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Following is a question by the Hon Kwok Wai-keung and a reply by the Secretary for Transport and Housing, Professor Anthony Cheung Bing-leung, in the Legislative Council today (May 29):
Question:
With effect from May 1, 2013, the statutory minimum wage rate has been adjusted upward from $28 per hour to $30. Calculated on the basis that each household member works for nine hours per day and 26 days per month, the monthly household income of $14,040 of a dual-income two-person household earning minimum wages will have exceeded the 2013-2014 Waiting List income limit for public rental housing (PRH) for two-person households (i.e. $13,750). In this connection, will the Government inform this Council:
(a) of the number of households whose applications for allocation of PRH units in each of the past three years had been rejected because their household income had exceeded the prescribed Waiting List income limits as a result of all their household members earning minimum wages;
(b) whether the Hong Kong Housing Authority (HA) has collected the following information: among the households on the Waiting List, of the current number of those whose members all earn minimum wages, and the per capita monthly income of these members; if it has, of the details; if not, whether the Government will suggest HA to collect such information; and
(c) given that the Mandatory Provident Fund Schemes Authority (MPFA) has, in the light of the adjustment to the statutory minimum wage rate, suggested that the minimum level of the relevant income for Mandatory Provident Fund contributions be increased to $7,100, whether the authorities will recommend HA to make reference to the practice of MPFA and prescribe the statutory minimum wage rate as one of the criteria for setting the Waiting List income limits; if they will not, of the reasons for that?
Reply:
President,
The Hong Kong Housing Authority (HA) has put in place a Waiting List (WL) system through which low-income families that cannot afford to rent private accommodation may apply for public rental housing (PRH). WL income and asset limits have been set to determine the eligibility of PRH applicants. Details are at Annex A. The limits are reviewed once annually to keep abreast of the latest socio-economic circumstances.
My reply to the three parts of the question as raised by Hon Kwok Wai-keung is as follows:
(a) and (b) On parts (a) and (b) of the question, currently, HA does not require applicants to indicate whether they are receiving the statutory minimum wage (SMW), and therefore does not have the number of cases as requested in the question. I wish to point out that the SMW only stipulates the minimum hourly rate. However, since the actual working hours and other employment arrangements (such as whether rest time is counted in wage assessment, etc) of each individual is different, even if they are receiving SMW, their exact wage level and total monthly income may vary among them and be different. The existing policy of HA is to require PRH applicants and their household members to declare their total monthly income at the time of application and prior to PRH allocation to assess whether PRH applicants and their household members satisfy the WL income limit applicable to the respective household size.
Nonetheless, the HA has taken into account changes in income in the newly revised WL income limits. HA's Subsidised Housing Committee (SHC) examined the review mechanism of WL income limits at its meeting on February 7 this year. The existing expenditure-based mechanism has worked well and has provided an objective assessment of the affordability of households applying for PRH. Changes in income, including the implementation and changes in SMW, will be reflected in changes in expenditure in the long run. However, in view of the fact that changes in income may not be reflected in a timely manner in the WL income limits before the results of the latest Household Expenditure Survey are updated, SHC has agreed to refine the mechanism for reviewing the income limits.
Under the refined mechanism, the non-housing cost component is adjusted by either the change in the Consumer Price Index (A) (excluding housing cost) or the nominal wage index obtained through the Labour Earnings Survey conducted quarterly by the Census and Statistics Department, whichever is higher. The nominal wage index covers occupational groups at non-managerial / professional levels (e.g. technical, clerical, service workers and craftsmen, etc) who are most likely to be applicants for PRH. Therefore, the change in nominal wage index can help in gauging changes in income of the PRH target group and in reflecting the impact on their income after the introduction of SMW.
(c) Regarding part (c) of the question, under the Mandatory Provident Fund (MPF) system, MPF contributions of employees are based on their individual income. However, there is no projection on their household income. As regards whether an applicant's household income satisfies the WL income limit, it is dependent on the applicant's overall household income. Therefore, it is not appropriate to adopt the calculation method for MPF contributions as a criteria for determining the WL income limits.
Under the current policy of PRH allocation, WL income limits are derived on a household expenditure basis to assess the affordability of applicants. The basis for the relevant policy consideration is different from that of MPF contributions.
After comprehensive assessment, HA considers that the enhanced mechanism on the review of WL income limits have taken into account changes in income, including implementation of the SMW, while maintaining the well-functioning household expenditure-led review mechanism based on affordability. Using the refined review mechanism, the derived WL income limits for 2013/14 have increased by an overall average of 6% over the income limits for 2012/13. The comparison figures are at Annex B.
President, we will continue to conduct annual reviews of the WL income limits in accordance with the refined mechanism, with a view to responding to the latest socio-economic circumstances and assessing the affordability of households applying for PRH in an objective manner.
Ends/Wednesday, May 29, 2013
Issued at HKT 16:17
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