Lam Pak Kan, Spencer UID: 3035056541 Investigative Report CAES 9922

A Report of Examination in the Problem of Elderly Poverty

Prepared by Oxfam Hong Kong

Executive Summary
The situation of elderly poverty is deteriorating as there are an increasing number of seniors living under
poverty. This report aims at examining the problem of elderly poverty in Hong Kong and thus raising the
governments awareness of this problem. It can be attributed to the flaws of social welfare policies
carried out by the government. In Methodology section, the methods of soliciting information are
illustrated. Secondary sources and an interview with Dr. Yeung Sum are the major sources of collecting
information. Then, in Findings section, an evaluation of the elderly poverty problem and a
comprehensive examination of Old Age Allowance policy and Comprehensive Social Security Assistance
(CSSA) Scheme is conducted. There are weaknesses in these two policies which make them ineffective
and insufficient. As for Old Age Allowance policy, albeit there is greater flexibility under Guangdong
scheme which is a refined scheme to abolish the full-year stay requirement in Hong Kong, the amount of
allowance is not sufficient to provide financial assistance for the poor elderly. Regarding CSSA, while it
renders a safety net for the poor elderly, the application procedure is too complicated and the amount
of subsidy is inadequate to support them financially. After conducting an examination of two major
social welfare policies, in the Recommendations section, several suggestions are also made for the
government to make improvements of these policies including increasing the amount of Old Age
Allowance and simplifying the application procedure of CSSA.

Lam Pak Kan, Spencer UID: 3035056541 Investigative Report CAES 9922

Table of Contents
1. Introduction

P.3

2. Methodology
3. Findings
3.1 Evaluation of Elderly Poverty Problem in Hong Kong
3.2 Policies Implemented by the Government
3.2.1 Old Age Allowance Policy
- More flexible under Guangdong scheme
- Insufficient Amount of Allowance

P.3
P.3-6

3.2.2 Comprehensive Social Security Assistance (CSSA) Scheme

- A Safety Net for the poor elderly
- Inadequate Amount of Subsidies
- Complicated Application Procedure
4. Recommendations
4.1 Increasing the Amount of Old Age Allowance
4.2 Simplifying the Application Procedure of CSSA

P.6-7

5. Conclusion
6. Reference List

P.7
P.8-9

Lam Pak Kan, Spencer UID: 3035056541 Investigative Report CAES 9922

1. Introduction
Elderly poverty means the seniors low financial status and the lack of basic needs in daily life (Nicholas
& Michael, 2009). The purpose of this report is to arouse the governments awareness by examining the
problem of elderly poverty in Hong Kong. This report is divided into several sections. The methods of
collecting information are first illustrated. In Findings section, it then evaluates the situation of the
elderly poverty in Hong Kong. The effectiveness of Old Age Allowance and CSSA, two of the major social
welfare policies is also examined. While there are strengths and weaknesses in these policies, this report
recommends the government increase the amount of Old Age Allowance and simplify the application
procedure of CSSA in Recommendations section.

2. Methodology
Most of the information was derived from mainly secondary sources. These included books, journal
articles, news articles and credible websites. An interview was also conducted with Dr. Yeung Sum, a
professor of the Department of Social Work in the University of Hong Kong specializing in Hong Kong
social policy.

3. Findings
3.1 Evaluation of Elderly Poverty Problem in Hong Kong
The number of elderly people suffering poverty surged by 32% in Hong Kong from 2011 to 2012,
indicating that the problem becomes more acute (Ngo, 2013). It is estimated that more than 130,000
seniors will become poor in 2033 (Interview with Dr. Yeung, 2013).
This might result in an escalating number of the poor elderly in obtaining allowance of the government.
Nearly a half of elderly people receive financial subsidies such as Old Age Allowance as their average
monthly household income is below $3000, which is difficult to sustain their living (The Hong Kong
Council of Social Service, 2009). This problem leads to excessive reliance on social welfare policies
because they lack sufficient savings and income to make ends meet. However, the government
implements inadequate and incomprehensive social welfare policies, leading to a vicious cycle in this
problem.
This problem brings about low social capital to them, meaning they have less interaction and trust in
society. The average number of friends of the poor elderly was 20.9 compared with 21.6 of the whole
elderly population in 2011 (Wong, 2011). Thus, they are more likely to be socially divided which leads to
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Lam Pak Kan, Spencer UID: 3035056541 Investigative Report CAES 9922
discrimination. They then have less social and political participation in society. The problem of elderly
poverty can be attributed to the flaws of social welfare policies, which will be examined in the following
section.

3.2 Policies Implemented by the Government

The government carries out different social welfare policies in response to the problem. It is worth an indepth investigation of Old Age Allowance and CSSA as they are two major social welfare policies. The
strengths and weaknesses of these policies will be examined as follows:

3.2.1 Old Age Allowance Policy

Elderly people are eligible to apply for Old Age Allowance and then they can receive $1135 each month.
Applicants who are 65 to 69 years old can receive the allowance after passing both asset and income
tests while those who are 70 years old or above receive it without any means test (Cheung, 2013). The
Guangdong scheme, a refined policy, was carried out to enhance the flexibility of Old Age Allowance in
2013.

Greater flexibility under Guangdong Scheme

This scheme makes Old Age Allowance policy, to a certain extent, more effective in helping the poor
elderly. A number of Hong Kong poor seniors choose to retire in their birthplace (Guangdong). Nearly
20% of 65-year-old or above Hong Kong citizens live in China for their retirement (Census & Statistics
Department, 2009). But they could not receive the allowance if they did not stay in Hong Kong for at
least 60 days each year. This provoked complaints among the poor elderly as the rigid policy hindered
them from obtaining the allowance to maintain their standard of living. However, this scheme abolishes
the full-year stay requirement in Hong Kong, which increases the flexibility of Old Age Allowance policy.
Additional 10,380 poor elderly people now become qualified and have applied for Old Age Allowance
(Hong Kong's Policies of Impoverishment, 2013). As a result, more elderly people can obtain this
allowance and a barrier of applying for this policy is removed.

Insufficient Amount of Allowance

While the positive impact of the refined scheme is acknowledged, there are still weaknesses in this
policy. Albeit more poor elderly people are eligible to apply for this allowance after the implmentation
of the refined scheme, the problem of elderly poverty still cannot be tackled due to the insufficient
amount of allowance.
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Lam Pak Kan, Spencer UID: 3035056541 Investigative Report CAES 9922
The government only renders $1135 which is a small amount of allowance to them each month. But this
cannot sustain their living every month. Each senior needs at least $3000 to deal with expenditures in
daily life including meal, transportation and medical fees (Interview with Dr. Yeung, 2013). It is
impossible for them to rely on this allowance without any savings or income to cope with daily expenses.
As a result, it can be seen that the amount of allowance is not sufficient to help the elderly get rid of
poverty.

3.2.2 Comprehensive Social Security Assistance (CSSA) Scheme

CSSA is another social welfare policy which provides the poor elderly with financial assistance. A
monthly allowance is provided to fulfill their basic needs after they pass the asset and income tests
(Hong Kong Government, 2013).

A Safety Net for the Poor Elderly

CSSA renders a safety net for the poor elderly who cannot support themselves financially. With the
amount of subsidies, the poor elderly can meet their basic needs in daily life (Wong, 2007). This is a
social security scheme which can put the poor elderly peoples interest on top agenda.
Table1: Regarding Monthly Expenditure of the Elderly in Daily Life

Table1: The percentage of the respondents whether they can handle daily expenses.
Source: Oxfam Hong Kong. (2010). p. 23. Research Report on the Living and Health Conditions of poor
Elderly not on Comprehensive Social Security Assistance and their Attitudes towards Social Security.
Oxfam Hong Kong.

Lam Pak Kan, Spencer UID: 3035056541 Investigative Report CAES 9922

Inadequate Amount of Subsidies

Even if CSSA provides a safety net for the poor elderly, the amount of subsidies is not adequate in
enabling them to handle expenditures as the payment rate system is outdated. According to Table1
above, only 31.4 % of the elderly who intended or applied for CSSA considered they can handle daily
expenditures including medical, meal and transportation fees (Oxfam Hong Kong, 2010). As the current
payment rate system was determined 10 years ago, current basic needs such as internet access and
mobile phone are not incorporated in calculating the living cost of recipients (Legislative Council of Hong
Kong, 2012). Therefore, the insufficient amount of subsidies fails to lessen the financial burden of the
poor elderly.

Complicated Application Procedure

Apart from the inadequate amount of subsidies, the complicated administrative process makes it
ineffective. Only 8% of the poor elderly in Hong Kong applied for CSSA as more than 70% of the poor
elderly consider the application procedure complicated (Legislative Council of Hong Kong, 2012). They
must apply for CSSA on household basis as the total assets and income are calculated on all family
members basis in their application (Legislative Council of Hong Kong, 2012). The poor elderly cannot
apply alone as they are also required to submit a letter in which their children have to declare the
financial inability (Chan, 2006). Consequently, they cannot apply on an individual basis. All these
demonstrate that the inflexible and complicated application procedures deter the poor elderly from
applying for this scheme.

4. Recommendations
There are weaknesses of Old Age Allowance and CSSA as demonstrated above. In light of this, two
suggestions are made for the sake of improving these policies.

4.1 Increasing the Amount of Old Age Allowance

The amount of Old Age Allowance can be increased in order to provide the poor elderly with sufficient
financial assistance to sustain their standard of living. Currently, the elderly needs to spend at least
$3000 for daily expenses per month including $1800 meal fees, $650 medical fees, $250 transportation
fees (Legislative Council of Hong Kong, 2009). However, they can only receive $1135 Old Age Allowance
a month which is not sufficient to cover their daily expenses. The government may appoint Social
Welfare Department to reassess the amount of this allowance. By reviewing the payment rates of
allowance semi-annually, the amount can be adjusted so as to keep up with the inflation rates and Social
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Security Assistance Index of Price (Woo, Ho, Yu, & Lau, 2000). This index can reveal the impacts of price
change in different goods and services so the elderly can obtain adequate allowance for daily life
(Census & Statistics Department, 2011).

4.2 Simplifying the Application Procedure of CSSA

As illustrated above, the complicated application procedure impedes the poor elderly from applying for
CSSA. Thus, even though nearly 92% of eligible elderly people heard of this scheme, they have not
applied for it (Legislative Council of Hong Kong, 2012). The Social Welfare Department may consider
simplifying the application procedure. The current application procedure requires the children of the
poor elderly to declare their financial inability. It is suggested that individual elderly people can apply for
CSSA without their family members declaration and signature (Legislative Council of Hong Kong, 2012).
Furthermore, it is suggested that the total assets and income should not be calculated based on
household basis when applying for CSSA. Instead, individual basis can be adopted so that the poor
elderly can apply by themselves as well.

5. Conclusion
As illustrated above, the problem of elderly poverty in Hong Kong is worsening, which can be ascribed to
insufficient and ineffective social welfare schemes including Old Age Allowance as well as CSSA. Several
recommendations are made for the improvements of these policies. It is hoped that the government can
take the aforementioned suggestions into consideration so as to eradicate this problem.

Lam Pak Kan, Spencer UID: 3035056541 Investigative Report CAES 9922

6. Reference List
Census and Statistics Department. (2009). Thematic Household Survey - Hong Kong Residents
Experience of and Aspiration for Taking Up Residence in the Mainland of China. Census and Statistics
Department.

Census and Statistics Department. (2011). The Social Security Assistance Index of Prices, Hong Kong
Monthly Digest of Statistics. Census and Statistics Department.

Chan, Yeung M. (2006). TB rates in Hong Kong Associated with Low Education, Poverty And Old Age. Law
& Health Weekly, 451, 1-10.

Cheung, Matthew. (2013). Hong Kong: Allowance Set for GD Retirees. MENA Journal, 10, 1-3.

Hong Kong's Policies of Impoverishment; A Poverty Line Is another Step on Hong Kong's Road to
Serfdom. (2013). Wall Street Journal, 3, 10-15.

Hong Kong Government. (2013). Comprehensive Social Security Assistance Scheme. Retrieved from
http://www.swd.gov.hk/en/index/site_pubsvc/page_socsecu/sub_comprehens/index.html

Nicholas, Joyce and Wiseman, Michael. (2009). Elderly Poverty and Supplemental Security Income.
Social Security Bulletin, 69, 45-73.

Ngo, Jennifer. (23 August, 2013). Hong Kong's Elderly Among Poorest in Developed World. South China
Morning Post. Retrieved from http://www.scmp.com/news/hong-kong/article/1298751/poor-andelderly-hong-kong-its-worse-you-think?page=all

Oxfam Hong Kong. (2010). Research Report on the Living and Health Conditions of poor Elderly not on
Comprehensive Social Security Assistance and their Attitudes towards Social Security. Oxfam Hong Kong.

Lam Pak Kan, Spencer UID: 3035056541 Investigative Report CAES 9922
Legislative Council of Hong Kong. (2009). Monthly Expenditure for The Elderly in Hong Kong. Legislative
Council of Hong Kong.

Legislative Council of Hong Kong. (2012). Oxfam Hong Kong- Position Paper on the CSSA Scheme.
Legislative Council of Hong Kong.

Wong, Hung. (2011). Quality of Life of Poor People Living in Remote Areas in Hong Kong. Social
Indicators Research, 100, 435-450.

Wong, Hung. (2007). Misled Intervention by a Misplaced Diagnosis: The Hong Kong SAR Government's
Policies for Alleviating Poverty and Social Exclusion. China Review, 7, 123-147.

Woo, J.; Ho, S.; Yu M. and Lau, J. (2000). An Estimate of Long-Term Care Needs and Identification of Risk
Factors for Institutionalization among Hong Kong Chinese Aged 70 Years and Over. The Journals of
Gerontology, 55, 64-69.

The Hong Kong Council of Social Service. (2009). Elderly Services in Hong Kong. The Hong Kong Council of
Social Service.