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Financial Assistance payments hit $50m

Financial Assistance will have dealt out an “unprecedented” $50 million to roughly 2,680 residents in need by the close of the current fiscal year, according to Community Minister Wayne Scott.

The number of Bermudians depending on Government's help is likely to pass the 3,000 mark in the year ahead.

Mr Scott told MPs that the Department's spending of $11 to $12 million per quarter was “unsustainable”, and that the trend of reduced allowances would continue in the coming year.

“It would be prudent to ask us all to accept that the days of overspending are gone,” he said.

“We cannot continue to want what we do not absolutely need, and we cannot fool ourselves into thinking that if you can't afford it, Government can.”

Mr Scott said he would bring a new schedule of allowable expenses for Financial Assistance clients “in the very near future”.

“We intend to continue to help people in need — but, at the same time. we have to strive to lessen the burden on the taxpayers as a whole.”

The Minister said the Department would have to “nudge people off financial assistance and make them more accountable for financial management of their affairs”.

Financial Assistance's budget has increased by 19 percent, to just under $47 million, for the coming financial year.

Giving an overview of the Department's growth, Mr Scott said spending had “dramatically” grown since its $16 million allocation in 2005/06

“During 2005/07 the average number of persons on financial assistance was about 680,” he said.

“At that time, seniors and persons with disabilities accounted for approximately 75 percent of the overall Financial Assistance client base.”

But the 2007 closure of the indigent clinic brought in an estimated 400 extra clients — and the October 2008 launch of child day care allowance “increased expenditures by $3.4 million and the average number of persons on assistance to around 1,360 — a 25 percent increase”, he said.

“In 2009, there was an increase in health insurance premiums due to launch of FutureCare. This caused the average number of persons on assistance to rise to almost 1,500 persons and the total expenditures approached $32 million per year.”

With the economic recession, numbers swelled to 1,575 in 2010/11, he said — climbing to 2,200 the next year.

In the current fiscal year, Financial Assistance reached “unprecedented levels”, Mr Scott said.

“Seniors and persons with disabilities now account for some 59 percent of the overall client base, whilst the numbers of able-bodied persons and persons with low earnings account for over 40 percent of all persons on Financial Assistance.”

The current level of spending will stay high in the fiscal year coming — even with cost-cutting measures taken into account.

“The fact remains that more people than ever before are applying for and receiving Financial Assistance benefits,” Mr Scott told the House of Assembly, saying his Ministry was “constantly having to play catch-up” — and would have to seek supplementary funds during this Budget just to meet the current demand.

“This number far exceeds the amount of cases in terms of best practice for similar agencies. Given the trend of increasing numbers of persons applying, it would not be surprising to see the average number of persons on Financial Assistance exceed 3,000 in 2014/15. This number of clients would mean an average caseload of 250 per worker, and would be unacceptable and unsustainable.”

There are 773 seniors being assisted, roughly 163 of whom are in nursing homes and 103 of which are sheltered by the Bermuda Housing Trust.

“The Department also pays for FutureCare Insurance for all senior clients,” he said. “Currently, this rate is $440 monthly, and tends to increase yearly.”

He added: “Due to the continued economic climate, it has been noted that the categories of able-bodied unemployed and earnings low persons, have more than doubled over this last year and tripled over the last two to four years. This equates to a payout of over $1.5 million, monthly — just for these two categories of clients. We are seeing, for the first time, people who have been out of work for two to three years, as their nest eggs are now depleted.”

Rent is one of the top items, topping $1.35 million a month.

Mr Scott asked for the public to take the “entirely unsustainable” payouts into account.

Investigators for the Department have so far recouped $85,000 over the past ten months — and the launch of the Abuse Hotline in January has resulted in 38 calls. Three were unsubstantiated; three were in reference to former clients; five were for general complaints or comments made by the public, and nine related to ongoing investigations. Eighteen have been substantiated.

Community Minister Wayne Scott

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Published March 15, 2014 at 9:00 am (Updated March 15, 2014 at 1:21 am)

Financial Assistance payments hit $50m

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