$3b working family stipend broached

It's set to benefit 200,000 low-income families.

According to a report, the Government has proposed introducing the Low-income Working Family Allowance to curb inter-generational poverty by encouraging self-reliance.

Delivering his 2014 Policy Address today, Chief Executive CY Leung said the plan, estimated to cost $3 billion a year, will benefit more than 200,000 low-income families, or 710,000 people.

"Our poverty-alleviation policy is to encourage young people and adults to become self-reliant through employment, while putting in place a reasonable and sustainable social security and welfare system to help those who cannot provide for themselves."

He said priority should be accorded to helping non-Comprehensive Social Security Assistance working families living below the poverty line, especially those with youngsters at school.

"Despite the protection offered by the statutory minimum wage, many grassroots workers, as the sole breadwinners of families, still bear a heavy financial burden. Providing them with suitable assistance and encouraging them to remain employed will help keep them from falling into the CSSA safety net.

"Special attention must be paid to the children and youths of these families. Offering them appropriate support promotes upward mobility and breaks the vicious cycle of inter-generational poverty."

He said the basic allowance will be granted on a family basis and tied to employment and working hours to encourage self-reliance. More allowance will be granted to those who work more. Families with eligible children and young members will receive additional allowance.

To ensure effective use of resources, an income test and an asset test with a lower threshold will be introduced, he said, adding the scheme’s structure will be as simple and easy to understand as possible, with appropriate safeguards against abuse.

"A beneficiary family, which is not on CSSA, must have at least two members, with at least one working for a reasonable number of hours to maintain the principle of self-reliance. For the asset test, the Government proposes to broadly adopt the asset limits for public rental housing applications. There will be no minimum residence requirement. All eligible Hong Kong residents may apply."

The Chief Secretary and the Secretary for Labour & Welfare will announce the details later. Public feedback will be sought in the coming months, with the aim of implementing the scheme next year.