Welfare groups will run their reserves dry within five years as government funding dwindles, a leader in the sector has warned.
The result will be pay cuts for about 15,000 senior staff who are at the forefront of efforts to help troubled people, said the chief executive of the Hong Kong Council of Social Service (HKCSS), Christine Fang Meng-sang.
The welfare agencies have amassed about $1 billion in reserves through cost-cutting and restructuring in the five years since the government introduced a lump-sum funding system, along with temporary tide-over grants to help them adjust.
Under the lump sum grant welfare organisations receive a one-off payment based on the mid-point of their salary scales. Payments used to be based on wage costs across the board.
Ms Fang said the tide-over grants are due to end in March and the groups would have to start dipping into their savings to pay staff.
Most of the 163 agencies affected would run out in five years but some groups might only be able to last for two years.
