Government decided to end its welfare insurance scheme after determining that only $33.8 million of about $60 million spent on the program reached beneficiaries through direct insurance payouts, Minister for Women, Children and Social Protection Sashi Kiran told Parliament last week.
Speaking on the cessation of the welfare insurance scheme, Ms Kiran said the figures showed the insurance model was an inefficient way of delivering assistance to vulnerable Fijians.
“Out of that $60 million, only $33.8 million actually reached our citizens as direct payouts,” she said.
Ms Kiran said in the 2023-2024 financial year, Government paid $7.1 million in insurance premiums while claims totalled $3.8 million.
In 2024-2025, premiums increased to $7.2 million, but claims again amounted to $3.8 million.
For the 2025-2026 financial year, she said $7.7 million was paid in premiums while only $3 million was paid out in claims.
“On average, a mere 56 percent of the total funds paid out by the government ended up in the hands of the beneficiaries,” Ms Kiran said.
“The remaining 44 percent did not serve our poor. Instead, it was absorbed by administrative friction, overheads and private corporate margins.”
She told Parliament no responsible government could regard the loss of 44 per cent of welfare funding through the delivery mechanism as economically sustainable.
“In macroeconomics, we call this a deadweight loss to our public finances,” she said.
Ms Kiran said Government had been spending about $7 million annually to provide insurance coverage for approximately 100,000 welfare recipients.
However, she said the insurance framework had processed an average of only about 5,000 claims annually over the past five years.
“We are paying massive premium blocks for a system where 95 percent of the covered population see no tangible touchpoint or benefit in any given year,” she said.
Ms Kiran said the figures demonstrated why Government could no longer justify continuing with the existing welfare insurance arrangement.
