Carrie Lam defends HK$3 billion poverty allowance after criticism

The new poverty alleviation initiative for working families could be a more effective way of spending public funds in the long run as it “prevents or slows down” people from falling into the social welfare net.

This is according to Chief Secretary Carrie Lam Cheng Yuet-ngor, who explained on Friday morning the HK$3 billion-per-year Low-Income Working Family Allowance announced in Chief Executive Leung Chun-ying’s policy address.

“We want to encourage those with jobs, but also have to nurture their children,” Lam told RTHK. “The initiative hopes to retain the needed ones in the workforce, preventing or slowing them down from falling into the Comprehensive Social Security Assistance net.”

“Despite the falling number of CSSA applicants, we noted a high dependence on the scheme once one has fallen into the net,” she added.

Lam, a former director of the Social Welfare Department, responded to doubts about the new scheme’s financial sustainability, saying: “We are spending HK$3 billion per year on the low-income allowance scheme, while the annual spending for CSSA is HK$20 billion.”

The poverty alleviation measure was generally hailed by callers to the radio programme, with many focusing on details about eligibility and implementation.

One was concerned if the Mandatory Provident Fund contribution – which is deducted from the monthly sum received by wage-earners – would be counted when determining eligibility, which is set at income that falls below the poverty line of 50 per cent of median household income (HK$22,500).

But Lam responded: “We better wait for [the] labour and welfare bureau’s elabouration on these details.”

If the Legislative Council would approve the funding application before the summer recess in July, the new scheme would be up and running in October or November this year. “Or else we have to wait until the middle of next year,” said Lam.

She added the scheme would be handled by the Efficiency Unit, rather than the Labour and Welfare Bureau, “to minimise the labelling effect”.

In another Commercial Radio programme, Lam was questioned by a Mr Yeung, who argued that such welfare policies added to the burden of the middle class, which he said did not benefit from any scheme laid out in the policy address.

“I have never earned anything less than HK$70,000 or HK$80,000 over the past decade. I have two kids … but no property. But I work more than 12 hours every day in all these years,” said Mr Yeung. “When I was hiring a waiter, I realised no one would take the job if I would pay in cash – because the applicants were all CSSA beneficiaries.”

“All welfare measures would introduce abuse. You are bringing harm to us who are in the middle class,” he said.

Lam, however, said the government was obliged to deter abuses of the allowance, and assured that the city “was not becoming a welfare society”.

Watch: How a family in a cage home reacted to CY Leung's policy address