Retirement protection: Hong Kong can learn from Australia’s ‘sliding scale’ principle, experts say

Hong Kong could learn from the “sliding scale” principle of Australia’s retirement protection scheme, offering a pension to the majority of the retirement population, though the amount would depend on how rich or poor they were.

Retirement experts made the suggestion with the six-month public consultation by the Commission on Poverty about retirement protection in Hong Kong set to end on Tuesday .

While aware of the limitations of the system Down Under, they see the “sliding scale” principle as one that can address the main criticism of the Hong Kong government’s proposals – that every eligible elderly person would get a fixed amount of HK$3,230 a month regardless of their individual financial situation.

The city remains divided over what the future of the retirement system should be, half a year after the government presented two proposals: one that would give every elderly person 65 years old or above HK$3,230 a month, the other a means-tested proposal that would give the money only to those in need.

“The Age Pension is an old benefit, started in 1909, and designed as a safety net to ensure that people do not live in poverty in their old age. As you note, it is means tested, reducing slowly once income or assets, not including family homes, rise above certain thresholds,” Professor Susan Thorp of Sydney University’s business school said.