Living in Hong Kong is an expensive business. Over the last five years consumer prices have increased by 15.2%. This substantial rise in living costs is having a significant impact on lowerincome households, which are having to deal with surging rents and greatly increased transportation costs.
In an attempt to alleviate the financial burden on the lower-income working class, the Hong Kong Government has introduced theWork Incentive Transport Subsidy Scheme. The Scheme aims to encourage and help low-income earners to stay in employment by helping them to meet part of their commuting expenses.
Under the Scheme, eligible individuals who work at least 72 hours per month are entitled to a monthly allowance of HK$600. Applications are means-tested on a household basis but the subsidy is paid out individually. For a three-person household – the average in Hong Kong– the monthly household and assets limits are HK$14,800 (approximately US$1,900) and HK$148,500 (approximately US$19,000) respectively. For a two-person household the relevant limits are HK$13,400 and HK$99,000.
Some political parties and unions have argued that these limits are unrealistically low, rendering the Scheme ineffective. They claim there are too many people in need who are falling foul of the means test because it is partly evaluated on a household basis. They point out that if one member of a household receives a pay rise, this could mean that other members of the same household become ineligible for their monthly allowances, even if there is no pooling of resources.
Despite calls for a “dual track” approach which would allow applicants to choose to be evaluated either individually or on a household basis, the Government has declined to make any further changes, arguing that it wants to prevent abuses of the Scheme whereby applicants transfer their assets to other household members in order to be eligible for an allowance.
The Scheme will undergo another review in three years.