The plight of the city's jobless and working poor in the spotlight

Falling throughIn the first of a four-part series on poverty, Elaine Yau and Andrea Chen look at how Hong Kong's welfare system is failing the jobless

PUBLISHED : Monday, 09 December, 2013, 10:06am
UPDATED : Friday, 15 June, 2018, 2:20pm

Former decorator Hung Yiu-wah, 54, is skilled, able-bodied and reasonably fit for his age. Yet he has been on social welfare for 15 years, getting by on the HK$3,500 he gets each month from the government. He applied for assistance in 1998, a year after losing his job, and hasn't been able to get employment since.

Hung's continued joblessness hasn't been for want of trying. As a healthy welfare recipient, he is required to attend two job interviews each month. Clearly, there is something wrong with this picture.

Over the past 15 years, I have not had even one job offer. They all ask me to go home to wait for a call
Former decorator hung yiu-wah

Not surprisingly, he says the constant cycle of job interviews and rejections has eroded his confidence.

"When you are aged under 50, you must attend four job interviews every month. The government was more lenient after I turned 50," he says. "I've looked for all kinds of jobs - as a coolie [a labourer], vegetable seller and shop assistant. Over the past 15 years, I have not had even one job offer. They all ask me to go home to wait for a call."

Between job interviews, Hung must also perform community service as a condition of receiving welfare.

"You have to work three full days every week," he says. "I work in elderly centres cleaning pipes or sweep the streets. If I don't show up for work, part of my benefit will be deducted."

Although he understands the aim of requiring community service from welfare recipients, Hung doesn't think it helps them; he would rather spend the time attending skills retraining workshops, he says.

The establishment of an official poverty line in October has re-energised debate on ways to improve social parity with experts and concern groups floating new schemes to help low-income groups. (The poverty line is currently set at half of 2012's median household income - ranging from HK$3,600 per month for one person to HK$14,300 for a four-person household.)

As the main channel for public welfare, the Comprehensive Social Security Assistance (CSSA) scheme has come in for particular scrutiny. Scholars and social workers on the front line question its effectiveness and have called for an overhaul of the scheme, whose structure has not been altered since 1996. The only change has been to raise the amount of benefit each year in line with the consumer price index (CPI), says Lee Yen-hao of lobby group Concerning CSSA and Low Income Alliance.

"The Social Welfare Department says they review [the CSSA] every year. But it's just an increase in the amount of benefit. In the latest round of revisions, for instance, CSSA payment will increase 3.7 per cent in February. Despite the annual rise, it isn't enough to catch up with inflation."

Among the criticisms of the social security system are its inflexibility and its failure to meet the needs of the aged poor. For example, because all CSSA applications are done as household units, a rule was introduced in 1999 requiring families to renounce financial support for aged parents by signing a so-called bad-son statement before the elderly qualify for assistance. This requirement often forces the elderly to move out of homes that they share with struggling offspring to get financial help, social workers say.

Government figures show that of 270,060 households on CSSA in 2012, the elderly make up the biggest portion (56.8 per cent), followed by single families (11.5 per cent) and those with poor health (9.4 per cent). And although the jobless make up just 9 per cent of recipients, they are typically cited as abusers of the system.

"There's a lot of misunderstanding about CSSA, one of which is that most recipients are not willing to work, and, if you work, you shouldn't apply for assistance," says Dr Law Chi-kwong, an associate professor of social work and social administration at the University of Hong Kong. "Hong Kong people tend to think that if you receive CSSA, you are not good enough to support yourself or you are lazy and exploiting the system."

The government should do more to remove such prejudice, Law says.

Some critics blame the Social Welfare Department itself for reinforcing such bias, citing 2007 commercials that warned of CSSA fraud.

Statistics belie that image of welfare cheats: between 2008 and 2012 about 200 people - less than 0.1 per cent of all recipients - were prosecuted annually for CSSA fraud.

The paucity of government retraining schemes for jobless welfare recipients has come in for considerable criticism, too. Hung's predicament reveals some of the hurdles.

"I've worked in renovation and decoration since I was 18 and used to earn HK$40,000 a month. As long as you were a skilled handyman then, you didn't need to be licensed. But as society changed, workers without formal qualifications like us were phased out. I attended training courses provided by the Vocational Training Council and charities which can lead to qualifications in electrical and construction work, but I can't afford the exam fees which cost several thousand dollars."

Leo Goodstadt, who headed the Central Policy Unit from 1989 to 1997, argues that as the city grows increasingly wealthy, the government must expand its welfare coverage to help people who have been left behind.

"We are not short of money. Government revenue enjoys a steady year-on-year increase. CSSA took up 8.2 per cent of total government revenue in 2001. A decade later, it fell to 3.6 per cent," says Goodstadt, whose recently released book, Poverty in the Midst of Affluence, takes the administration to task for mismanaging plentiful resources.

A 2012 Oxfam Hong Kong report estimated that there were 194,100 households which could be regarded as working poor and nearly 60 per cent (113,500 households) earn less than what a family of the same size might receive under CSSA.



Lee, a social worker, insists welfare assistance is the last resort for most people in his care. "Newspapers often make a deal of it whenever individual fraud cases occur. But for many people, CSSA is the safety net they fall back on when they lose their jobs, fall ill or have other kinds of difficulties."

Although CSSA payments have swelled from HK$17.8 billion in 2005-06 to HK$19.3 billion in 2012-13, its share of recurrent government spending has shrunk from 9.5 per cent to 7.3 per cent over that period.

At present, the standard assistance for one able-bodied adult, excluding rent, is HK$2,070 and HK$2,490 for an able-bodied child. In bigger households, each additional person receives incrementally less money because they would be sharing utilities such as electricity.

Lee says CPI-linked increases in assistance don't make up for the combined reduction following two rounds of cuts in 1999 and 2003. But with housing costs going through the roof, he reckons the government's top priority should be to adjust rental subsidies for people forced to live in private flats.

Taking former decorator Hung as an example, the HK$1,440 rent subsidy for single people doesn't cover the HK$1,800 he must pay each month for a 28 sq ft cubicle in a subdivided flat in Sham Shui Po.

Still, Hong Kong's history of laissez-faire development means people mistrust attempts to increase welfare assistance.

Writing on his blog, Richard Wong Yue-chim, a professor of economics at HKU, argues that the level of CSSA payment is too high, and discourages people from working.

"[The] social security allowance scheme contributes to the expanding population of otaku [youngsters who stay at home all day]. This group of people usually earn the minimum wage. So, if they are entitled to CSSA, they will give up their jobs and rely on social security," he says.

His point may have some validity. For example, a family of four on CSSA will receive about HK$9,900 per month, which is slightly more than the average income of HK$9,800 for a working family in the poorest 20 per cent of the population.

A Liberal Party survey conducted in 2012 found that more than 70 per cent of 1,227 residents polled support setting a two-year limit for CSSA payments to jobless, able-bodied people.

The failure of schemes to get able-bodied welfare recipients back into the job market has been another key criticism.

According to the Social Welfare Department, jobless recipients stay on welfare for an average of 4.8 years.

To prevent reliance on social security, able-bodied recipients aged from 15 to 59 are required to join an employment assistance programme. But its success has been limited. Of the 117,764 people who joined the programme since its launch in 2008, only 13.1 per cent found jobs that lasted for at least three months and only 7.2 per cent stopped requiring assistance altogether.

Law also challenges the rigidity of the social safety net, which excludes people whose assets or income levels slightly exceed the eligibility ceiling in a means test.

"There are quite a number of people under the poverty line who don't qualify for CSSA. That doesn't mean they do not need help," he says. That's why we need to set up a system where these people, who have assets but still live in poverty, should get some form of subsidy.

"Say, the CSSA eligibility ceiling is HK$3,000. Those whose income is HK$10 below it receive HK$36,000 [annually] and those who are HK$10 above it get zero. That's a huge difference so something must be wrong," Law says.

"It's necessary to create different levels of support for people in different levels of poverty. You should give people who are slightly above the line a slightly smaller amount of help, but not nothing."

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