Poverty alleviation:
Secretary for Labour & Welfare Matthew Cheung (right) and Director of Social Welfare Patrick Nip brief the media on the proposed old age living allowance details and implementation arrangements.
Poverty alleviation:
Secretary for Labour & Welfare Matthew Cheung (right) and Director of Social Welfare Patrick Nip brief the media on the proposed old age living allowance details and implementation arrangements.
New old age allowance targets needy
October 09, 2012
The aim of the Government’s proposed old age living allowance of $2,200 is to alleviate poverty and supplement needy seniors’ living expenses, Secretary for Labour & Welfare Matthew Cheung said today.
A simple declaration of income and assets that follows the eligibility criteria of normal old age allowance is required to distinguish those who are in need, Mr Cheung stressed at a press conference today in which he and Director of Social Welfare Patrick Nip disclosed the scheme’s details and implementation arrangements.
Applicants should be aged 65 or above and have been a Hong Kong resident for at least seven years. The monthly income limit for a single senior is $6,600, while the asset limit is $186,000. For a married couple, the monthly income limit is $10,520 while the asset limit is $281,000.
It is estimated that more than 400,000 people will receive the new allowance in the first year, Mr Cheung said. If it comes into retroactive effect on October 1, it will cost about $3.1 billion in 2012-13, or $6.2 billion for a full year. This would represent a 14% increase in the estimated recurrent Government expenditure on welfare, or a 2.3% increase in total expenditure, equal to 0.3% of the Gross Domestic Product, he added.
As the population ages, the allowance’s cost will rise incrementally each year, to about $6.4 billion in 2013-14, and to about $9.6 billion by 2022-23.
Mr Cheung said the Government is mindful that a rapidly ageing population poses challenges to the local welfare and medical systems, and Hong Kong will see a sharp increase in the elderly dependency ratio and economic dependency ratio. That is why an objective mechanism setting income and asset limits is necessary to identify people with a genuine need, to ensure limited resources are directed to helping them.
The Social Welfare Department has devised a set of simplified application procedures. Except those who report to the department that they have exceeded the relevant income or asset limits or opt not to switch to the new scheme, 290,000 elders - 215,000 former normal old age allowance recipients who are currently receiving higher old age allowance, and 75,000 existing normal old age allowance recipients - will be automatically converted to the new scheme, Mr Cheung said.
The department will credit the new allowance payment directly to their bank accounts in March 2013 at the earliest, without requiring them to make fresh applications.
The Government plans to seek Legislative Council Finance Committee approval on October 26.
Mr Nip said 100 posts will be created to cope with the scheme’s launch, costing $32 million.
