By NEIL HARTNELL
Tribune Business Editor
FEWER than one in four Bahamians receiving a National Insurance Board (NIB) non-contributory pension come from the poorest 20 per cent of society, an Inter-American Development Bank (IDB) report disclosing that plans to reform this and other social security programmes are likely to create "political fallout".
The report, which provides further details on a $10 million IDB-funded initiative to reform the Bahamas' social security system, also reveals that the existing welfare system's "fragmented" and dysfunctional nature means that just 42 per cent of Bahamians receiving food coupons are drawn from the poorest 20 per cent of society.
Explaining that these problems stemmed from the absence of "targeting" and a set criteria to determine who was entitled to welfare benefits, the IDB document said the project aimed to introduce Conditional Cash Transfers (CCTs) to the Bahamas by June 2013.
CCTs are welfare/benefit payments linked to their recipients meeting certain conditions in advance, such as ensuring their children regularly go to school and maintain healthy lifestyles.
Introducing such a system, though, together with improved benefit targeting and better plan administration/information will not be easy, though. The IDB report, a copy of which has been seen by Tribune Business, warns of the likely mounting political pressures on the Government that will result when many current welfare recipients no longer qualify to receive them under the new, tightened criteria.
Acknowledging that another risk was the Ministry of Labour and Social Development's "limited capacity" to implement a CCT programme, the IDB highlighted the "political fallout and sensitivities due to the exit of existing beneficiaries who will no longer be eligible for the CCT based on the use of an improved targeting system".
Loretta Butler-Turner, minister of state for social development, in a previous interview with Tribune Business said food coupons had sometimes been treated as a tradable commodity by both the recipients and some public officials, who sold them on to others for profit.
Apart from suspicions about nepotism and political favouritism playing a part in who receives food coupons, the Government has also had to contend with the so-called 'working poor' - persons earning good salaries, but who are so maxed out on salary deductions and leveraged up to the hilt, that they have little left every month for purchases such as food.
To counter the "political fallout" fears, the IDB is planning a public relations campaign to highlight to Bahamians the need for social security reform, as well as providing technical support to the Government during the design and operation of the CCT initiative.
Highlighting the need to eliminate wastage and potential benefit fraud, the IDB paper noted that just 24 per cent of NIB non-contributory pension recipients come from "the lowest 20 per cent of the population". Given that some $16 million was paid out in such benefits in 2010, the implication is that more than $12 million of this sum did not go to those who may need it most.
"NIB provides means tested non-contributory pensions and assistance benefits targeted to the elderly poor," the IDB report said. "In 2010, the NIB provided benefits to 5,455 elderly, with benefit expenditure equal to $16 million. The monthly benefit is $200 per month, per person, payable to needy persons over 65 who have not met the contributions requirements for a contributory pension."
Based on the IDB report's data, only 1,309 of those 5,455 non-contributory pension recipients came from the poorest 20 per cent of Bahamian society, raising some questions as to whether the remaining 4,146 should have gained that benefit.
The document also highlighted the devastating effects the recession has had on the most vulnerable elements in Bahamian society. In New Providence alone, some 4,800 Bahamians per month were receiving food coupons from the Ministry of Labour and Social Development during the 2010-2011 Budget year.
At the same time, some 2,700 schoolchildren on New Providence were receiving school uniform assistance, with another 1,500 students throughout the Bahamas receiving lunches through the same ministry.
"In fiscal year 2010/2011, the Ministry of Labour and Social Development disbursed $5.8 million on Food Coupons in New Providence, with approximately 4,800 beneficiaries per month," the IDB report disclosed.
"Benefits are equal to $80/per month for one person, and $20 for each additional person up to a maximum of $180/month. In that same year, Uniform Assistance was provided to approximately 2,700 children on New Providence at a cost of $0.3 million.
"The Ministry of Labour and Social Development National Lunch Programme provided lunches for approximately 1,500 students throughout the Bahamas at a cost of approximately $1 million in fiscal year 2010-2011. The Ministry of Labour and Social Development pays private caterers to deliver meals to poor students targeted for a free school lunch by the Ministry."
Pointing out that the Government had 10 benefit 'cash and in-kind' transfer programmes targeted at the same groups of Bahamians, the IDB said this approach led to "inefficiencies".
"Enrollment of beneficiaries of the Ministry's programmes is done through interviews, and applicants are required to complete various forms," the report said.
"In the absence of a targeting mechanism, there is no objective criteria to determine eligibility. According to the 2006 Household Expenditure Survey, only 42 per cent of beneficiaries of the Food Assistance programme, and 24 per cent of beneficiaries of the non-contributory pension, are in the lowest 20 per cent of the population."
Then there was the shoddy record-keeping. The IDB report said: "Most programme information is maintained manually, while summary data on beneficiaries and on the number of characteristics of household members, including their ages and gender, are not systematically collected.
"As a result, programme officials have difficulty accessing even basic programme information, including the number of program beneficiaries there are, or beneficiaries' geographic and demographic composition."
To reform the social security system, the $10 million IDB project is focusing on consolidating the existing 10 benefits into a CCT system, and "improved targeting" of NIB and government benefit recipients through a 'proxy means test' and single registry of all beneficiaries.
"The new CCT is expected to be phased in geographically, with enrollment of beneficiaries expected to start in early 2013, and transfers to the first group to begin in June 2013. Additional groups will be added until the old programmes disappear entirely," the IDB report said.
It added that the draft $10 million loan was set to be approved on May 9, 2012, with IDB Board approval targeted for June 13, 2012.
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