LCQ21: Poverty alleviation for elderly persons
The Hong Kong Poverty Situation Report 2016 published by the Government last month has shown that the pre-intervention poverty rate of elderly persons (i.e. persons aged 65 and above) in 2016 was over 30 per cent. Regarding the problem of elderly poverty and measures to improve the situation of poor elderly persons, will the Government inform this Council:
(1) given that the current poverty line framework takes into account only the income but not the assets of households, whether the authorities will improve the approach for drawing the poverty line, to avoid retired elderly persons who are asset-rich but with low/no income being classified as poor persons, with a view to reflecting the elderly poverty situation more accurately and formulating appropriate measures for poverty alleviation and prevention to help those elderly persons with genuine needs; if so, of the details; if not, the reasons for that;
(2) as the Secretary for Labour and Welfare has recently indicated that the authorities are considering subsidising, in the form of cash vouchers, needy elderly singletons who are tenants of public rental housing (PRH) for hiring foreign domestic helpers, of the proposed eligibility criteria and the estimated number of beneficiaries; the justifications for stipulating that such scheme is only applicable to PRH tenants, and whether they will consider extending the scheme to cover those needy elderly singletons who are not PRH tenants; if so, of the details; if not, the reasons for that;
(3) whether it will lower the age threshold for receiving the non-means-tested Old Age Allowance (commonly known as "fruit grant") from 70 to 65 so that the welfare initiative can benefit all elderly persons; if so, of the details; if not, the reasons for that;
(4) given that the Hong Kong Mortgage Corporation Limited will launch a life annuity scheme next year to enable elderly persons to convert part of their savings into a fixed monthly income, of the details and work schedule of the scheme and whether, according to the authorities’ assessment, the implementation of the scheme can alleviate the elderly poverty problem; and
(5) as employment is one of the means of getting rid of poverty, whether the Government will consider introducing new measures, such as (i) prescribing a lower salaries tax rate for elderly employees, (ii) encouraging the insurance sector to offer labour insurance products for elderly employees and (iii) providing tax concessions to employers who have hired elderly persons, to assist elderly persons in taking up employment again if they wish and are able to do so; if so, of the details; if not, the reasons for that?
Poverty alleviation and elderly care are at the top of the Government's agenda. The Government has been stepping up efforts in recent years to provide appropriate assistance to meet the various needs of elderly persons. Having consulted the relevant policy bureaux and departments, my reply to the Member's question is as follows:
(1) The Commission on Poverty announced the first official poverty line in 2013. At that time, the Commission agreed to adopt the concept of "relative poverty", setting the poverty line at 50 per cent of the median monthly household income before policy intervention (i.e. before taxation and welfare transfers) by household size. The poverty line analysis takes only household income into consideration, providing a single and simple quantitative indicator to facilitate the Government and society to keep track of the poverty situation in Hong Kong and its trend. It also offers a common and objective basis for monitoring the poverty situation and discussing relevant issues. In fact, it is an international practice to adopt the concept of "relative poverty" for quantitative measurement of poverty situation. Also, different frameworks of data analysis have limitations in data collection. Based on the Census and Statistics Department's experience in conducting surveys, many households are reluctant in disclosing information about their assets. Therefore, household assets cannot be taken into account in the analysis.
In view of this limitation, we have introduced additional objective analysis on top of the poverty line framework. For instance, the Hong Kong Poverty Situation Reports feature a thematic analysis on the poverty situation of elderly persons, which further analyses the data acquired from the General Household Survey conducted by the Census and Statistics Department, to provide more information for understanding the poverty situation of elderly persons in Hong Kong. Analysis in 2016 shows that about 0.30 million out of 0.34 million of poor elderly persons resided in non-Comprehensive Social Security Assistance (CSSA) households. Among them, about 0.21 million (over 70 per cent) persons were estimated to have no financial needs, in which about 0.13 million (over 60 per cent) of them resided in owner-occupied housing without mortgages. This reflects that some of these elderly persons who were defined as poor may have considerable assets. On the other hand, about 42 000 (14.3 per cent) poor elderly persons who resided in non-CSSA households were estimated to have financial needs, among which about 24 000 persons received Old Age Living Allowance (OALA).
The existing mechanism of formulating the poverty line and conducting additional analysis is, to a certain extent, effective in helping the Government to identify the elderly persons with financial needs as well as to evaluate and enhance the relatively targeted poverty alleviation measures. We will continue to listen to views, and are willing to explore feasible options and recommendations to enhance the analytical framework of the poverty line for better formulation and evaluation of poverty alleviation and prevention policies.
(2) To consider the possibility of subsidising elderly persons with long term care needs to employ foreign domestic helpers to provide home care is one of the recommendations of the Elderly Services Programme Plan and is still at a preliminary exploration stage. No specific details are available for the time being. The Government will seriously consider the views recently expressed by the different sectors in society before making a decision.
(3) The social security system, including the CSSA Scheme, OALA, Old Age Allowance (OAA), etc., does not require applicants' contribution and is funded by the Government's general revenue, which involves substantial public funds. In view of an ageing population, the Government has to ensure prudent use of public funds in order to provide appropriate support for needy elderly persons.
To strengthen the support of the social security for elderly persons, the Government relaxed the asset limits of the existing OALA (Note 1) on May 1 this year, so as to benefit more elderly persons with financial needs. To further support elderly persons with more financial needs, the Government will also introduce the Higher OALA (Note 2) in mid-2018.
The non-means-tested OAA provides monthly allowance (Note 3) to eligible elderly persons aged 70 or above. The number of beneficiaries and public funds involved would continue to increase in the face of growing elderly population. The Government has no plan to lower the age requirement of OAA. Elderly persons with financial needs may consider applying for OALA, Higher OALA or CSSA Scheme having regard to their circumstances and wish.
(4) The Life Annuity Scheme aims to provide retired elderly persons with some savings with an additional financial option, allowing them to turn some of their savings into lifelong stream of stable and fixed income.
The Hong Kong Mortgage Corporation Limited (HKMC) has set up a wholly owned subsidiary, The HKMC Annuity Limited, and is seeking authorisation for long term insurance business from the Insurance Authority (IA) for operating the Life Annuity Scheme. The Scheme will be provided in the form of an immediate, lifetime guaranteed, fixed-payout annuity, whereby eligible annuitants will receive monthly payouts for a lifetime immediately after making a lump-sum premium payment. The Scheme can help retirees mitigate the risks of outliving their savings and ensure the availability of a steady stream of future cashflows to facilitate better retirement planning.
The HKMC is working towards the target of launching the Life Annuity Scheme in mid-2018. The HKMC Annuity Limited is proceeding full steam ahead with the preparatory work. In addition to seeking the authorisation from the IA, it is also working on the operational details of the Scheme, including developing an effective sales and distribution network and allocation mechanism, as well as organising relevant public education and promotion activities to enhance public awareness of annuity products.
(5) The Government has been adopting a multi-pronged strategy to provide appropriate employment services for mature persons, promote their employment among employers, and build a friendly working environment for mature persons.
The Labour Department (LD) stages large-scale thematic job fairs for mature persons at suitable intervals. District-based job fairs on part-time employment are also held at the job centres to meet the needs of those mature persons who are more interested in taking up part-time jobs. Meanwhile, to foster mature persons to re-join the labour market, LD implements a series of measures such as setting up special counters at the job centres, organising tailor-made employment briefings for mature job seekers, establishing a dedicated webpage for them under the "Interactive Employment Service" website, enhancing the functions of the vacancy search terminals, etc. to facilitate their access to employment information and search for suitable vacancies.
To encourage employers to engage mature persons, LD's job centres organise experience sharing sessions on employing mature persons. Representatives of the Hong Kong Federation of Insurers are invited to brief employers on matters relating to employees' compensation insurance (EC insurance) taken out for mature employees to allay their concerns in this regard. Under the Employees' Compensation Ordinance, employers are required to take out EC insurance for their employees to cover their liabilities under the laws. The insurance industry has already put in place the Employees' Compensation Insurance Residual Scheme to provide last-resort insurance cover to employers encountering difficulties in taking out EC insurance.
In addition, LD implements the Employment Programme for the Middle-aged (EPM) to encourage employers, through the provision of on-the-job training allowance of up to $3,000 per month for a period of three to six months, to engage job seekers aged 40 or above and provide them with on-the-job training. LD has extended the EPM to part-time jobs since September 2015.
Furthermore, LD has all along been encouraging employers, having regard to the individual circumstances of their enterprises, to adopt friendly employment practices for mature persons and extend the working life of their employees so that mature persons may continue to stay in employment. Employers may also adopt more flexible modes of employment for mature persons with a view to establishing working conditions and environment suitable for attracting mature persons to retain in or return to employment. LD will also continue to promote public awareness of mature persons as a potential labour supply and encourage employers to adopt friendly employment practices for mature persons through various publicity activities.
Similar to persons of other age groups, mature persons may enrol in courses provided by the Employees Retraining Board (ERB) in accordance with their aspirations, interests and training needs. In 2017-18, ERB offers some 700 training courses straddling 28 industry categories and generic skills training. Besides, based on the findings of the "Study on the Training Needs of Mature Persons" completed in 2015, ERB developed training courses geared towards the needs of mature persons aged 50 or above, including organising the "Workplace Re-entry" course series and the "Foundation Certificate in Survey Interviewer Training" course, for mature persons who wish to engage in employment. ERB also provides placement follow-up services for trainees (including mature persons) who have completed full-time placement-tied courses. ERB provides other support services, including the "Workplace Re-entry" activity series, "Workshop on Enhancing the Awareness towards Mature Persons", "Recruitment Sharing Sessions" and "Work Experience Days" in order to promote the employment of mature persons.
The Government will continue to monitor the situation of the employment of mature persons, and consider providing further assistance in due course.
Note 1: The OALA, currently at $2,565 per month, is to provide assistance to elderly persons aged 65 or above with financial needs.
Note 2: The Higher OALA is at $3,435 per month at the 2017 price level. It will take retrospective effect from May 1, 2017.
Note 3: The OAA is currently at $1,325 per month.
Ends/Wednesday, December 13, 2017
Issued at HKT 15:55
Issued at HKT 15:55