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Simple application procedures for Old Age Living Allowance (with video)

     The Chief Executive announced on July 16 the Government's plan to introduce an additional form of financial assistance at $2,200 per month, called the Old Age Living Allowance (OALA), to supplement the living expenses of elderly people in need aged 65 or above.

     The Government has submitted a discussion paper to the Legislative Council today (October 9) setting out the details of the OALA, including its key features and implementation arrangements.

     The Secretary for Labour and Welfare, Mr Matthew Cheung Kin-chung, and the Director of Social Welfare, Mr Patrick Nip, held a press conference on the OALA today.

     Speaking at the press conference, Mr Cheung said, "As a new poverty alleviation measure, the OALA aims at supplementing the living expenses of elderly people whose needs fall between the Old Age Allowance (OAA) and Comprehensive Social Security Assistance (CSSA).

     "Alleviation of elderly poverty ranks high on the agenda of the current term Administration. Introduction of the OALA demonstrates the Government's commitment to enhancing the well-being of the elderly. It is also a breakthrough in the Government's policy to improve people's livelihoods."

     It is estimated that more than 400 000 people will receive the OALA in the first year. Taking October 1, 2012 as the effective date, it is estimated that in 2012-13 the additional expenditure on cash payment will be around $3.1 billion (the amount will be around $6.2 billion if calculated in full-year terms). Making reference to the 2012-13 Budget, an additional $6.2 billion will result in a 14 per cent increase in the estimated recurrent Government expenditure on welfare, or a 2.3 per cent increase in the total estimated recurrent Government expenditure. The amount is equivalent to 0.3 per cent of the gross domestic product. Taking into account the effects of an ageing population, the financial implication of the OALA is estimated to rise incrementally each year, to around $6.4 billion in 2013-14, and further to some $9.6 billion by 2022-23.

     Mr Cheung said that in introducing any new initiative, due regard should be given to its policy objectives, long-term implications and sustainability.

     "Since the OALA aims at alleviating poverty and supplementing the living expense of the elderly in need, its applicants must meet income and asset requirements. We are also mindful that a rapidly ageing population poses great challenges to the local welfare and medical systems, and Hong Kong will see a sharp increase in the elderly dependency ratio and economic dependency ratio. Therefore, we need to have an objective mechanism setting out the income and asset requirements, so that we can identify people who have a genuine need, and ensure that limited Government resources are directed to helping them.

     "The Government is committed to enhancing support for needy elders, and given the public's wish for a set of liberal and simple eligibility criteria, we have come to the conscious decision to adopt the eligibility criteria of Normal OAA, which are familiar to elders and well established," stressed Mr Cheung.

     In other words, OALA applicants must:

(a) be aged 65 or above;
(b) have been a Hong Kong resident for at least seven years, and have resided in Hong Kong continuously for at least one year immediately before the date of application; and
(c) meet income and asset requirements on a single person/couple basis. The existing thresholds being - for a single elderly person, the monthly income limit is $6,660 while the asset limit is $186,000; for a married couple, the monthly income limit is $10,520 while the asset limit is $281,000.

     The payment rate of the OALA will be adjusted annually according to the Social Security Assistance Index of Prices. The income and asset limits for the OALA will also be adjusted annually accordingly to the established mechanism.

     In view of the large volume of potential applications at the initial stage of implementation, the Social Welfare Department (SWD) has devised a set of simplified application procedures to facilitate the different types of eligible elders:

(a) Auto-conversion: Except those who take the initiative to report to SWD that they have exceeded the relevant income or asset limits or opt not to switch to OALA, 290 000 elders, comprising 215 000 former Normal OAA recipients who are currently receiving Higher OAA and 75 000 existing Normal OAA recipients, will be automatically converted to OALA. The SWD will credit the OALA payment to their bank accounts directly in March 2013 at the earliest without requiring them to make fresh applications;

(b) Postal submission: for existing Higher OAA recipients who have not received Normal OAA before and existing Normal Disability Allowance (DA) recipients aged 65 or above, the SWD will issue letters to them in late February 2013, inviting them to apply for the OALA by postal submission; and

(c) New application: new applicants (i.e. those not currently on OAA or Normal DA) can make their applications directly to SWD's social security field units by fax, e-mail or by post, through referral or in person, after the OALA scheme is formally launched in March 2013 at the earliest. The SWD will then make an appointment with the applicant to process the application.

     In the second year of implementation (i.e. between March 2014 and February 2015), postal reviews will be conducted for all auto-conversion cases. There will also be a mechanism to review the eligibility of recipients in future.

     The Government proposed to take the first day of the month of funding approval by the Legislative Council Finance Committee as the effective date for the OALA. For eligible elders auto-converted to the OALA and for those who have submitted applications not later than December 31, 2013, the first payment of the OALA will count from the effective date.

     The Government plans to seek the approval of the Legislative Council's Finance Committee on October 26, 2012, with a view to implementing the OALA in March 2013 at the earliest.

Ends/Tuesday, October 9, 2012
Issued at HKT 17:55


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