Egg-waffle man Ng Yuk-fai, who said he refused to claim the dole and was praised by the health minister for his independence, is being investigated by police for alleged benefit fraud.
The Social Welfare Department launched a probe after news reports of the Tai Hang hawker's latest arrest last week alerted it to his earnings.
'It is alleged that he hid his income while getting welfare money from the government,' a person familiar with the case said.
A department spokesman said the matter had been referred to the police for further action.
After his arrest on April 10, Ng told reporters he made HK$6,000 a month selling his waffles on the streets of Tai Hang, HK$4,000 of which he sent back to his mainland family, and earned extra money delivering food for a restaurant and collecting waste paper. He said he refused to accept social welfare.
Secretary for Food and Health Dr York Chow Yat-ngok said two days later that he was sympathetic towards the hawker. 'He seems to be determined to continue working instead of getting Comprehensive Social Security Assistance. I find this virtue respectable,' Chow said.
Social Welfare Department case workers tried unsuccessfully to find Ng last week, but tracked him down on Monday and interviewed him. A complaint was made to police yesterday afternoon. 'Wan Chai police received a report from the Social Welfare Department. Police are following up the case,' a police spokeswoman said, adding that no one had been arrested.
The person familiar with the case said Ng began receiving about HK$3,000 a month in welfare about 10 years ago. His three children, who came to Hong Kong from the mainland about five years ago with their mother, also receive money from the government. But the mother was not eligible as she had not been in Hong Kong for the required seven years, the person said.
The department did not say how much the family - who live in a public flat in Wong Tai Sin contrary to earlier reports that Ng lived in a tin shed - has been receiving in all. But a parent and three children could get more than HK$10,000 a month including a rent allowance. Ng, dubbed the 'old egg-waffle man' by his customers, has become a cause celebre in the city, with more than 4,000 supporters on Facebook. About 70 passers-by and neighbours gathered to support him when he was arrested.
Police had to be called in to deal with angry supporters. In Eastern Court on April 15, he was fined HK$220 for street obstruction, HK$280 for illegal hawking, and HK$280 for illegally cooking food.
There were 1,049 welfare fraud cases in the past financial year, 60 more than in the previous one but the overpayments involved, HK$49.1 million, were less than the HK$59.7 million in 2009-10. There are 462,564 welfare recipients in the city, Social Welfare Department figures show.