Old age allowance

Welfare test faces hurdle in Legco

Lawmakers set to vote down government's cap on old age allowance

PUBLISHED : Wednesday, 10 October, 2012, 12:00am
UPDATED : Sunday, 14 October, 2012, 11:27am

The government faces an uphill battle to win enough votes in Legco for its proposed means test on the new subsidy for the elderly.

Secretary for Labour and Welfare Matthew Cheung Kin-chung said yesterday the government would not scrap the means test for the new Old Age Allowance, although it would simplify application procedures.

"I hope lawmakers can support the programme … We can review and improve the programme once we get it started," Cheung said. He stressed he had no back-up proposal if lawmakers insisted on voting it down when it is presented to the Finance Committee on October 26.

The means test for the allowance of HK$2,200 a month remained unchanged from the government's original plan for the new programme, which is capped at an asset value of HK$186,000 and a monthly income of HK$6,600 for anyone aged 65 or above, Cheung said yesterday.

Under the proposed system, elderly who apply for the HK$2,200 will have to give up the current "fruit money" allowance of HK$1,090 a month. Therefore, the increase will only be about HK$1,100.

Cheung insisted the new allowance was aimed at "easing poverty" and so a means test was justified. If the test were adopted, the allowance programme would cost the government HK$6.2 billion a year and benefit about 400,000 elderly, Cheung said. If the test is scrapped, the cost could blow out to HK$13.6 billion. "We must consider the financial burden if there is no means test," he said.

The government would review and adjust the allowance according to inflation, he said.

Of the 520,000 "fruit money" recipients, about 290,000 had already declared their assets and would automatically receive the new allowance next year, he said.

Cheung said that while the new programme was expected to be in place by March next year, the government would backdate it to the present time.

At least 15 pan-democrats including the Civic Party, Labour Party, People Power, League of Social Democrats and Association for Democracy and People's Livelihood will vote against the proposal unless the government agrees to their demands, including waiving the means test.

However, with more than half of the legislature undecided on the issue, it is unclear whether the proposal will be vetoed in Legco.

Those undecided include 12 pan-democrats from the Democratic Party , the NeoDemocrats' Gary Fan Kwok-wai, Neighbourhood and Workers Service Centre's Leung Yiu-chung, and independents Dr Joseph Lee Kok-long, Kenneth Leung Kai-cheong, Charles Mok and Ip Kin-yuen. At least 25 pro-establishment lawmakers are also undecided - 13 from the Democratic Alliance for the Betterment and Progress of Hong Kong, six from the Federation of Trade Unions, five from the Liberal Party, and independent Paul Tse Wai-chun.

Ip Kwok-him, of the DAB which has 13 votes, said there was "room for negotiation" with the government over the party's original proposal for a HK$300,000 asset value cap.

Ng Wai-tung, of the Society for Community Organisation, was disappointed with the means test. But he said the extra HK$1,000 under the new scheme would help improve the quality of life for many elderly people who needed the money for medicine. He said the government should launch a public consultation on a universal pension scheme before the problem of the ageing population worsened.

"Such a consultation could take two or three years," Ng said. "Chief Executive Leung Chun-ying should get started on this now or he may not have time to prepare a retirement plan during his five-year term. We don't want the whole issue coming to a halt due to a change of government then."