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~ Collectivité owes CAF 1.3M euros per month for RSA benefit ~

MARIGOT--The Laws Commission verbally approved reform of the social benefit Revenu Solidarité Active (RSA) presented by the Overseas Ministry for St. Martin in the National Assembly on July 17 and written confirmation should be received from Parliament in due course, Second Vice-President Ramona Connor said Wednesday.

With President François Hollande endorsing its reform during his official visit here in May, the Collectivité is already proceeding with adapting RSA to the fiscal revenues of the Collectivité and modifying the criteria to apply for it.

As it stands, RSA is based on fiscal law and revenues of France but the Collectivité argues it cannot realistically apply figures used in France for St. Martin.

The objective is to reduce the staggeringly high amount the Collectivité has to pay out monthly for this social benefit and to prevent benefit cheats from getting what they are not entitled to.

RSA was voted into law in 2011 as a revised benefit, combining the former RMI (minimum wage), an allowance for single parents and unemployment benefit. For those who are eligible for RSA, the benefit is paid out monthly by Caisse d'Allocation Familiale (CAF) and in turn is reimbursed to CAF, or is supposed to be, by the Collectivité.

Therein lies the problem: the Collectivité is unable to pay the mounting debt, at least not in its entirety and is permanently in arrears. Since obtaining financial autonomy in 2007 it is the Collectivité, not the State that has to pay out RSA.

RSA currently cost the Collectivité 16-million-euros per year, roughly 60 per cent of its operating budget and that figure will easily rise to 17-million in 2016, Connor predicts. On July 7, 2015, CAF billed the Collectivité for 8M, 234,154 euros for the months of January 2015 through June 2015.

There are two levels of RSA: RSA "socle" relates to persons who have no income at all and RSA "activité" for persons who have some part-time income.

Aside from imposing penalties on the Collectivité for late payments it's not certain how CAF views this state of affairs. From Connor's point of view the Collectivité is at least paying something back to CAF every month and has cleared the old debt from the previous administration.

"When the new government was installed in 2012 we were confronted with the bill from 2011 which the former party had not paid a cent towards," rued Connor. "Since then we are still trying to catch up. But it's not a question of the Collectivité not wanting to pay."

If RSA is the Collectivité's "bête noir" it is Ramona Connor who has taken on the challenge of fighting the beast. It was Connor who alerted the Territorial Council that something was very wrong with the RSA back in December 2012 when in 2011 the cost of RSA rose to 10M 246,716 euros compared to 4M, 643,750 in 2010, a jump of 120.65 per cent. Coincidentally, 2011 was the year RSA was introduced.

She travelled to Paris in 2013 to discuss the matter with the then Minister of Overseas Territories and went back again in 2014 when a new Minister was installed to reiterate the system needed to be changed urgently.

"In 2013 we had an audit done on the RSA situation and on April 7, 2015, an inspection was done by Inspection Générale des Affaires Sociales (IGAS)," she explained. "I told the inspectors why we had to change the system. On June 26, 2014, the Territorial Council voted in favour of asking the State to modify the foundation of the RSA in St. Martin since we are allowed in Article 74 to adopt the national laws to suit our situation. That's where we are today."

Also in April, 2014, an urgent motion passed in the Territorial Council to impose a controversial 30 per cent tax on the RSA, to reduce monthly payments, but to date there has been no answer on this from the State. In some quarters its legality was questioned.

With less than 3,500 beneficiaries of RSA it's hard to fathom how the cost of RSA can be more than a million euros each month. But as Connor points out the allowances are combined and can easily add up when a single parent is involved with three to four children to support, or two parents without jobs and children to support.

"There are some cases where a beneficiary can be drawing more than 2,000 euros a month and making more than someone who has a salaried job, working every day, paying tax and paying bills," Connor says. "It's clear something is wrong with the system. And it doesn't encourage those beneficiaries to look for a real job."

Connor adds although there is still much to do she is satisfied tightening up of controls to combat fraud is bearing fruit and fraudsters that have been caught recently have had to pay back money to the Collectivité, in some cases in "big amounts."

"We are zooming in on them and getting better organised all the time," she states. "People have to be aware they are signing a truthful declaration and should be prepared to pay the consequences if they are found to have made false statements on the form."

Nevertheless, advantages of the Treaty of Concordia notwithstanding, the fact the island has a porous border and more than 100 different nationalities, it remains difficult to nail down RSA fraud completely without cooperation from the Dutch side.

"With the existing international agreement on combating fraud between the islands in place, we are putting a group in place locally so that we can exchange information and figures," Connor continued. "It's in discussion with the Dutch side as part of joint cooperation."

She added types of fraud included different families using the same address. There are also situations of people living abroad and still drawing RSA.

"We do need to have a working relationship with the services on the Dutch side. We have observed that someone can be married on the Dutch side and single on the French side. Without any kind of working link between the two systems, we are being played. Someone can be working on one side and unemployed on the other side. It's crazy but it's the reality today. I'm not saying that we are being fooled but if we don't work together we will be fooled. As long as there are loopholes they will continue to be exploited."