Hong Kong plans to set its first official poverty line in 2013. The threshold will be decided by a panel of experts at the Commission on Poverty but is expected to be set at half of the median household income.
Income the key factor in setting poverty line
Income is the most common measurement for poverty worldwide, although it is used in different ways to reach a definition.
The Organisation for Economic Co-operation and Development and the Hong Kong Council of Social Service both use a level of half or less than half of the median household income to define poverty.
Globally, this benchmark ranges from 40 to 70 per cent. In the European Union people falling below 60 per cent of median income are said to be "at risk of poverty".
The council's chief officer for policy research and advocacy, Mariana Chan Wai-yung, said the poverty rate of Hong Kong's elderly at 32.6 per cent - set out in a report by the non-government organisation yesterday - was close to double that of the general population's 17.1 per cent and a good indication of the reality.
"Compared to the whole world, Hong Kong's elderly poverty rate is still high," she said.
The council's business director, Chua Hoi-wai, pointed to a census report indicating that most Hong Kong elderly had assets ranging from tens of thousands of dollars to a few hundred thousand - not enough to support a decade of retirement.
"It is actually very important for elderly people to have a regular income," Chua said.
Many older people were reluctant to spend freely as they did not know how long they would have to make the money last and whether inflation would reduce the size of their pot. This was why a basic universal pension was necessary, the council said.
Many assets held by elderly - such as the flats they lived in or heirlooms like a gold bracelet - could not be disposed of.
To further measure policy, Chan said, the council had also done a study on people's expenditure and deprivation, using as criteria the ability to afford 30 daily necessities such as dental care, transport and breakfast. Results indicated that Hong Kong's elderly were much more deprived and had much less spending money than the rest of the population.
Radical lawmakers organised weeks of filibustering this year to block passage of Financial Secretary John Tsang Chun-wah's budget bill. One of their demands was for consultation on a universal pension scheme.
Secretary for Labour and Welfare Matthew Cheung Kin-chung indicated that a public consultation might be held next year.