Financial Assistance budget is overspent by $12.3m
Government has overspent its Financial Assistance budget this year by $12,315,000 due to the increased costs and growing client base, Families Minister
Glenn Blakeney told the House on Wednesday.
The Minister outlined measures taken to contain costs of the programme before asking for retroactive approval of the overspend.
Parliamentarians agreed to the request but not before the Opposition criticised Government for significant inaccuracies in their financial estimates.
Cost cutting measures included excluding property owning seniors from receiving financial assistance, providing for a three-month wait before unemployed persons could apply for Financial Assistance and imposing a one-year minimum residence requirement for Bermudians.
“Although these measures did help somewhat by reducing the numbers of persons eligible to receive financial assistance benefits at any given time, they were overshadowed somewhat by the rising costs associated with the provision of financial assistance benefits to seniors and person with disabilities.”
He said that over 75 percent of the clients were seniors and persons with disabilities.
“For fiscal year 201½012 to date, 106 new seniors and 152 new applicants who are persons with disabilities have been granted with financial assistance awards.”
The Minister said the bulk of the programme’s costs are associated with rest homes, health insurance, prescription medications and medical equipment and amounted to more than $20 million for the fiscal year so far.
Eligibility for the Child Day Care Allowance, also part of the Financial Assistance programme, was tightened by reducing the income threshold to $50,000 from $70,000, the Minister said.
But the “challenging economic conditions caused more persons than anticipated to apply for the child day care allowance benefit with the result that the costs were well in excess of the budgetary allocation of $2,500,000 for fiscal year 201½012.”
He said he expected costs to remain high due to Bermuda’s ageing population.
“This is not an area where significant budget cuts can be made since the social need is paramount. Government must continue to care for those citizens who through no fault of their own are unable to make ends meet,” he said.
“Consequently, Mr Chairman, a supplementary estimate of $12, 315,000 is required for fiscal year 201½012.”
The request was part of a package of over $70 million in supplementary estimates. About $18 million are considered “technical supplementaries”.
The One Bermuda Alliance’s
Donte Hunt noted that the request was the second highest of all the supplementaries and the highest percentage increase over its budget.
He questioned why the Ministry could not have predicted more accurately the financial requirements of the programme.
“There is a correlation between the state of the economy and social issues,” he said.
Mr Hunt noted that estimates of projected expenditure had declined over two years despite the declining economy.
“This year they budgeted some $25 million when the actual expenditure the year before was $34 million,” he continued.
“It makes no sense.”
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