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  • Aug 21, 2014
  • Updated: 1:34am

Old age allowance

Commonly known as "fruit money", the old age allowance is a monthly cash subsidy the Hong Kong government pays to senior citizens aged 65-69 with low incomes, and all elderly citizens aged 70 and over. The Leung Chun-ying administration in 2012 proposed to introduce a new means-tested subsidy called the Old Age Living Allowance, which provides HK$2,200 per month for the needy only. 

CommentInsight & Opinion

Hong Kong government's agenda to help the poor deserves support

Bernard Chan welcomes the raft of measures for the grass roots but says the government must also convince people it is being prudent

PUBLISHED : Friday, 19 October, 2012, 12:00am
UPDATED : Friday, 19 October, 2012, 2:12am

Newspapers looking at the first 100 days of the Leung Chun-ying administration focused on controversies. Yet they could have seen a different pattern: the new government announced an imaginative project to improve conditions for elderly and disabled pedestrians, a New Territories development plan to deliver more public housing and a proposal for an old-age living allowance for the elderly poor worth HK$2,200 a month.

They did all attract criticism. But another theme running through them is perhaps more important: all are aimed at improving the lives of the grass roots.

For anyone who cares about the growing wealth gap and the plight of the disadvantaged, this is an impressive record of new policies for 100 days.

It is not unreasonable to assume this will continue. More measures to make Hong Kong a fairer society are likely to be on the way. Many people think such a change in approach is long overdue. They believe the time has come to tackle the shame of old people scrounging in waste bins or living in cage homes. But many others - including middle-class taxpayers - will wonder whether we can afford it.

In Europe and the US, politicians' past promises are coming home to roost. In some countries, pension and health-care spending commitments are outstripping taxpayers' ability to pay. And with global economic uncertainty and signs of a local slowdown, this may not seem the best time for Hong Kong to think about introducing new spending programmes.

The good news is that, unlike debt-ridden Western economies, Hong Kong has plentiful public resources and a tradition of controlling recurrent spending. The bad news is that even an affordable new spending programme can potentially become bloated.

The government needs to assure today's younger taxpayers that it is being prudent for the long term as well as fair to the poor. The key is obvious: focus resources where they are needed.

Few people oppose the idea of giving the elderly poor a higher allowance to improve their spending power. Opposition to the proposal comes from lawmakers who think the benefit should not be means tested or who think the means testing should be more generous than in the government plan.

Maybe the first group misunderstands the nature of the HK$1,090 old age allowance, or "fruit money". It is a discretionary income supplement for the 65-69 age bracket, but universal from 70 up. Even tycoons are eligible. The new allowance is a means-tested supplement for all those over 65. The fruit money recipients aged 65-69 will automatically switch over to it. Applicants aged 70-plus will be subject to a simple, fair and dignified means test.

The second group are arguing over certain specifics. Should the allowance go to people with monthly incomes below HK$6,660 or a higher level? Some are asking for the asset limit of HK$186,000 to be relaxed. But they could debate this all day.

Members of both groups have said they might vote against the proposed allowance next Friday.

I can't believe they will do that. This is a 14 per cent boost for the whole welfare budget. Hundreds of thousands of poor elderly people will gain.

What will constituents think if lawmakers prefer instead to give HK$1,100 income supplements, on top of fruit money, to the middle class and even tycoons?

Bernard Chan is a member of the Executive Council

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