US$40 Million to Reform Social Safety Net

Cabinet has given approval for the Government to enter into a loan agreement with the World Bank for US$40 million, to effect far-reaching reform of the social safety net system, which is encompassed by the Programme of Advancement Through Health and Education (PATH).
This will be the second phase of the social safety net reform programme, and will involve improvement of the effectiveness of PATH; building capacity for welfare to work; improving the administration of the public sector pension system; building capacity for the completion of pension reform; and the development of the holistic social protection strategy.
Permanent Secretary in the Ministry of Information, Culture, Youth and Sport, Faith Innerarity, explained at the (Jan. 30) post-Cabinet press briefing that, “families that are beneficiaries will still be provided with grants, but there will be some differentials in terms of what is given.” This, she said, would be related to the transition from primary to secondary school, as there are a number of students who are unable to move on to the secondary level, because of financial issues.
Hence, at the Grade Seven level, PATH beneficiaries will be receiving a benefit that is 50 per cent higher than the normal core benefit provided under the programme. In addition, students who are moving on to Grade 10, will receive a benefit that is 75 per cent higher than the core benefit.
Mrs. Innerarity said that of importance were the gender-related difficulties that had been identified, with males at a severe disadvantage in terms of educational attainment. Consequently, there will be a further incentive for boys, who will get a higher grant to encourage them to remain in school. There will also be a one-off grant or bonus for students moving to tertiary institutions.
“Education is important in terms of social mobility, to move people out of poverty, but in order for this to be achieved, attaining a tertiary level education is of critical importance, hence the second phase of the social safety net reform is seeking to build on the earlier phase, to introduce new elements that would ensure, not just a short term poverty alleviation programme, but really lead toward the achievement of the longer term goals,” she explained. Meanwhile, the welfare to work aspect would be pushed, as there are a number of persons within the beneficiary household, who are in the economically active age group, who also need assistance, the Permanent Secretary said. “This assistance must be in a different form, in terms of the provision of employment.also students who benefit from PATH, in making that transition from school to work, need some support, and so the welfare to work programme, which is a new component, will be addressing this and will seek to build capacity in terms of assisting persons to make that transition,” Mrs. Innerarity told journalists.
The public sector reform programme will continue to ensure better administration of the various public sector pension schemes. In terms of the long term holistic strategy, the second phase of the safety net reform programme will look at the National Insurance Scheme (NIS).
“Currently, a large proportion of the work force is in the informal sector and not contributing to the social insurance scheme. Later these persons become a burden in terms of social assistance programmes, so a part of the reform is to strengthen the social insurance programme, by ensuring greater compliance and encouraging more persons in the informal sector to participate,” Mrs. Innerarity said.
The reform of the social safety net system was launched in 2000 and was fully implemented in 2002, with PATH being the main element. Mrs. Innerarity said PATH has recorded appreciable success in terms of encouraging poor families to send their children to school. This has been done through the provision of grants and their specific conditionalities which has been linked to PATH in terms of building human capital, mainly the school attendance and health checks for children, babies, and for pregnant and lactating women. Despite the success, she said, it has become necessary for PATH to be more effective, as there has been a number of supply side difficulties, linked to issues such as the cost and inadequacy of transportation, unemployment, the cost of school supply and a range of other factors.