Six things you need to know about Hong Kong’s proposed retirement protection scheme
From who stands to benefit to how it’s funded, here’s your guide to answering basic questions
A consultation paper on a long-awaited retirement protection scheme was unveiled by the government yesterday. The paper featured two scenarios known as a universal “Regardless of rich or poor” option and a non-universal “Those with financial needs” option, under which eligible elderly would receive $3,230 per month. The Post has prepared questions and answers to help you get a better grasp of what’s in the works.
1. Why do we need a retirement protection scheme?
Hong Kong has a rapidly ageing population and a shrinking workforce. The consultation paper stated that by 2040 about one in every three Hongkongers will be an elderly person. The number of Hongkongers aged 65 or above will more than double from 1.07 million last year to 2.58 million in 2064.
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An ageing population will lead to a much higher demand for health care and social welfare. Given the existing contribution rates and extent of coverage, the Mandatory Provident Fund scheme alone cannot fully address retirement protection for the elderly. The government acknowledged that some elderly people were not adequately cared for under the existing system.
2. How many people would benefit?
For the universal “Regardless of rich or poor” option
All elderly people aged 65 or above, or 1.12 million people
For the non-universal “Those with financial needs” option
This introduces a new layer of support beneath the Old Age Living Allowance, making around 250,000 elderly persons eligible