One in five Hong Kong residents lives in poverty

But Leung says eliminating poverty is not a government goal.

Hong Kong has announced its first benchmark to measure poverty and has discovered that one in five of its residents qualify as poor. Lawmakers praised the move as a step towards tackling worsening inequality in one of the world’s richest nations.

The poverty line is defined at half of the median household income. It reveals that 1.31 million people in Hong Kong were living in poverty or a rate of 19.6% in 2012.

Households with children and elderly families made up the largest number of individuals living in poverty.

Chief executive Leung Chun-ying said implementing the poverty line is unprecedented but noted, however, that eliminating poverty is not on the government's agenda.

"To completely eliminate the wealth gap and the problem of poverty is not possible and should not be one of our goals," he said.

Lawmakers quickly goaded the government to take action after the poverty numbers were revealed. Labor Party chairman Lee Cheuk-yan said government should raise the minimum wage and should also implement subsidies for those with low incomes so that people that come out to work can really support their families,

Income distribution measured by the Gini Coefficient rose from 0.525 to 0.537 over the decade to 2011, according to the Census and Statistics Bureau. The Gini Coefficient measures inequality on a scale of zero to one with one indicating the highest inequality.