A new report calls for a review of the $3,000 per month household income threshold for temporary public assistance. The Minimum Wage Advisory Committee says the rate is too high, given wage levels in Cayman.
The committee’s report, published last week, calls for an immediate review of the income threshold used by the Needs Assessment Unit, charged with giving public assistance. The report states the rate puts welfare recipients at a level earning $9.62 an hour, substantially more than the recommended $6 minimum wage.
Committee chair Lemuel Hurlston called the income level “too generous.”
“One has to look at capping costs,” he said, pointing to what he called “slightly contentious” budget debates over spending on public assistance. The government budget lists almost $1.5 million in funding for the Needs Assessment Unit, which oversees welfare payments.
The Needs Assessment Unit declined to comment and forwarded all questions to the Ministry of Home and Community Affairs. The ministry had not responded to Cayman Compass requests for comment by press time Monday.
The unit’s representatives told the Minimum Wage Advisory Committee that between June 2012 and Aug. 20, 2014, more than 1,100 people requested welfare benefits due to unemployment or inadequate income.
The committee report cites Anne Knowles with the International Labour Organization, as saying, “It was ‘important that social security benefits are not higher than minimum wage’ as this would obviously provide no incentives for persons to enter the workforce.”
People receiving assistance, Ms. Knowles said, would receive more money for staying unemployed than finding a minimum wage job.
With public assistance, a person’s annual salary would be about $20,000. At the proposed $6 minimum wage, the annual salary would be $12,480.
The International Labour Organization acted as the technical adviser to the wage committee and produced the statistical analysis free of charge.
Needs Assessment Unit staff told the committee that over the past five years they have seen more people in their 40s and 50s unemployed due to health issues such as diabetes and heart problems. They also said there were more people in their 50s who say they can’t find a job because of their age, and more people whose income is not enough to cover basic living expenses like food, rent and medical expenses.
The unit’s representatives said the lack of a national unemployment benefits program forces people to apply for welfare programs.
The Needs Assessment Unit gave the committee almost 26 months of data on people who applied for benefits due to unemployment. Of the 415 unemployed people who applied for benefits, 65 percent were women. Almost half were 30 to 49 years old.
An additional 676 people, according to the report, applied for benefits because their salary did not cover basic expenses. Almost 400 of those people said their income was inadequate because of either low wages, a cut in hours, or a lack of skills. Most of that group, 65 percent, was in the 30 to 49 age range.
The Needs Assessment Unit made three recommendations to the minimum wage committee: make work training mandatory for healthy people receiving government assistance, create a national unemployment program, and require welfare recipients to volunteer in the community.