Court's landmark benefits ruling could cost taxpayers an extra HK$197m a year

Figure is based on minister's projection of an increase in CSSA applications of 7,000 a year

PUBLISHED : Friday, 04 April, 2014, 4:02am
UPDATED : Friday, 04 April, 2014, 5:10am

Taxpayers may be staring at an additional annual bill of up to HK$197 million if 7,000 more new immigrants per year apply for social security, the South China Morning Post has found.

The figure is based on Secretary for Labour and Welfare Matthew Cheung Kin-chung's first estimate of migrant applicant numbers since the top court's landmark ruling in favour of new immigrants in December.

It is a conservative projection, considering government lawyers told the Court of Final Appeal that there could be more than 60,000 new immigrants applying for Comprehensive Social Security Assistance.

"We will pay close attention to the overall development and make accurate estimates," Cheung told lawmakers at a meeting yesterday to scrutinise the 2014/15 budget.

On December 17, the court ruled the government had acted unconstitutionally by withholding the subsidy from people who had lived in the city for less than seven years. The court lowered the threshold to one year, sparking fears over public expenditure.

Since the judgment, the government had approved about 80 per cent of the 4,007 applications from new immigrants, a third of which were single-parent families, Cheung said.

The bureau received more than 100 applications every day immediately following the judgment, but only 20 to 30 cases a day in the past few weeks, he said.

Applying these figures, the minister estimated an increase of 6,000 to 7,000 applications a year.

This could cost the public an extra HK$130 million to HK$197 million a year. The government spent HK$19.7 billion on the CSSA in 2012.

Sze Lai-shan, of the Society for Community Organisation, which helps the city's poor, including migrants, said the projected increase was small compared with the HK$20.3 billion the government had earmarked for the scheme in the current financial year. The figure was set before the court ruling.

Dominic Lee Tsz-king, a Liberal Party member opposed to lowering the CSSA threshold, said Cheung's estimate justified his fears. "This may attract more people from the mainland who are eyeing government subsidies," Lee said.

Local officials should work with mainland counterparts to assess the financial status of future immigrants, he said.

Additional reporting by Jennifer Ngo