Wage committee says welfare rate too generous

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. 



  1. So if I understand this article correctly, if someone is unemployed due to "health issues" and or they are just unemployed because they cannot find work that pays enough to cover their basic expenses; they are eligible to receive up to $3,000 per month from the government? If this is the case, where is the incentive for those individuals to become gainfully employed given the fact that if they do find a job they are likely to earn less than the $3k per month and have to work full time? It is no wonder that many of these individuals are reluctant to work in industries such as tourism or diving – these jobs don”t pay enough to exceed the unemployment wage.
    In addition, since when did diabetes become a medical issue that prohibits one from working? Albeit there are probably the extreme few that have diabetes combined with other health issues, but in general diabetes is treated through proper diet, excercise and insulin and most individuals with diabetes are perfectly fine to work. The government needs to stop encouraging unemployment. Make the unemployment compensation less than minimum wage and see how quickly people start jumping at the opportunity to work.

    ***Editor’s Note: Note: the welfare threshold for an adult is $20,000 a year, and for a family it is $36,000 a year, according to the report.***

  2. 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.

    On reading this article, I have to wonder whether I’m now living in the Cayman Islands…or the United Kingdom.

    This all sounds eerily like David Cameron’s policies being transferred to the Cayman Islands.

    Cayman is slowing but surely slipping into a "benefits culture" mode of society and that could spell long-term disaster for the people and economy of Cayman, as it has for Britain.

    It will take a much more comprehensive study on the entire situation to cover all the variables and…

    As of now, there is no indication of any intention on the part of the Govt…and privates sector to do that.

    Some of those variables include issues mentioned in this article…an aging workforce, lack of any type of national insurance for unemployed or retired people, the lack of enforcement in the pension scheme and health insurance programs that do exit…and that great white elephant in the room that no one wishes to see or talk about…

    The percentage of Cayman’s work-force that is transitory…the "work-permit" population, if you like.

    Creating a "benefits culture" to address one area while leaving the others out of the equation will only compound the situation.

    We have the United Kingdom as a prime example of that.

  3. It seem one can make quite a living on Welfare nowadays, why would anyone take a jobs for 6 Dollars an hour when you can sit on your but and collect 36,000 a year. Just to put it in perspective, that about 4 times the Welfare cap that exists in the US.

  4. 20,000 KYD a year for a single person won”t allow too many steak and lobster dinners.

    On the other hand it is equal to 390 KYD per week (52 week year) or about 9.60 KYD per hour (40 hour week).

    Why would anyone bother to break a sweat working for anything less than, say, 12 KYD an hour when you have to get to work by car or bus etc.

    Plus of course being unemployed does give a lot of free time for other profitable activities if one is so inclined.

    We must avoid the benefits culture of the UK and Europe. The only way we will be able to afford it is with greatly increased taxation of those who DO work.

  5. If people want assistance they should be required to contribute. Workfare would be much better then welfare, if you go and ask for help and you’re able bodied you’re given a job at minimum wage, whatever it may be. If you don’t want that job you can always try to find one on your own or take it put food on the table until you do. Point being nothing should be for free, people who collect welfare think it’s free money but the fact fact it that everyone one else is paying for it.

    With people make 20-36K a year on welfare, every beach road and park in Cayman should be spotless day in and day out.

    What type of twisted world do we live in where people get paid more to stay at home than what the government considers a minimum required wage to live on. In a nutshell what they are saying is that people on Welfare are entitled to more than those who are willing to work and it’s those that are willing to work who are footing the bill.