Yet urges government to implement Low Income Family Subsidy

The Commission on Poverty (CoP) released the latest poverty report and announced Hong Kong's first official poverty line in the Poverty Summit today. Oxfam welcomes the government’s initiative and commitment in tackling the poverty problem, but urges that the government takes immediate steps to set specific poverty alleviation target for various poverty groups, long-term strategies, implementation plans and timetable. Oxfam considers that the priority should focus on addressing the poverty problem of the working poor, and calls on the implementation of Low Income Family Subsidy, which can ensure that working poor families with children can maintain a basic standard of living without having to apply for Comprehensive Social Security Scheme (CSSA).

The poverty report helps the public understand more about different poverty groups and lays the foundation for monitoring the effectiveness of government’s poverty alleviation policies. After the poverty line is set, a more important task is to develop appropriate policies with specific objectives and goals. In 2011, Oxfam proposed to the government to implement Low Income Family Subsidy (see annex), and submitted relevant proposals to CoP earlier this year. Oxfam urges the Chief Executive to include Low Income Family Subsidy in his policy address and implement the plan to help the working poor households with children maintain a basic standard of living, preventing them from falling onto the CSSA net and alleviating inter-generational poverty in the long run.

Oxfam’s recommendation is that the first two eligible children of working poor families will receive HK$800 each, the third and fourth child HK$600 each, and the fifth and subsequent ones HK$400 each. Under preliminary calculation, this scheme can benefit 110,000 working poor households with children, covering more than 400,000 people. Among them, about 180,000 children, or 70% of the poor children, are estimated to benefit from the subsidy. The annual cost for this scheme is approximately HK$1.73 billion.

The calculation of the official poverty line is based on the "relative poverty" concept, which is simple to understand, and easy for the public to monitor the effectiveness of poverty alleviation policies. Such calculation, however, is easily affected by economic fluctuation, and may not be able to reflect the actual poverty problem accurately. In view of this, Oxfam will conduct a "budget standard method" research, using a basket of necessities to calculate the cost of basic needs of poor people, and estimate the actual poor population. The research result will be announced in due course. Oxfam considers the actual poor population derived from this calculation method can complement and cross-check the figures derived from the calculation based on relative poverty. As a result, this can help the government to formulate appropriate and specific policies, and alleviate poverty problems effectively in the long run.

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About Oxfam

Oxfam is dedicated to fighting poverty and inequity worldwide. The international and independent development and humanitarian organisation tackles poverty in four main ways: sustainable development in poor communities, disaster relief, local and global advocacy, and education with Hong Kong youth. Established in Hong Kong in 1976, Oxfam Hong Kong is a founding member of Oxfam, an international confederation that has assisted poor people in 94 countries. Oxfam Hong Kong alone has supported poor people in over 70 countries/regions.

For media enquiries, please contact:

Kit Chau
Assistant Communications Officer
Telephone: +852 3120 5272
Email: kit.chau@oxfam.org.hk

Wong Shek Hung
Acting Hong Kong Programme Manager
Telephone: +852 3120 5279/ +852 9104 6110
Email: shwong@oxfam.org.hk

Annex:

In 2011, Oxfam proposed to the government to implement Low Income Family Subsidy, and submitted the proposals to CoP earlier this year. Details are as follows:

Target: Non-CSSA working households, with at least one member in full time employment (i.e. weekly working hours could not be less than 35 hours, or monthly working hours could not be less than 140 hours) and at least one non-working member aged below 18 years (including children aged below 6, or 6 or above receiving primary or secondary education). To minimise administrative cost, the database of the Labour Department is suggested to be used in determining eligible households.

Eligibility: The monthly household income should be equal to or lower than the poverty line (i.e. less than 50 per cent of the median income for all households of corresponding size). To simplify the application procedure, an asset test can be waived.

Subsidy Amount: Every eligible child can receive a Low Income Family Subsidy of HK$800 on a monthly base. The first two children will receive HK$800 each. The subsidy amount can decrease starting from the third children as the additional costs they bring to the household reduced. Please refer to the table below.

Monthly subsidy amounts to children in working poor households recommended by Oxfam:

Financial expense: According to the above recommendations, about 180,000 poor children below 18 years of age are estimated to benefit from the subsidy. The annual cost for this scheme is approximately $1.73 billion.