Despite claims that the recession is over, a steady flow of able-bodied applicants continue to seek financial assistance due to unemployment in Bermuda.
This from Minister of Community, Culture and Sport, Patricia Gordon-Pamplin, during the Budget debate on her Ministry.
Funding for financial assistance has increased by more than $5 million in the 2016/17 Budget, to the tune of $54,561,000, representing an 11 percent increase on the 2015/16 Budget.
“Although the higher overall number of clients are among seniors/pensioners (at 35 percent) and the disabled (at 32 percent); the higher number of applicants are able-bodied unemployed and earnings low persons,” said Ms Gordon-Pamplin.
“There continued to be a sustained demand for overall financial assistance in 2015/16. The total number of clients serviced has continued to increase, fluctuating monthly between 2,755 and 3,024.”
She attributed the overall increase in the number of applicants processed “to the shrinking of personal financial resources in our current economic climate, inability to find employment, job losses and redundancies”.
“Due to the economic climate, the categories of able-bodied unemployed and earnings low persons have more than doubled over the last two to four years. This equate to a monthly payout of over $1,057,000 just for these two categories of clients,” said the Minister.
She noted that “expenditure over the last several years has increased from $9.7mi per quarter in the first quarter of 2012/13 to over $12.5 for the third quarter of 2015/16”. The top four “high-ticket items for payout” listed:
1. Rental Accommodations
2. Rest and Nursing Home Fees
3. Insurance Premiums
The Minister also disclosed that since the Child Day Care Allowance Regulations 2008, $22.6mi has been paid out for the day care of 3,456 children by taxpayers.
“Most parents on the programme remain single; employed and with two children (or less) in a registered or licensed child day care environment,” said Ms Gordon-Pamplin.
But she said: “In order to remain within budgetary constraints, the Department of Financial Assistance may have to pare back the level of benefit.
“During 2015/16 the number of applicants for this programme resulted in over 300 families and 350 children benefiting. Another 40 applicants were found ineligible as a result of having incomes over the currently established income threshold of $55,000 per annum.”
Total monthly pay outs for this programme “ranged from $267,000 to $340,000” a month, “with an average monthly award of approximately $796 monthly, per child”. “Total allocated expenditure for 2016/17 is $3.4mi which remains consistent with the prior year,” the Minister said.
Like her predecessor Wayne Scott, who is now the Minister of Education, Ms Gordon-Pamplin warned that rising multi-million dollar quarterly payouts by Government is “unsustainable”.
“Spending for the first quarter of 2015/16 was unprecedented at approximately $12,696,000,” said Ms Gordon-Pamplin.
“This amount was approximately 25.8 percent of the allotted budget for 2015/16 and includes the payout for the Financial Assistance Programme, the Child Day Care Programme, institutional grant recipients, and overseas travel. It does not include administrative expenditure, including salaries, which would add an additional 2 percent, thereby taking this to 27 percent of the allotted budget for 2015/16.
She noted that spending for the second quarter was down slightly to $12,378,000. “When both quarters are combined, this showed current total expenditure was approximately 50.8 percent of the allotted budget for 2015/16, which was tracked to be 5 percent over projected expenditure for the first six months of 2015/16.
The bottom line on actual expenditure, including administrative costs as of the end of January this year was $44,7775,000.
The Minister concluded: “This is in line with the projection of $50mi to $52mi that was made at the beginning of the third quarter given the influx of new applicants and the continued increase of caseloads.
“The department continues to introduce policies to encourage clients to be more accountable, responsible, and focused on a new vision of self-reliance as a means to slowing down and ultimately stopping this unsustainable trend.”
*In part two of this report we will hear from the Minister’s parliamentary counterpart Shadow Minister Michael Weeks.
By Ceola Wilson