Watson Institute for International and Public Affairs

Disbursing the GOJ Compassionate Grant: Observations and Imperatives

by Heather Ricketts, UWI Mona

May 19, 2020


In response to the devastating impact of the COVID-19 pandemic on the Jamaican economy and society, the Government of Jamaica (GOJ) announced a J$25 Billion rules-based stimulus COVID-19 Allocation of Resources for Employees (CARE) programme (1), the largest stimulus package in the country’s history. Some J$10 Billion have been specially allocated to individuals and businesses through a number of programmes, one of which is a $10,000 Compassionate Grant. It is an unconditional transfer that is “available to anyone in need (e.g. tertiary students, unemployed, informally employed, elderly, pensioners, etc.) …” It is therefore targeted at persons not currently on a payroll and includes household workers and construction workers in addition to the stated categories. The programme has had the largest take up of the CARE programme, as 401,314(2) persons applied within the one week application period of April 9-16. The verification process took place between April 24 and May 1, and resulted in the overwhelming majority of the applicants, 378,919, being deemed eligible. Payments commenced the following week.

The massive application of over 400,000 Jamaicans for the Compassionate Grant is hardly surprising. It suggests the significant level of hardship which COVID-19 has unleashed, compounding pre-COVID-19 vulnerability. Need is urgent! The number represents approximately 15 per cent of the population of approximately 2.7 Million and 30 per cent of the adult population. Jamaica’s poverty rate stands at 19.3 per cent according to the 2017 Survey of Living Conditions. Of the cadre of working persons in 2016, 12 per cent were in poverty (the working poor), and according to 2018 Labour Force data, 47 per cent were in informal employment.(3) Inequality levels are also moderate as seen by Gini coefficients of 0.3748 in 2017 and 0.4087 in 2013, and there is a substantial informal economy in which many workers operate almost as ‘hidden figures’ without any formal registration or state identification. An IDB study in 2006 estimated the informal sector to be as much about 40 per cent of GDP.(4) 

Of the applicants, 162,024 or 40 per cent gave a remittance agency as the preferred collection method. Such agencies are widely distributed throughout the country. Remittances are the country’s second largest foreign exchange earner and account for about 16 per cent of GDP. The remainder of applicants opted to be paid through a bank account. The disbursement process has not been without challenges. For the remittance agencies, it began with thousands converging on particular locations, as many defied the requests to collect on the specific date given and some who had not applied turned up with the expectation of being able to apply and receive the grant. Many too had no form of valid government identification such as a passport or voter’s identification and were therefore unable to collect. Additionally, collections were not being permitted by third party individuals. The remittance agencies had also made no arrangements for collections by older persons, persons with disabilities and pregnant and lactating women, resulting in much distress and discomfort, even fainting. Efforts to improve the collection experience came quickly, however, as the Government established a collection site at the National Arena, with tents for shade from the sun, seating and security. The experience by the users has been reported as smooth and comfortable.

The large numbers opting for collection through a remittance agency highlights the reality of a large ‘unbanked’ population. A 2011 study reported that 34 per cent of the adult population had no bank account, with the main reasons being not having enough money to make a bank account meaningful and not having some of the requirements needed to open an account, such as a Taxpayer Registration Number (TRN).(5) Additionally, data indicate that almost two-thirds of wage earners are paid in cash and not through a financial institution. With increasing requirements by banks to know their customers and the attendant stringent regulations, it has been quite an involved process to open an account. The high banking fees also serve as a disincentive to opening a bank account.

Since the debacle with the remittance agencies and the highlighting of the sizeable proportion of ‘unbanked’ individuals, two local banks have seized the opportunity and significantly relaxedtheir requirements for opening a savings account. Regularly, the requirements for a savings account include a minimum opening balance of $5,000, a valid government picture ID, a TRN, two references and a raft of documents to be completed included on source of funds. For recipients who chose to have the grant transferred directly to a bank account, some experienced challenges caused by the account being dormant or being that of a relative or friend and not  theirs. Third party payments are not being facilitated.

One very positive and reassuring aspect of the grant disbursement process is the importance being given to economic judiciousness. Before disbursement, the applications are put through a 10-step process for transparency and accountability, including verification by the Auditor General. The $10 Billion is being funded by taxpayers. Further, the Ministry of Finance and the Public Service, through which the Government’s CARE programme is being managed, has been particularly helpful in providing up to date information. The Minister himself is active and accessible on social media and Press briefings, answering questions directly, providing updates and doing some troubleshooting.

The lessons from the pay out of the Compassionate Grant include attention to logistics management, the need for greater work towards the goal of financial inclusion and the provision of universal social protection, the extent of the real and dire need in the country, and the issue of capacity limits. The latter is an important reminder of the fragility of the Jamaican economy. The budgetary considerations are substantial. Already, COVID-19 will cost the Jamaican government some $120 Billion, will result in a decline in GDP of 5.1 per cent and will set back the 60 per cent debt to GDP projections by two years from fiscal year 2025/26 to 2027/28. Jamaica quickly applied to the IMF for emergency financial assistance, and on May 15, 2020, the Executive Board approved a US$ 520 Million disbursement.(6) The heavy reliance of the economy on tourism and remittances also poses a high degree of susceptibility to external shocks. The pandemic has ground the entire tourism sector to a halt, with approximately 250,000 workers and affiliate operators affected. The diversification of the economy and the strengthening of sustainable agriculture seem obvious policy considerations.

Related to the issue of capacity limits, is the unconditional nature of the transfer. While the grant was set up to be self-targeting, meaning that persons who deemed themselves as not needing would not have bothered to apply, the short application window meant that those who had access to a computer and help with applying would have been the ‘early birds’. There is a substantial digital divide in Jamaica. A large number of persons never had the chance of applying and were caught off-guard when it was announced that applications would close within 24-hours. One may question whether the grant should not have been targeted in such a way as to deny persons who were not deemed to be in dire need such as persons currently receiving a pension and students not being financed through a student loan. Admittedly, such means-testing requires the establishment of an administrative framework and a scoring formula for the determination of eligibility and these take time to be implemented. The severity of COVID-19 meant that the government had to respond swiftly and so this was perhaps the best method under the circumstances. Further, for tertiary students, not all who are not beneficiaries of a loan are in any way financially stable. Many are financed through family sacrifice. The grant therefore would have been helpful in defraying some of the cost of internet connectivity, data plans and even technology related to move to online learning.

Regarding the logistical management of the disbursement of the grant, one wonders whether community institutions and structures such as churches, schools and community development councils could not have been coopted as distribution centres. This would have made it  easier and less expensive for beneficiaries, cutting out transportation and other costs and reducing the inconveniences to the elderly and other vulnerable individuals.

There is no question that financial inclusion is an urgent project. Although the Government introduced a National Financial Inclusion Strategy in 2016, with the vision for 2020 being “for Jamaica to achieve an inclusive financial system in which every adult and enterprise has access to, and is able to make full use of a range of adequate, quality, and affordable financial services”(7), the large percentage opting to be paid through a remittance agency gives some indication that achieving this vision is still a relatively far way off. Financial inclusion is critical to human wellbeing, and can facilitate the reduction of poverty and hunger and social and economic vulnerability. Ramping up efforts to improve financial knowledge and build economic resilience are therefore urgent imperatives, along with universal social protection to ensure coverage of the informally employed.

The COVID-19 crisis would be a terrible thing to waste!


1. https://jis.gov.jm/media/2020/04/CARE-Brochure-Ministry-of-Finance-2020.pdf

2. https://jis.gov.jm/more-than-500000-applications-for-covid-care-programme/

3. https://statinja.gov.jm/PublicationReleases.aspx. See the Labour Force Annual Review 2018

4. See IDB study report, The Informal Sector in Jamaica by Torero et al (2006).


5. See Financial Inclusion - Banking the Unbanked, Research Findings & Prospects for Mobile Financial Services.


6. https://www.imf.org/en/News/Articles/2020/05/15/pr20217-jamaica-imf-executive-board-approvesdisbursement-


7. See P.4, National Financial Inclusion Strategy: Access for All 2016-2020. National Financial Inclusion Council of

Jamaica. http://boj.org.jm/pdf/Jamaica_NFIS_Final_Draft.pdf