The Secretary for Labour and Welfare, Law Chi-kwong, on Wednesday dismissed concerns that plans to reform the government’s allowance schemes for the elderly will be financially unsustainable.
Chief Executive Carrie Lam had on Tuesday announced major changes to the Old Age Living Allowance Scheme and the Higher Old Age Living Allowance Scheme –standardising payments, and raising the asset limit to HK$500,000.
The changes will mean around 50,000 existing recipients will in future get more money, while an estimated 100,000 people will become eligible for the monthly HK$3,585 payments – at a cost of around HK$5 billion a year.
Speaking on an RTHK programme, Law acknowledged that the additional recurrent expenditure is significant, but suggested that the fewer people will need to rely on the payouts in future because they'll be getting so much money from their MPF savings.
"We do consider in the long run with people's growing savings, including the Mandatory Provident Fund Schemes, the percentage of senior people who are eligible for the Old Age Living Allowance will drop slightly and slowly", Law said. "So, in terms of the long-term sustainability, it is a challenge but it should be surmountable."
But Executive Councillor Lam Ching-choi painted a different picture, saying the modified allowance scheme is now so broad it’s similar to a universal pension scheme.
Speaking on another radio programme, Lam said many more people stand to benefit from the modified scheme because of the increase to the asset limit.
He also said this could be implemented quickly than a universal pension plan.