MORE struggling low-income families will knock on the doors of the Chinese Development Assistance Council (CDAC) this year compared to last year, and it is prepared to go into the red to meet their needs.

To meet this surge in aid requests from recession-hit Chinese Singaporeans, the CDAC is projecting a $4 million deficit for this year's budget.

The self-help group will dig into past surpluses, as well as investment income from its endowment fund, to finance the deficit, council chairman and Minister in the Prime Minister's Office Lim Swee Say said yesterday.

While this will be the second straight year that it is incurring a deficit, he stressed that the CDAC will rein in costs next year by streamlining programmes.

He spoke to reporters after the group's annual general meeting. It approved a $23.2 million budget for this year - $3.2 million more than for last year.

This is in anticipation of providing assistance to at least 64,000 needy Chinese Singaporeans and permanent residents, up from 55,000 last year.

The money will go towards a raft of schemes for students, workers and families. These include increased tuition subsidies and bursaries for children in low-income households, and doing more to help retrenched workers upgrade their skills.

The CDAC started ramping up its spending two years ago, when low- income households started to feel the pinch of global inflation.

It was in the red by $3 million last year. This year's $4 million deficit is 'unprecedented and not likely to be sustainable over the longer term', said Mr Lim.

Read the full story in Tuesday's edition of The Straits Times.