, with an ageing community, $1 million a week is not sustainable. And the problem is compounded by the fact that more seniors reach the age of 65 every year. Seniors, coupled with the disabled, form the largest group receiving financial assistance in Bermuda.

Asked by Bermuda Real to respond to criticism that questions whether a multi-millionaire can relate to the struggles of people in need of assistance, Mr DeSilva jokingly asked how do we know he’s a multi-millionaire. But on a serious note, he recalled the struggles of his family while growing up in Dockyard, in an area commonly referred to as ‘Clock Block’.

Said Mr DeSilva: “I’ve slept on the floor and I know what it is to work day and night.” He recalled the days of having to use ‘out houses’, or go outside to use the bathroom. And at one point he said, his wife also knows what it’s like to struggle because many times, she slept on the floor with him. Struggling to survive in life he said, is something that never leaves you, no matter where or how far you go in life.

Other initiatives discussed by the Minister today, included proposed amendments to the Children Act 1998, the need to produce a green paper to examine Bermuda’s drug policies, and using Government’s financial influence to assist sports and community clubs to become self-sufficient through loan guarantees.