The increase in the standard rate may cause an increase in the number of fraudulent cases, but the sharp increase in the number of CSSA cases cannot possibly be explained by fraud. Fraudulent cases could only account for a very small portion of the increase. There is no reason to believe that social workers suddenly worked very much harder in 1993, the year when the number of CSSA cases took off. We can only conclude that the rapid increase in the number of CSSA cases is a response to the large increase in the CSSA payment after 1993. CSSA recipients respond to economic incentives just like everybody else.
Several proposals are worth considering.
Experience indicates that when the average CSSA payment was around 80 percent of the median wage in the late 1980s, the take-up rate was stable. However, when the payment was increased to above 100 percent of the median wage, there was a sharp increase in the take-up rate. Total payment and take-up rate are empirically related. To stabilize the take-up rate at a manageable level, CSSA payment should be linked to the median wage at, say, the 80 percent level. This amount exceeds the current CSSA asset limit for a single person.