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.
More Hong Kong elderly live in poverty, study says
Gap between Hong Kong's haves and have-nots grows ever wider, with almost one third of elderly people facing daily struggle, says study
`While Hong Kong's rich get richer, the poor are still getting poorer, according to the findings of a new study.
Although the figure for those classed as living in poverty fell to 17.1 per cent of the population in 2011, the gap between haves and have-nots is widening.
The study by the Hong Kong Council of Social Service also reveals that the city has seen a rise in the number of elderly people living in poverty, with almost one in three struggling to make a living.
As Hong Kong does not have an official poverty line, the council sets the poverty level at half the median household income, which amounts to HK$3,500 for one person and HK$13,250 for a household of four.
Based on this criterion, in 2011 an estimated 1.15 million people were living in poverty - 55,000 fewer than in 2010.
But despite the drop in financial hardship, the income gap has widened. The median income of high-income households was 3.5 times that of low-income households, up from 3.1 times in 2001.
Council CEO Christine Fang Meng-sang announced the findings, which are based on government data. She believes the introduction of the minimum hourly wage of HK$28 in May last year helped reduce the poverty rate.
But she warned that even raising the minimum wage to HK$30 would not be enough to relieve poverty. The rate should be reviewed yearly to keep up with inflation, she said.
Fang said the most worrying phenomenon was worsening poverty among the elderly, which rose to 32.7 per cent of those aged 65 or older, from 32.5 per cent in 2010. This meant nearly 290,000 elderly people were in financial hardship.
Responding to the report yesterday, Chief Secretary Carrie Lam Cheng Yuet-ngor said the present government would set a poverty line for Hong Kong. The previous administration said the city did not need one.
"One of the functions of the Commission on Poverty to be set up is to set a credible poverty line with wide public consensus," she said.
The standard will be used for future poverty studies and to evaluate government poverty relief policies.
Lam acknowledged the problem of old people in poverty had got worse, and again urged lawmakers to support a proposed HK$2,200-a-month old age living allowance. She insisted a proposed means test for the allowance should not be scrapped. Executive Council convenor Lam Woon-kwong also defended the means testing. He said it was a simple matter and that the 290,000 recipients of the existing old age allowance who had declared their assets would automatically receive the new one.
Ho Hei- wah, the director of the Society for Community Organisation, said the means test would allow resources to be diverted to old people most in need.
People 65 and older applying for the proposed HK$2,200-a-month allowance would be eligible if their assets did not exceed HK$186,000 and their monthly income was HK$6,600 or less.
Although Fang supported the idea of a means test, she said HK$2,200 a month would not be enough to ease old-age poverty and suggested the asset limit of HK$186,000 should be raised.
"Simply doubling the 'fruit money' cannot ease poverty among the elderly. The amount should be more scientific and should match the basic living needs, which is at least HK$3,000," she said. The current old age allowance of HK$1,090 is called fruit money because it buys so little.
Fang believes Hong Kong should have a universal pension scheme. She also supported the introduction of an official poverty line to gauge the true level of need in the city.
Labour and Welfare Secretary Matthew Cheung Kin-chung reminded the elderly to honestly declare their assets and to consider the risks of transferring assets in order to be eligible for the allowance, as they might not be able to get them back.
Cheung had previously said he did not object to the practice of transferring assets.