Comment on the strength and weakness of the social security system in Hong Kong

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Comment on the strength and weakness of the social security system in Hong Kong

Introduction

Although Hong Kong is a developed city in the world, there are still many people in HK living under poverty. Most of the poor are the elderly, disabled, single parent family and unemployed. Moreover, the problem is worsening because of the 150 immigrants per day from the mainland China.  They cannot live on their own especially in this economic downturn. They need the help from the government to through their hard time.

Social security is a form of social welfare provided by the government. It is the societal and collective measure to provide security to people of the community against certain risk in and contingencies of life (e.g. retirement, accidents, misfortune, maternity, illness, death, poverty, disability etc.)

It provides both financial and psychological security to people of the community against certain risks or contingencies in life. In the financial aspect, it provides direct cash subsidy. In the psychological aspect, the money may be given to the needy through the social workers who can offer mental support for them.

In this paper, I will first briefly describe the key events of development of social security in HK which is the history of the social security system. Then, I will introduce the three models of the system and the scheme under each model of it. Next, I will emphasis on the strength and weakness of the system and finally some comment and suggestions on this topic.

Development

Before the Second World War, Social welfare services were mainly provided by the non-government organizations and voluntary bodies, largely religious. It provided material relief such as food to those who are in urgent needs only. No social security system was introduced at that time in HK.

At the post war period, the government started to take responsibility in the social welfare provision. In 1948, the Social Welfare Office was established in Hong Kong which was forced by circumstances, that is, the extreme level of poverty and destitution to provide emergency relief in kind rather than in cash. It was the first time the Hong Kong government to offer public assistance which is extremely restricted.

In 1966, Lady Williams suggested for carrying out social insurance scheme because of the extended family system was breaking down, family size is getting smaller and smaller, the young were no longer able to carry out the traditions of caring for the old, the disabled or the need. However, the government rejected the proposal due to the fear of complexity and the huge cost.

 In 1971, Hong Kong government finally introduced the Public Assistance Scheme which was mean-tested and would deliver benefits in cash. It was the first time that the government took over the responsibility for cash assistance from the voluntary agent. However, the provisions were hardly generous and the social welfare in HK was still very narrow. For the people who were beyond working age, unable to work could apply for the assistance, at low level. The schemes later included the unemployed registered for work. In the early years, the number of claimants had grown considerably. Most of them were the elderly with little or no support from their families. And the benefits had been increased and the range of circumstances covered had been extended.

 In 1973, the big bang period, the government introduced the flat rates Special Needs Allowances (Old Age Allowance, Disability Allowance) for elderly infirm and severely disabled. It was later renamed “Social Security Allowances”. No contribution tests and no tests of means were required. The recipients could also apply for other public assistances. The gradual lowering of the Old Age Allowance eligibility from 70 to 65 in 1988, more people with special need could be helped and the Social  Security Scheme in Hong Kong is becoming more well-round. The government continued to take more parts in the social welfare, its spending on the allowances kept on increasing rapidly

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 And in 1992, the government issued a consultation paper on the set up of a community-wide retirement protection system in Hong Kong. The paper proposed that 5% contribution of the employees’ salary and 5% contribution from the employers, with portable accrued benefits when changing jobs. And the payment would be obtainable at the retirement age (65 of age), or payable only under other special situation, such as emigration, total disability, health ground or death. This is actually the well known M.P.F. However the public rejected it in a 3 month consultation period about the scheme.

At the same ...

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