Hong Kong

The social security system in Hong Kong is regulated by the following laws: (i) on social assistance, of 1971; (ii) on universal old-age and disability allowance, of 1973; (iii) on universal higher-rate disability allowance, of 1988; (iv) on comprehensive social security assistance, of 1993; and (v) on mandatory provident funds[1] of 1995 as implemented in 2000. Said laws provide for a universal old-age and disability allowanced program, mandatory occupational benefit (mandatory provident fund schemes) and a social assistance system.

The universal allowances and comprehensive social security assistance covers all residents of Hong Kong, while the mandatory occupational benefit covers all employees under contract for 60 days or more (employees in the catering and construction industries who are employed for periods shorter than 60 days or are covered on a daily basis) and self-employed persons between ages 18 and 65. The following categories of people are excluded from the system: self-employed hawkers; household workers; persons covered by statutory pension plans or provident funds, such as civil servants or teachers; members of occupational retirement plans who are granted exemption certificates; foreign workers in Hong Kong for less than 13 months or covered by another country's retirement system.

Funds are contributed by both the insured person and its employer in the following proportions: (i) Insured person: at least 5% of monthly earnings (salary, leave pay, commissions, gratuities, bonuses, and housing allowances) for mandatory occupational benefit; and (ii) Employer: at least 5% of monthly payroll (salary, leave pay, commissions, gratuities, bonuses, and housing allowances) for mandatory occupational benefit. In both cases, voluntary additional contributions are permitted.

In case of self employed person, the contribution is of at least 5% of monthly or yearly income for mandatory occupational benefit. Voluntary additional contributions are also permitted.

The universal allowances and comprehensive social security assistance is supported entirely by the government, so no contributions are made either by the injured party or by the employer.

The old-age pension is available upon compliance with the following conditions: (i) Lower-rate allowance: for persons aged 65 to 69 who have resided in Hong Kong for at least 7 years, including 1 year of continuous residence immediately before claiming the benefit.The allowance is income-tested (monthly income must not exceed HK$6,360 (approximately USD 815) if single or HK$9,940 (approximately USD 1,270) if married) and asset-tested (assets must not exceed HK$171,000 (approximately USD 22,000) if single or HK$258,000 (approximately USD 33,000) if married); Higher-rate allowance: for persons aged 70 or older who have resided in Hong Kong for at least 7 years, including 1 year of continuous residence immediately before claiming the benefit.

The mandatory occupational benefit is available for both men and women at age 65.

 Early retirement is possible for both men and women at age 60 if ceasing employment permanently. Additionally, funds may be withdrawn before retirement if the member leaves Hong Kong permanently.

An old-age benefit (comprehensive social security assistance) is available for persons aged 60 or older who have resided in Hong Kong for at least 7 years. The benefit is income-tested and asset-tested on an individual basis if living alone; if living with other family members, the total income and assets of all family members are taken into account for determining eligibility.

The old-age benefits consist of: (i) an old-age allowance (universal) of HK$1,000 (approximately USD 130) per month; (ii) a mandatory occupational benefit consisting of a lump sum of total employee and employer contributions plus accrued interest; and (iii) a comprehensive social security assistance with ranges from HK$2,590 (approximately USD 330) to HK$4,420 (approximately USD 570) per month for those persons living alone or HK$2,445 (approximately USD 310) to HK$4,050 (approximately USD 520) per month for those living with other family members, depending on the recipient's health and need for constant attendance; plus special grants to meet the specific individual needs of recipients.

Universal allowances and comprehensive social security assistance are administered by the Social Welfare Department (http://www.swd.gov.hk).

The mandatory occupational benefits is supervised by the Mandatory Provident Fund Schemes Authority (MPFA) (http://www.mpfa.org.hk), under an executive director and an advisory committee. The MPFA is responsible for registering provident funds and ensuring that approved trustees administer the provident funds in a prudent manner.



[1] Mandatory provident funds in Hong Kong are mandatory occupational funds that are privately run and should not be confused with publicly run national provident funds found in other countries.

 

Source:Social Security Programs Throughout the World: Asia and the Pacific, 2010, available at http://www.ssa.gov/policy/docs/progdesc/ssptw/2010-2011/asia/index.html

 
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