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Transcript of remarks by SLW on Low-income Working Family Allowance

     Following is the transcript of remarks by the Secretary for Labour and Welfare, Mr Matthew Cheung Kin-chung, on the implementation of the Low-income Working Family Allowance at a media session at the ground floor lobby of the West Wing, Central Government Offices today (November 24):

Secretary for Labour and Welfare: The Low-income Working Family Allowance will be rolled out on May 3 next year. Since the claim period is dating back to the previous six months, so actually the effective date we are talking about is November, i.e. this month, to start counting the allowance. We are talking about close to 700 000 grassroot citizens who will benefit, coming from 200 000 families and comprising 170 000 children.  It is a very important policy measure to tackle working poverty and to ease intergenerational poverty. So we are talking about really a two-pronged policy measure to tackle the problem of poverty in overall. An essential feature of the scheme is it is flexible. It caters for both self-employed, part-timers and also full-time workers. But the requirement is that they must work up to certain hours, 144 hours (per month) is the basic threshold, going up to 192 hours (per month). And the basic allowance will begin with $600 per family, rising to $1,000 per family. So we are talking about a very flexible, generous scheme. It is estimated that it will cost the Government $3 billion a year in terms of the allowance. It will reduce the overall poverty rate by 2 percentage points and the child poverty rate by 4.2 percentage points. So it is a very important step forward in building a caring, compassionate society and also, as I said, in tackling working poverty in Hong Kong.

     We will be inviting applications by batches from May next year. Application forms will be available in April and we accept applications in three batches to avoid bunching effect. The first batch will cater for families of household size with four persons or above. And then the second stage, coming in June, deals with families with three persons, and finally of course the two persons' households. We are talking about a phased approach, but the idea is that no one will lose up because the effective date will be from November, this month. So in fact they will be getting between six to eight months back pay as it were.

Reporter: Can you explain how the subsidy is going to help the families and eradicating poverty in Hong Kong, as you have mentioned? Is it like another social security or CSSA? Secondly, why the non-permanent residents are also entitled to this?

Secretary for Labour and Welfare: This Low-income Working Family Allowance is a very important manifestation of the resolve and commitment of the current term administration to tackle working poverty in Hong Kong. We estimate at least close to 700 000 grassroot citizens will benefit, coming from 200 000 low-income families, comprising 170 000 children. So we are talking about first of all, promoting employment and self-reliance. One of the major criteria is the family must not be on social security. In other words, it must not be drawing Comprehensive Social Security in order to be eligible. This is the first and very important requirement to fulfill. Secondly, we have got working hours requirement. Those meeting the 144 hours (per month) basic threshold will be entitled to $600 (per family) basic allowance. If going up to 192 working hours per month, they will have an extra $400 (per month). This will add up to $1,000 (per month). For a family of four, for example which is easier to understand, the cut-off point for the household income at the moment is $17,700. Anyone earning less than that, take a family of four with two children and the mum is a homemaker and entirely spends her time looking after the children, would be entitled to at least $2,200 per month, rising to $2,600 (per month) depending on the working hours we have talked about. So we are talking about for a family living in a public housing flat with asset of $487,000, or even if you own a flat yourself, as a liberal feature, but you are not renting it, if it is self-occupied, you are eligible for this allowance. Self-employed persons, like a lot of taxi drivers, mini-bus drivers, are eligible as well. Part-timers are eligible as well. So first of all, it is a very important policy to ease both working poverty and also intergenerational poverty. Secondly, in terms of reducing poverty rate, we estimate it would cut the overall poverty rate by at least 2 percentage points. For child poverty rate, it will come down by 4.2 percentage points, a very significant improvement indeed.

     The reason why we don't put in any residency requirement is that we are talking about people coming to settle in Hong Kong. They don't need to satisfy, like in other applications for social security, the need to live up to a certain period in Hong Kong. We don't need it because we want to encourage employment, particularly nowadays when Hong Kong is short of manpower. We are talking about unleashing the potential workforce and at the same time promoting employment and also easing intergenerational poverty and working poverty as well. So we are talking about an all embracing, very ambitious but very targeted approach to tackle poverty here.

(Please also refer to the Chinese portion of the transcript.)

Ends/Tuesday, November 24, 2015
Issued at HKT 21:17


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