THE Government has ended a controversial social welfare insurance scheme after paying about $60 million in taxpayers’ money over eight years, with only $33.8 million reaching beneficiaries through direct claims.
Minister for Women, Children and Social Protection Sashi Kiran told Parliament last week that the decision to discontinue the scheme was fiscally responsible and necessary, arguing that too much public money was being absorbed by insurance costs rather than reaching vulnerable Fijians.
The scheme, introduced in 2018, was initially designed to increase insurance penetration among civil servants and social welfare recipients. Civil servants were later removed because of the high cost of maintaining their coverage.
Under the scheme, Government paid quarterly premiums for eligible welfare recipients, covering areas including term life, funeral expenses, personal accidents and fire.
But Ms Kiran said the numbers showed a significant mismatch between what Government paid and what beneficiaries received.
“Over the past eight years, the Government has diligently paid approximately $60 million in hard-earned taxpayers’ funds to FijiCare Insurance as premiums,” she said.
“However, a deeper dive into the metrics reveals a stark and troubling imbalance.”
Of the $60 million paid in premiums, only $33.8 million was paid out to citizens as direct claims.
In 2023-2024, Government paid $7.1 million in premiums but received claims payouts totalling only $3.8 million.
The following year, premiums increased to $7.2 million while payouts remained at $3.8 million.
In 2025-2026, premiums rose again to $7.7 million, but claims fell to $3 million.
Ms Kiran said the figures demonstrated that the insurance model was failing to deliver value for public money.
“On average, a mere 56 per cent of the total funds paid out by the Government ended up in the hands of the beneficiaries.
“The remaining 44 per cent did not serve our poor. Instead, it was absorbed by administrative friction, overheads and private corporate margins.”
$7m a year for limited claims
Ms Kiran said Government had been spending roughly $7 million annually to cover about 100,000 welfare recipients, yet only about 5000 claims were processed each year.
“We are paying massive premium blocks for a system where 95 per cent of the covered population see no tangible touchpoint or benefit in any given year.”
She argued that the scheme was particularly inefficient because most recipients did not directly benefit from the insurance during any given year.
Ms Kiran said the data also showed that the primary beneficiaries were often family members rather than elderly welfare recipients themselves.
The scheme provided one-off assistance for life and funeral costs, with payments ranging from $1500 for those under 60 to $500 for seniors aged between 60 and 69.
Fire and personal accident cover provided up to $3000.
However, Ms Kiran pointed to the extremely low number of personal accident claims as evidence of underutilisation.
“Personal accidents under this scheme are extremely rare.
“To highlight this, the entire 2022-2023 financial year, there were only four paid-out accident claims across the nation, costing a total of $10,500.”
Government promises safety-net alternatives
Ms Kiran rejected concerns that ending the insurance scheme would leave welfare recipients without protection.
“I want to assure this House that removing this insurance scheme will have minimal to no impact on the existing social welfare recipients.”
She said Government would continue providing direct assistance through six major social welfare programs.
For the 2026-2027 financial year, the Government has allocated $184 million across the programs.
This includes $46.46 million for the Family Assistance Scheme, more than $18 million for the Child Protection Allowance, more than $82 million for the Social Pension Scheme, over $420,000 for food allowance for rural pregnant mothers, more than $18 million for allowances for persons with disabilities and over $14 million for the Transport Assistance Scheme.
Ms Kiran said the Government believed direct assistance provided a more effective way of supporting vulnerable people than paying large insurance premiums.
“Fiji’s social safety net must be direct, impactful and efficient.
“Shifting away from this insurance model allows us to reallocate precious resources directly to those who need them the most.”
Other support remains available
Ms Kiran said Government agencies already provided assistance for several circumstances previously covered under the insurance scheme.
For accident-related injuries and disabilities, she pointed to assistance available through Government agencies and the Accident Compensation Commission of Fiji (ACCF).
“For citizens living with disabilities, our protection extends far beyond simple insurance payouts,” Ms Kiran said.
She said Government provided disability allowances, grants to organisations supporting persons with disabilities and funding for economic empowerment initiatives.
The Ministry of Housing also funded home retrofitting for people with disabilities.
Funeral assistance was available for people in State homes and those abandoned by their families, while health-related support was provided through the Ministry of Health.
Ms Kiran also highlighted fire assistance, with $75,000 budgeted under her ministry for immediate relief to fire victims and a further $200,000 under the Ministry of Housing for long-term fire reconstruction.
Public rental housing, free education and health services, and subsidised bus fares were also cited as components of Fiji’s broader social protection system.
“These allocations clearly indicate that across the whole of Government, we have more than sufficient safety nets in place, and we continue to build on these as we identify real gaps with the new schemes that may be needed,” she said.
Scheme to undergo review
Ms Kiran said the decision was ultimately about redirecting public funds towards programs with a clearer and more direct impact.
“The discontinuation of this scheme forms a central part of the Government’s ongoing efforts to streamline assistance programs, eliminate fiscal wastage, and avoid the duplication of services already funded through other targeted government initiatives,” she said.
The scheme has been suspended and will undergo a review focused on stronger governance, improved verification of beneficiaries and a coverage model based on actual demand.
Ms Kiran said the review would ensure future assistance was aligned with national priorities.
The Government’s challenge now will be to demonstrate that the money freed from the insurance scheme translates into stronger and more responsive support for the people the program was originally designed to protect.
