Hong Kong Budget 2018-2019

Elderly couple lament Hong Kong’s strict criteria to get financial help in old age after city budget unveiled

Mrs Mak, 84, and Mr Wat, 87, say one-off sweeteners will not do much for their standard of living

PUBLISHED : Thursday, 01 March, 2018, 8:04am
UPDATED : Thursday, 01 March, 2018, 8:04am

Mrs Mak, 84, and Mr Wat, 87, live a frugal life together in their flat bought in the 1970s in Hong Kong’s Tai Kok Tsui neighbourhood. 

They were happy with an extra two months’ worth of Old Age Allowance promised by Hong Kong Financial Secretary Paul Chan Mo-po in his second budget. However, they said the one-off sweetener would not change their living standards much. 

They called on the government to raise the standard rate of the allowance and remove all means testing for elderly subsidies.

The couple worked until they were in their mid-70s, and didn’t acquire huge savings in that time from their jobs, which were low paid and unstable. They now have to rely on the government’s Old Age Allowance of HK$1,290 per person per month. 

Taking into account about HK$2,000 their only son gives them, the couple have about HK$5,000 monthly to cover all their basic needs.

They failed the means tests required for another subsidy with a higher individual rate – the Old Age Living Allowance of HK$2,600 per month. An eligible married couple must have a monthly income lower than HK$12,770 and assets valued below HK$506,000.

“We have to be very frugal. I am wearing clothes bought decades ago ... and sometimes I buy fruit barely edible from supermarkets because it is on sale,” Mak said. 

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They were most worried about falling ill. The HK$2,000 medical service coupon provided by the government for each of the two every year could easily fall short of their needs as both suffer from several chronic illnesses and need to visit their doctors regularly. 

“My message to the financial secretary is: stop scrutinising the elderly for welfare,” Mak said. “I may not live to see all the examinations finished.”

A middle-class family react to the budget

For many middle-class families in Hong Kong, tax breaks are seen as one of the most effective measures to lighten their financial burden.

Ivy Tang Chi-lai and her husband are both working professionals and earn a combined household income of HK$180,000 a month. They support four young children and three elderly parents.

The family will be able to save an estimated HK$47,420 under the new tax model, according to a calculation by accounting firm PwC.

They will be expected to pay HK$163,420 in taxes for the financial year ending in March. Under the new model that comes down to about HK$126,000.

Tang said she was “very satisfied” with Chan’s budget delivered on Wednesday, especially as they were able to benefit from a generous tax rebate, property rate waiver and increase in allowances for children and dependent elderly parents.

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“On paper, it might seem like we earn a lot, but when you have so many mouths to feed, the expenses add up to quite a lot every month,” said Tang, a vice-principal at a secondary school.

“In previous years we wouldn’t pay attention to the budget because it didn’t seem like it was relevant to us in a big way, but this year I was really surprised at all the measures we are able to benefit from.” 

From paying the mortgage and elderly medical bills to school fees and the children’s extracurricular activities, Tang said each month they spent about 80 per cent of their monthly income on a long list of expenses.

“With such a big family like ours, we have to make sure to save up for a rainy day, so we don’t have to ask the government for help. We mostly rely on ourselves, but still, any form of tax reduction from the government will go a long way,” she said.

The extra cash could be put towards saving for a planned renovation or family holiday, she added.