Hot Topics: How MTR and Hong Kong government are trying to combat abuse of HK$2 transport subsidy scheme

The MTR Corporation has increased penalties for rail passengers who abuse a HK$2 transport subsidy scheme, with a crackdown this month on misuse of the subsidy.

The scheme began in 2012. At first, it allowed people aged 65 and above, as well as residents with disabilities, to pay HK$2 per trip on public transport such as the MTR, franchised buses, some ferries and green minibuses.

The concessionary fare was meant to help build a caring society by encouraging the elderly and disabled to be more active in the community. The age threshold was lowered to 60 in 2022, and the subsidy was extended to cover trams, red minibuses and ferries to outlying islands.

Anyone can buy a card without showing proof of identity or age. In 2019, about 4 million Octopus cards meant for people over 65 were issued, even though there were only 1.32 million people in that age group in Hong Kong that year. Only about 25,000 suspected cases of cheating were detected between 2020 and 2022.

Another problem is that elderly users take long-haul bus routes for short journeys, a practice that costs the government more. This is because the government must reimburse bus companies for the full long-distance fare, even though the passengers travel only for a few stops.

Despite the scheme’s good intentions, the move triggered a debate over the long-term financial impact given the city’s ageing population. A consultancy report stated that extending the scheme to the 60 to 64 age group would push costs to HK$8.6 billion in 2031. Fearing it will become unaffordable, lawmakers have called on the government to scale back the subsidy scheme.

To combat abuse of the scheme, eligible residents aged 60 to 64 must use JoyYou cards carrying their name and photo to enjoy the HK$2 fare, while those aged over 65 should apply for the card by the end of October.

The government will also eventually stop reimbursing transport operators for passengers who use anonymous Octopus cards for the elderly, although no date has been announced for this.

Staff writers

Question prompts:

• Name TWO actions the government and the MTR are taking to combat abuse of the HK$2 transport subsidy scheme.

• Based on Context and your own knowledge, what are the potential consequences of scaling back the subsidy scheme?

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Question prompts:

• Use the details in the illustration above to explain which TWO groups of people are being depicted. What are they doing?

• Based on Context, what potential action from the government could cause something similar to this scenario? Explain.

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• Penalties have been raised from HK$500 to HK$1,000 for heavy rail and from HK$290 to HK$370 for light rail

• The MTR will boost ticket inspections as part of a citywide enforcement operation to combat abuse, labour chief Chris Sun says

Secretary for Labour and Welfare Chris Sun Yuk-han said early this month that authorities would step up measures to deter illegal use of the concessionary fares.

“To step up enforcement actions against abuse of the HK$2 scheme by ineligible persons, the Transport Department will carry out citywide joint enforcement actions with public transport operators,” he said.

“The MTR Corporation will enhance publicity and education, strengthen ticket inspection and impose a surcharge on all ineligible passengers travelling at the concessionary fares, and will raise the surcharge amount.”

Sun said the Transport Department would also set up a team to carry out joint enforcement actions with operators of franchised bus services and ferries. He warned people found to have abused the scheme could face jail time.

The increased penalties were announced after Chief Executive John Lee Ka-chiu tasked government departments with investigating cases of abuse after concerns were raised by economists and lawmakers about the scheme’s financial sustainability and calls for a review of the policy. Lee did not say whether a review was needed, and emphasised the priority should be on investigating misuse of the scheme.

Lawmaker Michael Tien Puk-sun, a former chairman of the Kowloon-Canton Railway Corporation, appealed to the government to consider an 80 per cent discount on fares instead of the flat HK$2 rate to save the trouble of regular adjustments. But Sun insisted the authorities would focus on cracking down on misuse and had already started to introduce improved enforcement a year ago.

“As enhancement and anti-abuse measures have been implemented progressively for just over a year, since February 2022, the government at this stage will focus on stepping up efforts to combat abuse by ineligible persons,” he said.

Former transport minister Anthony Cheung Bing-leung earlier accused the previous government of being “too hasty” in including those aged between 60 and 64 in the subsidy scheme. He argued it would create additional financial burdens.

He said the move could not be reversed now, but asked the authorities to raise the concessionary fare to HK$3.

Staff writer

Question prompts:

• Name TWO ways the HK$2 scheme has affected the community.

• How far do you agree that the increased penalties can combat the misuse of the concessionary fares?

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• Their call was made after labour minister revealed reimbursement to transport operators was snowballing

• Other suggestions include charging passengers based on distance of travel

The Hong Kong government’s contribution to a HK$2 transport subsidy for the elderly should be capped monthly or yearly, economists and lawmakers said. They also called for heavier penalties for abusers to ensure the system’s sustainability.

Terence Chong Tai-leung, executive director of Chinese University’s Lau Chor Tak Institute of Global Economics and Finance, told a radio programme the scheme had drained public coffers in recent years.

He told the Post that a cap should be imposed on eligible commuters. After they have used the quota, they should pay the full fare. Chong also argued the concessionary fare should be linked to ticket cost, instead of a flat price of HK$2.

“If the ticket fare is higher, people should pay more,” he suggested, adding the government did not have enough surpluses in recent years to cover the cost of the scheme.

He said that Hong Kong should also refer to the transport policies of other cities and consider offering the cheaper rate only at non-peak hours.

“Those heading to work should be prioritised during peak hours,” Chong said, adding that elderly people who did not have to commute during those times might still choose to do so because of the heavily subsidised fare.

Tony Tse Wai-chuen, a lawmaker representing the architectural, surveying, planning and landscape sector, said on the same radio show that heavier penalties should be introduced. “The penalty could be even higher to step up deterrence,” he argued. “With heavier penalties, even if staff can only conduct spot checks, people would worry about getting caught.”

Both Tse and Chong urged the government to make use of technology to solve the issue of passengers taking long-haul bus routes for short journeys, a practice that could cost the government more.

Taking Seoul as an example, Chong said travellers would need to tap their payment card when boarding and getting off buses, with charges based on travel distance. “The technology is here. It depends on whether the government wants bus operators to implement it,” he said.

Staff writer

Question prompts:

• To what extent do you agree that the government should cap the contribution to the transport subsidy for the elderly? Use Context, News and Issue to support your answer.

• Based on Context, News and Issue, propose the TWO best solutions to combat abuse of the scheme. Explain their effectiveness.

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• cap: a limit or maximum amount that is set on something, such as a price, tax or subsidy

• concessionary fare: also transport subsidy scheme. A discounted fare is offered to certain categories of passengers, such as the elderly, disabled and students. In Hong Kong, elderly people and persons with disabilities pay HK$2 for each trip on designated public transport modes and services including MTR trains, franchised buses, green minibuses and ferries.

• financial sustainability: the capacity to earn revenue or get a return on an investment that covers all expenses and makes a profit

• JoyYou card: a personalised Octopus card for Hong Kong residents aged 60 or above, designated for identification purposes under the HK$2 transport subsidy scheme. Each card also shows the holder’s name and photo.

• public coffers: the pool of money that the government collects from taxes and other sources, which is used to pay for public services such as education, healthcare and infrastructure

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Context:

• Name TWO actions the government and the MTR are taking to combat abuse of the HK$2 transport subsidy scheme. They are increasing penalties for those who abuse the scheme and introducing JoyYou cards to verify the age of people who apply for it.

• Based on Context and your own knowledge, what are the potential consequences of scaling back the subsidy scheme? Reducing the subsidy could increase the financial burden on elderly and disabled residents who rely on public transport, leading to a decrease in their mobility and social isolation.

Cartoon:

• Use the details in the illustration above to explain which TWO groups of people are being depicted. What are they doing? The people on the bus are the elderly people aged 65 or above, who are riding on the bus. The other group is people aged 60 to 64, who are chasing after the bus or trying to catch the bus.

• Based on Context, what potential action from the government could cause something similar to this scenario? Explain. Scaling back the subsidy scheme to no longer include the 60 to 64 age group

News:

• Name TWO ways the HK$2 scheme has affected the community. It benefits the environment because it encourages the use of public transport, which can help reduce traffic congestion and air pollution. / The scheme may incentivise unnecessary trips, leading to increased carbon emissions. / The scheme can encourage those eligible to make more trips and be more active in the community. / It leads to people abusing the transport subsidy scheme, causing a financial burden on the government. (accept other reasonable answers)

• How far do you agree that the increased penalties can combat the misuse of the concessionary fares? The increased penalties, along with other measures such as joint enforcement actions and enhanced ticket inspection, have the potential to combat the misuse of the concessionary fares. However, it remains to be seen how effective these measures will be in practice. (accept other reasonable answers)

Issue:

• To what extent do you agree that the government should cap the contribution to the transport subsidy for the elderly? Use Context, News and Issue to support your answer. To a large extent, I agree that the government’s contribution to the transport subsidy for the elderly should be capped as this can ensure the financial sustainability of the scheme so it can benefit more eligible passengers. / To a lesser extent, I agree that the government should cap the contribution to the transport subsidy as this could affect the elderly and disabled people who rely on the scheme. The government could consider combatting abuse through measures like fare discounts, heavier penalties and use of technology. (accept other reasonable answers)

• Based on Context, News and Issue, propose the TWO best solutions to combat abuse of the scheme. Explain their effectiveness. The best solutions include requiring eligible residents to use JoyYou cards carrying their name and photo to enjoy the HK$2 fare and linking the concessionary fare to ticket cost instead of a flat price. These will be most effective because the first solution will stop abuse of the system at the start, and the second one will reduce incentives for people to abuse the scheme. (accept other reasonable answers)