Lose-lose situation on Hong Kong pension options: face much higher taxes or force elderly means-testing
Universal scheme would incur sky-high costs and lead to higher taxes, while alternative for those most in need would see elderly means-tested
Hongkongers have two extreme options to choose from if the city is to have a proper pension scheme: one that is universal and covers all retirees but will cost a fortune and require higher taxes; and the other catering only to those in need, but subject to a means test that will shut out most elderly citizens.
Chief Secretary Carrie Lam Cheng Yuet-ngor yesterday launched a six-month public consultation exercise on the highly contentious issue, following up on work of the Commission on Poverty, which she headed.
VOTE NOW: Would you rather pay higher taxes, or cater only to the poorest citizens when it comes to Hong Kong’s pension scheme?
“Even if there is clear consensus among the public, to have anything concrete, delivering the money into the hands of the elderly would be impossible to achieve [within this administration’s tenure],” said Lam.
“If the public overwhelmingly say that they don’t mind the tax hikes in order to pay for the ‘regardless of rich or poor’ option, a responsible government will still have to respond, but we also need to be responsible and let the public know the high expenses.”
The non-universal option, catering to “those with financial needs”, would be much cheaper. Elderly people with assets below HK$80,000 and monthly income capped at HK$7,340 would get a monthly allowance of HK$3,230. For a couple, assets cannot exceed HK$125,000 and their monthly income limit is HK$11,830.