The two proposals on retirement protection put forward by the government have come under fire from various organizations and scholars.
Chief Secretary Carrie Lam Cheng Yuet-ngor, who also chairs the Commission on Poverty, unveiled the two options on Tuesday and said a six-month public consultation will start on Jan. 23, Ming Pao Daily reported.
Under the scheme, Hong Kong permanent residents over the age of 65 will be given a monthly pension of HK$3,230.
There are two options. One, called universal scheme or “regardless of rich or poor” option, grants the pension to everyone covered by the age requirement. The other, known as “those with financial needs” option, will cover only those with assets worth not more than HK$80,000.
Lam stressed the HK$80,000 threshold is neither an “offer” nor a “bottomline” set by the government.
She also said the HK$80,000 figure is twice as much as the asset limit for seniors eligible for the Comprehensive Social Security Assistance (CSSA) scheme, which is HK$43,500.
Given the HK$80,000 asset limit, 60 percent of the senior citizens in Hong Kong who are receiving old-age living allowance would benefit from the proposed retirement plan, she added.
The government said the universal option, which would not require any means test, was the idea of Professor Nelson Chow Wing-sun, emeritus professor of social work and social administration at the University of Hong Kong.
Lam said the government has reservations about the universal option as it would undermine the long-term sustainability of public finances, reducing the government’s financial capacity to handle other retirement protection initiatives and compress expenditure on other policy areas.
She arned that the universal scheme would exhaust the city’s financial reserves in the 2033-2034 financial year, or eight years earlier, and the government might need to introduce new taxes or tax hikes to support it.
About 1.12 million seniors would be eligible for pension under the universal scheme, rising to 2.58 million by 2064.
Under the option limiting the beneficiaries to “those with financial needs”, about 250,000 seniors would be eligible, rising to 600,000 in 2064.
Associate Professor Wong Hung from the Chinese University of Hong Kong criticized the government for warning about tax hikes if the universal scheme is adopted, saying that it is “threatening” and “misleading” the public.
He said the universal option would offer peace of mind to all senior citizens, and it could be carried out through tax hikes and other financial means.
Cheung Man-wai, spokesperson for the Alliance for Universal Pension, said the government’s consultation was “wrongly focused” because the government is trying to alleviate poverty but the retirement scheme should aim to prevent people from becoming poor when they get old.
Legislator Cheung Kwok-che of the social welfare constituency also said the option covering “those with financial needs” is not a retirement protection scheme but a poverty alleviation plan.
The Hong Kong Council of Social Service, on the other hand, said the option that only covers “those with financial needs” is like a “pirated version” of the CSSA and the HK$80,000 threshold is very harsh since the amount is not even enough to provide for an elderly person’s basic needs.
The Commission on Poverty will conduct five public consultation sessions starting on Jan. 23.
Lam said she hoped a consensus on the retirement protection plan could be reached during the term of office of the incumbent administration, although it is unlikely that it could be carried out within the period.
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