The Cayman Islands government is plugging an additional $2 million into the poor relief budget this year, fearing the current funding provided for some of the public welfare efforts will run out by next month if more money is not provided.

On Tuesday, members of the Legislative Assembly’s Finance Committee agreed to increase the budget for poor relief vouchers by some $1.35 million to cover the last five months of 2018. The vouchers for things like food purchases are granted on both a temporary and permanent basis depending on the evaluation of the recipient’s situation done by government’s Needs Assessment Unit.

Rental assistance for the needy was also increased by some $1.3 million to provide monthly housing.

Funds were taken away in other areas of the poor relief budget to compensate for the increases, but the total amount on increased spending came to about $2 million more than government first planned to pay.

The increase in poor relief payments and rental assistance has taken the Progressives-led coalition government somewhat by surprise, in light of recent economic forecasts in Cayman.

“There’s no question that the economic situation continues to improve … it’s vastly improved from three to four years ago,” Premier Alden McLaughlin said Tuesday. “Yet the number of applications for assistance … continue to increase year on year.

“There is clearly cause for concern.”

Mr. McLaughlin said a number of factors could be at play in the poor relief payments increase. The first, and perhaps most significant issue, is the retirement of an aging Caymanian workforce that may have earned little to no retirement income.

“They are creating a significant demand on the service for [rental] assistance as they lose their regular income and the pensions that they had …. are grossly inadequate to assist.”

Last week, the premier said he was “scared” about what could happen in the next 10 to 15 years as a large number of older Caymanians retire who have not seen the full benefit of the private sector retirement system because they only joined it for 10-20 years. Cayman’s first private sector retirement scheme began in 1998 and has long been considered inadequate to fund a lengthy retirement period.

While overall unemployment has hovered between 4.1 and 4.9 percent over the past few years, Caymanian unemployment has remained stubbornly high – going above 7 percent during the last reporting period.

In addition to the unemployed, Mr. McLaughlin said a number of local workers appear to remain “underemployed” – not working a minimum of 37.5 hours per week.

“If you believe the statistics … there is some significant underemployment,” the premier said. “All of these things are putting additional pressures on the rental aspect of it, in particular.”

The premier also floated the theory that with government earning operating surpluses over the last four years, the public may be aware that there is more cash available for economic assistance and are making an effort to apply for it.

“This too has encouraged people who would otherwise have said ‘it don’t make any sense to go, they nah ga help me,’” Mr. McLaughlin said.

Deputy Opposition Leader Alva Suckoo noted that many of the government’s requested spending increases in finance committee involved things like poor relief, rental assistance and additional money to pay the healthcare costs of indigent Caymanians.

“These are signs that all is not well,” Mr. Suckoo said Tuesday.

Cayman’s overall unemployment rate increased nearly a full percentage point between fall 2016 and fall 2017. The rate went from 4.2 percent in the latter half of 2016 to 4.9 percent during the same time for 2017. The overall rate encompasses jobless figures for both Caymanian and non-Caymanian residents and represents the portion of the total workforce that is actively seeking a job, but which has not attained employment.

The Caymanian unemployment rate also increased during the same period, but only marginally. According to the government Economics and Statistics Office Labour Force Surveys, 1,406 Caymanians were unemployed in fall 2016, while 1,515 Caymanians were unemployed in fall 2017. The Caymanian jobless rate was calculated at 7.1 percent (fall 2016) and 7.3 percent (fall 2017) during the same period.

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