Personal tax cuts and boost to social security but tougher times ahead for public housing tenants
For the first time in six years, rents for public housing tenants will not be waived
This year’s budget offers investment opportunities and an expanded reverse mortgage scheme among relief measures for elderly people in need.
Government rates will continue to be waived for those who own property. Social welfare recipients, including those on Comprehensive Social Security Assistance and Old Age Allowance, will be paid only an extra month this year instead of the two they were paid last year. Another popular sweetener – a rent waiver for public housing tenants – has been controversially scrapped.
Financial Secretary John Tsang Chun-wah yesterday announced that inflation-linked Silver Bonds, investment products for senior citizens aged 65 or above, would be launched in a pilot scheme in the coming two years.
A source said the government was planning to offer a minimum return of 2 per cent for each Silver Bond subscription, compared with just 1 per cent for existing iBonds that are open for subscription to all aged groups.
That would mean if inflation was lower than 2 per cent, every subscriber would still get a 2 per cent return.
“We hope that the elderly would have another investment option that offers a stable return,” the source said.
While the full maturity period for Silver Bonds is three years, the source said if the subscribers feel they do not want to wait for three full years before getting back their investment, they can sell the bonds to the Monetary Authority. The subscribers would also receive interest on the bonds on a pro rata basis, the source added.
But Dr Chung Kim-wah, a social policy scholar from Polytechnic University, said the scope of the scheme could be limited, as Silver Bonds would only target elderly people who had a certain amount of assets.
“Yes the scheme can provide a stable investment for the elderly and such a low-risk nature suits their needs,” Chung said. “But only elderly people with considerable quality of life can apply. It misses out many of those at the lower levels of society.”
The reverse mortgage scheme, first introduced in 2011 to offer people aged 55 or older home loans providing equity-based cash payments, could also be expanded to accommodate more senior citizens living in subsidised housing.
Since the launch of the scheme, the Mortgage Corporation has received around 1,000 applications, with the number last year increasing by 80 per cent compared with 2014.
Chung, however, suggested the expanded scheme might not be popular, as many elderly people preferred to leave their flats for the next generation instead of losing them after death.
Tax allowances for those supporting parents aged above 55 will also been increased, with those looking after parents aged 60 or above benefiting the most.
Chief Secretary Carrie Lam Cheng Yuet-ngor welcomed the initiatives, saying they fit into concepts proposed during the public consultation exercise on retirement protection.
“Government must have ways to encourage families to take care of their elderly ... [Silver Bond] allows elderly with savings to face longevity and investment risk in a better way,” she said.
The Society for Community Organisation criticised not enough relief measures for the lower income class and ignored their needs.
Additional reporting by Gloria Chan and Phila Siu
