Ho Kwai, 79, is among thousands of elderly people who had their welfare payments cut yesterday - but he does not know how to further reduce his expenses as he is already spending less than $20 on food a day. 'I don't know what to do. I already skip breakfast. I eat only a piece of bread and spend $4 on tea for lunch. I spend only around $10 for dinner,' Mr Ho said. He is among about 150,000 elderly recipients of Comprehensive Social Security Assistance (CSSA) whose payments were cut as part of a two-stage reduction of 11.1 per cent. The payments yesterday dropped from $2,555 to $2,400, and next year they will drop to $2,270. Mr Ho, who pays monthly rent of $1,700, said he was already struggling to make ends meet because his rental allowance was slashed 16 per cent from $1,505 to $1,265 in June. He has difficulties walking and also needs to put money aside each month for medication. 'I started working in Hong Kong when I was 13. I did not retire until I was 66,' he said. 'The government once assured the elderly that they would not need to worry about their livelihood. But has it kept its promise?' Another welfare recipient, 62year-old Chiu Hung-tai, said the elderly should have been exempted from the welfare reduction as they were unable to make a living themselves. 'I can only afford to buy rotten fish and vegetables to eat as they are the cheapest. To save money on gas, I cook only once a day,' Ms Chiu said. Officials say welfare payments are being cut to take deflation into account. Expenditure on CSSA, the Disability Allowance and the Old Age Allowance is estimated to be $21.7 billion a year. The government says the cuts will save $1.03 billion this year, $1.55 billion in 2004-05 and $1.71 billion in 2005 and beyond.