Explainer: One-fifth of Hongkongers live in poverty. Here’s what you need to know

  • The government released its annual Poverty Situation Report for 2020, which revealed that around 1.65 million people are struggling – the highest number in 12 years
  • Although Covid-19 has hit the city hard, measures like cash handouts and public housing have helped
Sue Ng |

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The latest results from the government’s annual report on poverty show that around one in every five Hongkongers lives below the poverty line. Photo: SCMP/ Felix Wong

Hong Kong released its annual Poverty Situation Report for 2020 last week, and the results were dire: roughly one in five Hongkongers, or 1.65 million people, are living in poverty – the highest number in 12 years.

“Affected by the Covid-19 pandemic, the Hong Kong economy experienced a severe recession in 2020. The labour market deteriorated sharply, and was characterised by noticeably rising unemployment rates and decelerated wage growth,” the Report said.

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Despite the record-high number, the government said the focus should be on the number of people living in poverty after government intervention, which included measures like cash handouts and public housing. These initiatives lifted around one million people out of poverty.

Here is what you need to know about the city’s situation.

The Covid-19 pandemic has lead to a sharp increase in the number of people struggling. Photo: SCMP/ May Tse

What is the poverty line in Hong Kong this year?

The poverty line, first introduced by the government in 2013, is set at 50 per cent of the median monthly household income, without considering government aid.

In 2020, the city’s median monthly household income fell by 7.3 per cent compared to the previous year, dropping from HK$27,500 to HK$25,000. The poverty line for a 5-person household experienced the biggest drop with 9.5 per cent, from HK$22,000 to HK$20,000.

The reason for this was “the drastic fall in the proportion of working households … and a significant decrease in the proportion of households with two or more employed members,” the Report explained.

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How many people live below the poverty line?

Around 1.65 million people, or 23.6 per cent of the city’s population, live in poverty. This is the highest rate since records began in 2009, when 1.35 million people, or 20.6 per cent of the population, met the criteria.

The Report highlighted the fact that after government assistance, this number dropped to about 554,000, or 7.9 per cent, of the population – the lowest number in five years.

Government intervention measures included recurrent cash measures like comprehensive social security assistance, one-off cash subsidies, such as the HK$10,000 giveaway, and means-tested benefits that mainly included public housing.

Around 45 per cent of seniors live in poverty, more than any other age group. Photo: SCMP / Nora Tam

Poverty by age group and gender

Elderly people aged 65 and above had the highest poverty rate, with about 45 per cent of the city’s seniors living in poverty, totalling around 584,000 people. After taking into account policy intervention, the rate reduced to 14.5 per cent, the lowest since 2009.

In addition, more women than men fell into poverty last year. About 887,000 females were considered poor, or 24.2 per cent; while 766,000 males were living in poverty, accounting for 22.9 per cent.

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“Compared with males, more older female retirees were found to be living in economically inactive households with no employment earnings. Nevertheless, the proportion of females receiving social security payments was higher, which was conducive to narrowing the gap between the post-intervention poverty rates of the two genders,” the Report noted.

Both genders saw notable declines in post-intervention poverty rates. For women, the rate dropped to 8.2 per cent, while men fell to 7.6 per cent.

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Which districts are the poorest?

In 2020, Kwun Tong recorded the highest poverty rate among the city’s 18 districts, with 28.8 per cent, or 191,500 residents, living in poverty. This was followed by Kwai Tsing (27.5 per cent), Wong Tai Shin (27.1 per cent), and North (27 per cent). After policy intervention, the poverty rates for the four districts decreased significantly. For example, the rate in Kwun Tong dropped to 23.3 per cent, with 154,700 people living under the poverty line.

The government said one way it intends to lift needy seniors out of poverty is by using cash welfare. Photo: Getty Images

How will the government respond to the situation?

Referring to the Chef Executive’s 2021 Policy Address delivered in October, the Report stated the government’s four key poverty alleviation strategies: to continue to lift needy seniors out of poverty by providing cash welfare; to continue to develop the Hong Kong economy, including providing support for working households with lower incomes; to speed up public housing construction, and lastly, to strengthen the protection provided by the Mandatory Provident Fund.

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