Improve old-age allowances rather than replacing them with pension, Joseph Wong says

Raising the existing Old Age Living Allowance is a more politically efficient option than setting up a universal pension scheme to provide for the city's elderly, a former senior official says.

Former secretary for civil service Joseph Wong Wing-ping was speaking yesterday at a seminar, organised by the South China Morning Post, on how the city should address the ageing crisis.

"Politically, it's impossible to introduce a pension payroll tax in addition to the [Mandatory Provident Fund]," he said. Such a tax was proposed in a report to the government by social welfare specialist Professor Nelson Chow Wing-sun to fund a universal pension.

Under Chow's proposal, all elderly residents would get a pension of HK$3,000 a month without a means test.

It would be funded from government revenues and through a payroll tax, under which both employees and employers would contribute 1 to 2.5 per cent of their income, depending on their means.

Chow, of the University of Hong Kong, who also spoke at the seminar, amended one detail of his original proposal, saying some people, such as tycoons and retired civil servants, could be excluded from benefiting from a universal pension.

Wong said that if Chow also agreed pensions should be paid according to means, a simpler way to achieve the scheme's goal was to increase the Old Age Living Allowance from the current HK$2,285 a month to HK$3,000. Elderly people with assets of less than HK$201,000 qualify for that programme.