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Respect for the elderly to be put to the test
Justine Lau and Joe Leahy
the best Confucian tradition, Tung Chee-hwa, Hong Kong's chief executive,
has long emphasised respect for the elderly as a big priority.
One of his first acts on coming
to power in 1997 was to increase the government's social welfare payment
for the elderly by nearly one quarter.
Five years on, however, improving
the lot of the territory's growing elderly population continues to be a
Already battered by the Asian
financial crisis, Hong Kong is struggling through its second downturn in
The government's revenue is
shrinking and unemployment rising. Antony Leung, financial secretary, has
warned that government expenditure is expected to grow only 1.5 per cent a
year over the next five years.
This has left the administration
with little room to increase spending at a time when pressure on the
welfare system is rising.
The elderly are by far the
dominant group drawing welfare benefits, accounting for 55.9 per cent of
all cases in April this year.
While the number of unemployed is
rising, it is the elderly who are expected to place the greatest burden on
the system in the future. In 2001, 11 per cent of Hong Kong's population
was above 65 years old; by 2031 one in four will be above this age.
The cost of elderly welfare and
medical care could escalate from HK$20bn a year now to HK$50bn in 30 years
time, at which point it could account for one fifth of total government
spending, says Nelson Chow of the University of Hong Kong.
To meet the longer-term challenge
of this burden, the government in 2000 introduced the country's first
compulsory pension scheme. The problem is what to do in the intervening 20
to 30 years. It is not that Hong Kong's welfare system is ineffective -
the government's social safety net does ensure most old people do not end
up on the streets.
The difficulty is that the system
is inefficient; resources are spread too widely over all income groups,
leaving many who do not meet the stringent requirements for full welfare
overly dependent on their children or on meagre savings to survive.
Under the present system, there
are two main allowances available to the territory's elderly. The poorest
- those who do not live with their children and have assets of less than
HK$37,000 - receive the comprehensive social security allowance of
HK$2,500 a month plus rent concessions and other allowances.
Those with assets above this
amount, or who live with their children, can apply for the old age
allowance, nicknamed "fruit money" by Hong Kong people, which is
valued at up to HK$705 a month.
This is means tested for those
aged 65 to 69 but is available to all aged 70 and over.
The government also provides
housing and medical subsidies.
For those who qualify for the
comprehensive social security allowance, the system provides an adequate
living standard, Prof Chow says.
However, for those forced to make
do with fruit money, things can be more difficult.
Prof Chow estimates that about 40
per cent of fruit money recipients have lower incomes than people on full
Take Lo Lai Shung, for instance,
an energetic 74-year-old widow living in a two-room apartment in Kowloon.
A former factory worker, she is
extremely careful with her money and possessions - many of the appliances
in her flat are still wrapped in their original plastic to help them last
She saved HK$100,000 for her
retirement. This is a large sum for her but small for Hong Kong, where
average monthly expenditure is estimated at HK$21,797 for a three to four
However, it is still enough to
disqualify her from all welfare payments except the fruit money.
With few jobs available, Ms Lo is
forced to use her savings to pay her monthly bills.
"No matter how thrifty I am,
I still have to spend at least HK$2,000 a month - and I have to make sure
I don't fall sick," she says.
The government has released few
details of what it plans to do to overhaul the system.
But as part of a review, it is
believed to be studying abolishing the fruit money allowance altogether.
The money saved would be used to
increase welfare payments for those who need them most - subject to
means-testing - perhaps by introducing a multi-tiered system.
Any attempt to stop the fruit
money payments will meet stiff opposition.
It would leave many old people,
particularly those who live with their children and are therefore not
eligible for full social security benefits, without an important source of
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