Can the over 65s survive on MPF savings?

Elderly-work incentives

From Q3 of this year, the city will introduce a three-year program offering HK$10,000 to those aged 40-plus who have been unemployed for over three months if they are able to find work for six months. They stand to gain another HK$10,000 if they find work for a year straight. It is estimated that this program will benefit 6,000 adults.

Earnings under this pilot program will not be factored into the means test for the monthly subsidy of HK$4,195 under the Old Age Living Allowance - subject to an income ceiling of HK$10,710 per month for a single worker. It is hoped that the program will encourage the elderly on welfare to re-enter the job market if they are fit.

Employers will be eligible for a subsidy for each worker aged 40-plus they employ under the existing Employment Programme for the Elderly and Middle-Aged. Chan suggests that contractors bidding for government tenders be given merit points for employing the elderly, and that subsidies be provided to companies to boost training for elderly workers.

Financial Secretary Paul Chan Mo-po, in the 2023 budget, asked the MPF Schemes Authority to study the feasibility of stable-return investment options, by reserving government-issued green and infrastructure bonds as priority investments for the 4 million MPF members. The administration will issue HK$50 billion in silver bonds and HK$15 billion in retail green bonds in the 2024 financial year.

Meanwhile, the SAR is considering doubling the tax deduction for employers' MPF contributions for employees who are aged 65-plus to nudge them to offer jobs to the elderly, and to make voluntary contributions for them. It is hoped this proposal will pass the legislature and take effect from end-March 2025.

The "offsetting" mechanism which allows employers to raid MPF contributions to pay out severance and long-term benefits to retiring employees will be canceled from May 2025. That mechanism has long been criticized for being unfair and unjust.