The Housing Authority's Subsidised Housing Committee has agreed to phase out the pilot Rent Allowance for the Elderly Scheme in an orderly manner, without affecting its existing beneficiaries.

The department will stop accepting new applications with immediate effect. Existing beneficiaries, upon expiry of the current private leases, can opt between public rental housing units and cash rent allowances provided they still meet the eligibility criteria.

With the availability of adequate resources to cope with the elderly applicants' demand for self-contained small units, the committee is confident that its pledge of maintaining the average waiting time at two years for single elderly will not be affected in the absence of the scheme.

About 6,100 applicants are on the waiting list and the anticipated total production of small flats between 2003/04 and 2006/07 is over 15,000.

Committee chairman Ng Shui-lai assured that elderly applicants can be rehoused to public rental houses within a reasonably short period in the coming years.

In assessing the pilot scheme at today's meeting, members noted that the response to it has been lukewarm. Out of the total quota of 1,100 allowances in the two-year trial period, only about 620 were utilised.

Taking into account the tight financial position of the authority and the lukewarm response to the scheme, Mr Ng maintained the importance of looking at the cost-effectiveness of the scheme critically.

To keep pace with market trends and the space allocation of public rental houses, the committee also revised the maximum monthly rent allowance for 2003/04.

After the slightly downward adjustment, the allowance for one-person, two-person and three-person elderly households will be $1,750, $2,450 and $3,120 respectively.

The new rates of allowance only apply to extended cases, leases not yet due for expiry will not be affected.