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Hong Kong Budget 2018-2019

Expanding special allowance scheme for Hong Kong’s needy could pose headache, warn fund task force members    

Finance chief Paul Chan suggested that retirees and low-paid youths be added to proposed ‘N-nothing’ plan – but Community Care Fund Task Force members say it’s not so easy to draw the line on who benefits   

PUBLISHED : Monday, 05 March, 2018, 9:01am
UPDATED : Monday, 05 March, 2018, 10:26am

Including low-income young people and retirees in a proposed allowance scheme for Hong Kong’s needy – as suggested by the government – could pose a “headache” for the public-private fund which would administer it, two members of the fund’s task force say.

The concerns raised on Sunday by Peter Cheung Kwok-che and Chua Hoi-wai came after Financial Secretary Paul Chan Mo-po suggested that the proposed special allowance for the city’s neediest group, or the so-called N-nothings, could be expanded to include low-income retirees under 65 years old who did not qualify for social help as well as young people who had just started work and paid little or no tax.

In his latest budget unveiled last Wednesday, Chan asked the Community Care Fund to consider reoffering an allowance to the N-nothing group. 

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A one-off allowance was introduced in 2014 and 2015 for the group, which was then defined as those who were not living in subsidised housing, not eligible for welfare help and were left out in previous budgets. Some 150,000 people or 65,000 households benefited.

But Cheung, a member of the fund’s task force and a former lawmaker, said it might not be so easy to draw the line in defining the beneficiaries if the scheme was to be expanded as Chan suggested.

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“How to define whether a retiree would be entitled to the allowance? By their savings? Could those who are odd-jobbing be eligible as well? Should the fund also look into whether the retiree is living alone or with his or her family members?” Cheung said. “There are just so many factors to be considered and it could be very complicated.”

Cheung argued that the government could have easily filled the gaps by adopting the previous model for the N-nothing allowance scheme and at the same time offered a waiver for public housing tenants – a common relief measure that Chan did not adopt this year.

Chua, another task force member and the chief executive of the Hong Kong Council of Social Service, also said the proposed expansion could pose a “headache” for the fund, which had been using household – but not individual – as an assessment unit.

For instance, a young person on a low salary might face no financial difficulties if their family was affluent, he said.

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“The government might be hoping the fund will help those who are left out [in the budget]as they see no other channels, but it could indeed give us a headache,” Chua said. 

He said a more effective way to help young people with genuine financial difficulties could be to exempt part of their student loans which they applied for through a means-tested system.

Speaking on a radio show, Secretary for Labour and Welfare Law Chi-kwong, also the Community Care Fund Task Force chairman, pledged to strike a balance in defining the scope as he said a complicated mechanism might bring a huge administration fee, while an oversimple system might lead to “double benefits”.

He also revealed that the government was considering acquiring private commercial or industrial premises to serve as back offices for social workers or centres for welfare services amid an immense shortage of such facilities.