Who is poor in Hong Kong? Chief secretary Carrie Lam's comment at poverty summit sparks debate over definition

ELIZABETH CHEUNGelizabeth,cheung@scmp.com

PUBLISHED : Monday, 12 October, 2015, 10:50pm

UPDATED : Monday, 12 October, 2015, 10:50pm

Elderly people receive around HK$10,000 a month, but half goes to pay government rates and management fees. Photo: Nora Tam

A debate has been raised on whether to include a person's assets in calculating whether they fall under the poverty line, with experts saying their inclusion still might not fully reflect one's actual wealth.

Chief Secretary Carrie Lam Cheng Yuet-ngor set off dialogue at the Commission on Poverty Summit on Saturday when she said the definition of the poverty line, which only considers a household's income but not its assets, could be seen as "exaggerating the poverty condition in Hong Kong", implying that owning property is a form of wealth.

The government's poverty line is drawn at half the median household income in Hong Kong and is adjusted by household size. Those who fall below it are considered poor.

According to official figures, the number of impoverished residents in the city fell by 1 per cent to 962,000 last year compared to 2013. However, the number of poor elderly people rose 3 per cent from 285,000 to 294,000.

Chief Secretary Carrie Lam Cheng Yuet-ngor (left) and Chief Executive leung Chun-ying meet the media after Commission on Poverty Summit at Central Government Offices in Tamar. Photo: Jonathan WongDr Andy Kwan Cheuk-chiu, director of the ACE Centre for Business and Economic Research, suggested assets should be included to measure a person's wealth.

"If elderly people take reverse mortgages on their property, they still earn income," Kwan said.

Under the reverse mortgage programme, people aged 55 or above can use their property to borrow money from a bank and need not repay the loan during their lifetime.

Nelson Chow Wing-sun, a professor of social work at the University of Hong Kong and an expert on social security, said assets have not been counted towards any poverty lines around the world because monetary values could vary widely by market.

The number of poor elderly people rose 3 per cent from 285,000 to 294,000. Photo: Sam TsangChow said the reverse mortgage scheme, launched in 2011 to provide alternative financial resources to the city's elderly people, was "not popular".

"Elderly people receive around HK$10,000 a month, but half goes to pay government rates and management fees," he said. "In addition to losing their property, they might find a reverse mortgage inadequate."

Peter Cheung Kwok-che, the welfare sector lawmaker and a commission member, said more discussion was needed to decide whether to include assets.

Cheung said income alone might illustrate the poverty situation, but the government could also ask people about their savings to get a clearer picture.

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