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Old Age Allowance Scheme

157.     In the past few months, I have heard people discussing cases of the elderly relying on the Old Age Allowance for their living and calls for the Government to increase the allowance. I am very concerned about such cases because the existing safety net provided by CSSA should be able to give them adequate assistance. According to some media reports, the elderly people concerned are not eligible for CSSA because they own self-occupied properties. As a matter of fact, under the existing system, owning a self-occupied property does not affect the eligibility of elderly people for CSSA. The elderly in need can contact the Social Welfare Department early to have their eligibility assessed.

158.     With an ageing population, the number of elderly people is expected to increase from the current 870 000 to about 2.17 million by 2033, or two and a half times the present population. The expenditure on the Old Age Allowance will increase accordingly, in today’s money, from $3.9 billion in 2008 to $9.7 billion in 2033, posing a considerable burden to public finances in the long run. If the Old Age Allowance were increased to $1,000 for each eligible person, by 2033 expenditure would surge to $14 billion. In the long run, this measure would be unsustainable, and the expenditure involved would become a heavy burden on the community.

159.     I agree that the Government should provide more assistance to the elderly in need. We must explore a feasible long-term option for the Old Age Allowance. While the option should provide adequate assistance to the elderly in need to ensure the proper use of public money, it should also be a sustainable and affordable one for the community. We hope that such an option can gain the general support of the public.

160.     The issue we need to resolve is how additional assistance could be provided to the elderly in need but without further increasing the burden of the Old Age Allowance Scheme on public finances in the long run. Subject to this overriding principle, the Government is willing to consider any option, such as identifying the elderly in need through means tests and re-deploying resources to render them more appropriate assistance.

161.     The Labour and Welfare Bureau will conduct in-depth studies on how to improve the Old Age Allowance Scheme and seek views from various sectors of the community. We hope that a decision can be made by the end of this year. I will make available resources as necessary.

162.     To enable Old Age Allowance recipients to share the fruits of our economic growth, I propose to provide each with a one-off grant of $3,000. Expenditure for implementing this measure will be $1.5 billion.



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Last revision date : 14 May, 2008