LCQ15: Review of income limits for support programmes before the implementation of the statutory minimum wage

     Following is a question by the Hon Starry Lee Wai-king and a written reply by the Secretary for Labour and Welfare, Mr Matthew Cheung Kin-chung, in the Legislative Council today (December 8):

Question :

     The Provisional Minimum Wage Commission has recommended setting the initial statutory minimum wage rate in Hong Kong at $28 per hour, which will be implemented by the Government on May 1 next year. Based on this hourly wage rate, if all members of a two-person household receive minimum wages, they may not be able to apply for public rental housing (PRH) because their gross income exceeds the Waiting List income limit of $11,660 for PRH. In addition, the gross income of a grass-roots family with children may also exceed the income limit for receiving full grant of the School Textbook Assistance after the minimum wage rate takes effect. In this connection, will the Government inform this Council whether a comprehensive review of the relevant policies will be conducted in time before the statutory minimum wage rate takes effect, so as to ensure that grass-roots families will not be deprived of opportunities to apply for various support programmes due to the implementation of the minimum wage rate; if such a review will be conducted, which policies will be involved, as well as of the details and timetable of the review; if not, the reasons for that?



     The Administration introduced a statutory minimum wage (SMW) to protect grassroots workers. The aim is to establish an appropriate SMW regime which provides a wage floor to forestall excessively low wages, but without unduly jeopardising our labour market flexibility, economic growth and competitiveness or causing significant adverse impact on employment opportunities for vulnerable workers.

     SMW is the minimum remuneration that employees receive from employers for their work done. On the other hand, some Government welfare programmes which are subject to income tests are assistance provided to specified persons in need and are usually funded by public money. The two have their own distinct purposes and natures, and thus should not be mixed with one another.

     With regard to the waiting list for public rental housing, the income limits are derived using a "household expenditure" approach. Each year, the Hong Kong Housing Authority reviews the relevant limits according to the established mechanism, adopting the most up-to-date statistics to reflect the latest socio-economic changes. As for the "School Textbook Assistance Scheme", the eligibility and level of assistance of an applicant are assessed on the basis of the "Adjusted Family Income" mechanism, which takes into account the applicant's gross annual household income and household size. The income ceilings for different assistance levels are adjusted annually in accordance with the movement of the Consumer Price Index (A) compiled by the Census and Statistics Department. The Administration will continue to monitor the operation of the Scheme in order to provide appropriate support to needy students.

     The specific impact of SMW can only be assessed after it has been implemented for a period of time. The Administration will take full account of the impact of the implementation of SMW when considering whether corresponding adjustments are necessary.

Ends/Wednesday, December 8, 2010
Issued at HKT 12:02