Provisional Legislative Council

PLC Paper No. CB(2) 858
(These minutes have been
seen by the Administration

Ref : CB2/PL/WS

Panel on Welfare Services

Minutes of Meeting
held on Friday, 14 November 1997 at 10:45 am
in Conference Room A of the Legislative Council Building

Members present :

Hon WONG Siu-yee (Chairman)
Hon CHAN Choi-hi (Deputy Chairman)
Hon LEE Kai-ming
Hon Mrs Elsie TU, GBM
Hon Mrs Peggy LAM, JP
Hon CHAN Yuen-han
Hon Frederick FUNG Kin-kee
Hon Howard YOUNG, JP
Hon YEUNG Yiu-chung
Hon LAU Kong-wah
Hon CHOY Kan-pui, JP
Hon TAM Yiu-chung, JP
Hon CHOY So-yuk

Members absent :

Hon David CHU Yu-lin
Hon HO Sai-chu, JP
Hon Eric LI Ka-cheung, JP
Dr Hon LEONG Che-hung, JP
Hon Mrs Sophie LEUNG LAU Yau-fun, JP
Hon MOK Ying-fan
Hon HUI Yin-fat, JP
Hon LO Suk-ching

Public officers attending :

Item III

Principal Assistant Secretary for Education and Manpower

Item IV

Mr Robin GILL
eputy Secretary for Health and Welfare (3)

Mr Andrew LEUNG, JP
Director of Social Welfare

Miss Victoria TANG
Principal Assistant Secretary for Health and Welfare (2)

Mrs Louise WONG, JP
Deputy Director of Social Welfare (Administration)

Item V

Mr Robin GILL
Deputy Secretary for Health and Welfare (3)

Miss Victoria TANG
Principal Assistant Secretary for Health and Welfare (2)

Mrs Nancy TSE
Assistant Director of Social Welfare (Family and Child Welfare)

Attendance by invitation :

Item III

Hong Kong Social Security Society
Dr Henry MOK
Dr Fernando CHEUNG
Miss LAU Ka-yee

Hong Kong Council of Social Service (HKCSS)
Mr FUNG Ho-lup

Vice-chairperson, Committee on Social Security, HKCSS
Mr Mark LI

Member, Committee on Social Security, HKCSS
Ms Lilian LAW

Secretary, Committee on Social Security, HKCSS

Hong Kong Federation of Trade Unions
Mr LEUNG Fu-wah

Mr WONG Kwok

Executive Secretary
Miss TSANG Kwan

Senior Secretary
Clerk in attendance :

Ms Doris CHAN
Chief Assistant Secretary (2) 4

Staff in attendance :

Ms Joanne MAK
Senior Assistant Secretary (2) 4

I.Confirmation of minutes of meetings held on 12 September, 3 and 21 October 1997 and matters arising

(PLC Paper Nos. CB(2)559, 560 and 561)

1.The minutes of the meetings held on 12 September, 3 and 21 October 1997 were confirmed.

Request for immediate release of additional monthly payment of $380 to elderly recipients of Comprehensive Social Security Assistance (CSSA)

2.Miss CHAN Yuen-han expressed disappointment at the decision of the Office of the Chief Executive (CE) not to release the additional CSSA monthly payment of $380 until 1 April 1998. She also regretted that CE did not accept members’ request for a meeting with him to discuss the issue. Members noted that the Secretary for Health and Welfare (SHW) would hold a meeting with them on 2 December 1997 to exchange views on the elderly policy. Mr Howard YOUNG considered that members could further consider the course of action to take after attending the meeting with SHW.

3.Members did not support Mr CHAN Choi-hi's proposal for a motion to express regret about CE's decision.

II. Date of next meeting and items for discussion

4.Members agreed to discuss the following items at the next meeting to be held on 12 December 1997 -

  1. unemployment of fresh social work graduates;

  2. survey study on elderly CSSA recipients; and

  3. subvented residential care places for the elderly.

III. Old age pension

[Paper Nos. CB(2)405(01), CB(2)556(01) - (04) and CB(2)610(01) - (02)]

5.Miss CHAN Yuen-han pointed out that the Mandatory Provident Fund (MPF), to be introduced shortly, could not provide protection to the following categories of people -

  1. 800,000 to 1 million elderly people who had retired or were going to retire;

  2. people outside the workforce, including 600,000 housewives and 400,000 people with a disability; and

  3. the low-income earners.

6.She pointed out that due to the absence of a retirement protection scheme, many elderly people who failed to find employment after retirement or who did not have much personal savings had to rely on CSSA. As a result, CSSA caseload had increased considerably thereby creating a financial burden on the Government. She considered that the provision of retirement protection in the form of an old age pension scheme (OPS) could save the Administration heavy expenditure on CSSA and also ensure that the elderly could enjoy a dignified and financially secured old age. She said that the Hong Kong Federation of Trade Unions (FTU) was in support of a two-tier retirement protection scheme under which OPS and MPF were implemented in parallel.

7.Miss CHAN further said that the Administration had the responsibility to provide a safety net for the financially vulnerable members of the community, and to plan ahead a retirement protection scheme for the ageing population. She was disappointed to find that there was only one representative from the Administration attending the meeting and doubted whether the Administration was serious in listening to members and deputation's views.

8.At the invitation of the Chairman, Dr Fernando CHEUNG of the Hong Kong Social Security Society (HKSSS) explained that the MPF Scheme had the following shortcomings -

  1. the accrued benefits obtained by contributors on retirement would be too little to provide adequate retirement protection to them;

  2. the Scheme could not provide immediate retirement protection to people who had already retired; and

  3. the Scheme would not provide retirement protection to those who were outside the workforce (e.g. housewives), the low-income earners, the unemployed, people with a disability and casual workers.

9.Dr CHEUNG considered that the financial position of Hong Kong was capable of providing a community-wide retirement protection system for the Hong Kong people. He said that HKSSS, FTU and the Hong Kong Council of Social Service (HKCSS) were all in support of a comprehensive retirement protection scheme comprising both MPF and a social security programme. The merits of such a scheme included -

  1. adequate retirement protection would be provided to the entire population;

  2. immediate financial assistance would be provided to the poor elderly;

  3. Government expenditure on CSSA would be reduced in the long term by reducing the number of CSSA recipients;

  4. no extra cost would be incurred to the employers and employees as their contribution rates to the two-tier retirement protection scheme remained as 5%; and

  5. investment risk borne by OPS contributors would be far reduced.

10.Miss LAU Ka-yee of HKSSS highlighted that about 600,000 housewives could not benefit at all from the MPF Scheme. She pointed out that there were at present about 800,000 low-income female workers and even if they worked continuously for 47 years, on retirement they would only receive a return at a level lower than the current rate of CSSA payment. Miss LAU said that given the life-span of a woman's career was generally only 27 years, the MPF Scheme would only let female workers get a return equivalent to 20% of their wages on retirement.

11.Mr FUNG Ho-lup of HKCSS tabled a paper providing statistical information on the educational background of people aged 40 to 64 in Hong Kong -

  1. 180,000 had not received education;

  2. 700,000 had only finished primary education; and

  3. about 250,000 had completed junior secondary education.

12.Mr FUNG pointed out that these 1.15 million people, being limited by their educational background and their age, had a very low chance of getting employment or well-paid jobs. Therefore, they would not be able to contribute much to the MPF Scheme and in return would not get a level of benefits high enough to provide adequate retirement protection to them. Based on a survey conducted, the median incomes for people aged 55-59 and 60-64 were 8,000 and 5,900 respectively.

13.Mr LEUNG Fu-wah of FTU supplemented that FTU had since 1992 been advocating a two-tier system comprising both OPS and MPF to provide community-wide retirement protection to Hong Kong people.

14.Mr Howard YOUNG concurred that the MPF Scheme alone would not provide adequate retirement protection to Hong Kong people. However, he had reservation about the viability of the "tripartite contribution scheme" as proposed by HKSSS. He proposed that, instead of adopting a contributory method, the Government should set up a trust using the annual surplus of the fiscal reserves to finance the primary social protection scheme.

15.Dr Henry MOK of HKSSS pointed out if the Government maintained its current strategy of complementing MPF by the CSSA Scheme, would have to bear heavy financial burden in the long term. He said that when the ageing problem of the population reached the peak, expenditure on CSSA would cost the Government an amount equivalent to contribution at a rate of 10% to OPS. However, if the Government adopted the tripartite contributory method for OPS, the Government would only have to contribute 2% even for the next 50 years. In addition, OPS had been implemented in many countries such as the Mainland and the north European countries. He considered that given the increased longitivity of Hong Kong people, there was a need to implement OPS as soon as possible. Mr Mark LI of HKCSS added that the current level of CSSA payment was inadequate. He pointed out that the International Labour Organization had stipulated that the amount of pension should not be less than 40% to 45% of the average monthly wage of a male labourer, which was far more than the current level of CSSA payment.

16.In response to Mr CHAN Choi-hi's enquiry, Mr LEUNG Fu-wah said that FTU had no strong views as to whether the provident fund should be centrally or privately managed. However, Dr Henry MOK said that HKSSS did not support a privately managed MPF system. It supported a central provident fund system similar to the mode of operation of the Land Fund. He further invited members’ attention to Appendix I of the HKSSS's submission which had set out in detail the shortcomings of a privately managed MPF system.

17.Mrs Elsie TU enquired whether everyone, regardless his amount of salary, could receive pensions under the two-tier retirement protection scheme. In reply, Dr Henry MOK said that HKSSS had proposed the following -

  1. people who had contributed to the scheme would get back their accrued benefits; and

  2. people who had made no contribution to the scheme could receive pension by proving that the average asset value of their household members was less than $200,000.

18.Mr LEUNG Fu-wah also explained FTU's proposal which consisted the following -

  1. those who had contributed for less than 10 years would be required to give on asset declaration for consideration of their eligibility for the pensions;

  2. those who had contributed for 11 to 15 years would be given pensions at a level of 29%; and

  3. those who had contributed for over 40 years would be given pensions at a level of 35%.

    Mr LEUNG explained that the rationale of FTU was that the level of returns a person got would be directly related to the contributions he had made.

19.At the Chairman's invitation to respond, the Principal Assistant Secretary for Education and Manpower (PAS(EM)) explained that the Administration had studied various options before deciding to adopt MPF which was considered to suit Hong Kong best. He pointed out that CSSA was available to those who had immediate financial needs, and that the Administration was not going to re-open OPS since the consultation exercise done in 1994 had shown clearly that there was no real desire in the community for OPS along the lines proposed in the Government consultation document. However, he undertook to convey members’ views to the Administration for consideration.


20.However, members generally considered that the Administration had not addressed the points raised by the deputations concerning the lack of retirement protection provided to the elderly, housewives and people with a disability under the MPF Scheme and also the problem of financial burden caused by those people to the society. Dr Fernando CHEUNG added that a recent media survey had actually found that 70% to 80% of the respondents were in support of OPS whereas only 6% opted for MPF. Ms CHOI So-yuk also expressed support for a two-tier retirement protection scheme and urged the Administration to explore the various proposals.

21.Dr Henry MOK considered that the Administration had distorted the public views given in the consultation exercise on OPS in 1994, and suggested the Panel or the Provisional Legislative Council to set up an independent assessment committee to look at those comments again. He offered that HKSSS could provide technical support for the analysis. In response, PAS(EM) stressed that the Administration did not distort the public views given in the consultation exercise. He also pointed out that the examination of submissions on OPS was above board and transparent.

22.Summing up the discussion, the Chairman said that the Panel would follow-up the matter as there was consensus that the Administration should further study the matter. He requested and PAS(EM) agreed to convey members' and deputation's views to the Administration and give a reply to the Panel as to whether or not it would re-consider OPS.


IV. A new funding formula for subventing welfare non-governmental organisations (NGOs)

[Paper Nos. CB(2)556(05) and CB(2)610(03)]

23.The Director of Social Welfare (DSW) gave a presentation on the Administration's review of the social welfare subvention system. He briefed members on the background of the review and explained that the Administration's proposal included, inter alia, Funding and Service Agreements (FSA) and the setting up of a service performance monitoring system based on a set of service quality standards. The welfare services to be provided and the required performance standards ( in terms of quality and performance outputs as well as essential service requirements) would be defined in an FSA. Then both the Social Welfare Department (SWD) and NGOs would have to conduct Service Performance Assessments to examine how far they were meeting the various standards. It was proposed that each service unit would have to conduct self-assessment first and the Service Performance Unit of SWD would conduct external assessment. Any service units found not complying with the necessary standards would be required to improve the service.

24.DSW said that training would be provided to the staff of NGOs to enable them to implement the Review's recommendations. The training activities would include awareness training on the outcomes of the Subvention Review, management of change training and so on.

25.DSW said that in view of little support for the Unit Grant approach, the Administration had proposed a fixed funding formula which was based on Mid-Point Personal Emoluments (PE). The new funding formula would be applicable to about some 150 NGOs. By the proposed funding formula, subvention for each service unit would be calculated at Mid-point PE based on the recognised staffing structure with a 2% deduction for natural wastage/vacancy in the sector. An additional factor of 6.1% covering the average Provident Fund contribution would be added. The Government would adjust the PE funding in line with the annual civil service salary adjustment. This PE grant, once fixed, would be managed and used by agencies concerned with autonomy and maximum flexibility. There would be no further provision for incremental creep nor topping up for deficits. The agencies were allowed to accumulate unspent funds as their reserves subject to a maximum of 20% of the respective agencies’ annual subvention allocation.

26.DSW further explained the transitional arrangements for agencies with a staff cost below Mid-Point PE, which would be funded at actual PE, capped by Mid-Point PE during Year 1 and Year 2. They would be funded at Mid-Point PE from Year 3 onwards or whenever Mid-Point PE was reached in Year 1 and Year 2. As regards those agencies operating at a staff cost above Mid-Point PE, they would be funded at actual PE or the predetermined yearly financial cap, whichever was the less. They would be funded at Mid-Point PE in Year 6 or whenever they dropped to Mid-Point PE during Year 1 to Year 5. DSW said that new service units would be funded at actual PE (capped at Mid-Point) during years of phased implementation, and funded at Mid-Point PE from Year 3 onwards.

27.DSW emphasized that it would be voluntary for NGOs to join the new funding system. However, the transfer to the new system would be irreversible. Agencies might join the new funding scheme in any year and subvention funding would be subject to the Mid-Point PE or financial cap prevailing in the year of joining the scheme. In addition, agencies were free to determine their staffing structure and hiring part-time/temporary staff subject to the basic staffing requirements in the FSA. They were also free to delink or partially delink from civil service pay scales. In addition, there would be free virement flexibility between PE and other charges, and between subvented units. On the other hand, upgrading of posts to the directorate pay scale or enhancement of pay scale would require the formulation of clearly defined performance indicators for appraisal by the NGO boards. In addition, NGOs were not expected to offer remuneration package to staff which was more favourable than that offered by the Government to comparable grades in the civil service. Accumulated subvention surplus would be restricted to be spent on subvented service units operated by the NGO.

28.DSW pointed out that the recognised level of rent and rates would continue to be subvented in full. He explained that by the new funding formula, NGOs would know exactly the subvention level on joining the scheme, enjoy full flexibility for virement of funds and appointment of staff. The new funding formula would enhance the accountability of NGOs in resources management. As for the new service performance monitoring system, DSW said that the merit of the system was that output performance rather than input control would be emphasised.

29.DSW informed members that wide consultation had been conducted within the sector on the proposed new funding formula. Briefing sessions had been held with representatives of staff unions/associations, NGO Boards and the Alliance on Concerns for Social Welfare Services Development. A questionnaire survey was being conducted to collect the sector's views on the proposals. He emphasised that the Administration would not push ahead the new proposals and it welcomed any suggestions put forward.

30.As the proposed subvention system would be further discussed in detail at the special meeting scheduled for 26 November 1997, members agreed to end the discussion at this point.

V. Social problems caused by separation of children from their mothers who had not right of abode in Hong Kong

[Paper No. CB(2)556(06)]

31.Mrs Elsie TU expressed concern about problems faced by split families caused by separation of children from their mothers who had no right of abode in Hong Kong. She noted that the fathers of these families were either unable to look after the children when they were away for work, or chose to quit their jobs and went on CSSA. Mrs TU considered that it was very dangerous for the children being left alone at home; but it was also undersirable for the fathers to quit their jobs and go on CSSA as this would be creating a heavy financial burden on the public. She said that in some cases the fathers were unable to look after the children because they were too old or suffering from serious illness. This had forced the mothers come to Hong Kong, legally or illegally, to look after the families and, if they were legal immigrants, they probably lived on CSSA as well. Mrs TU summed up that there were the following problems associated with these split families -

  1. children were often left behind at homes without anyone to look after them and this was very dangerous for them;

  2. children of families on CSSA felt inferior in schools because they were living at a lower level of livelihood than their peers; and

  3. these families relying on CSSA had created financial burden to the Government.

32.The Deputy Secretary for Health and Welfare (3) DS(HW)3 outlined the facilities and support available to the children and parents of these split families in Hong Kong. He said that the supportive services were being provided to the children either through child care centres, after-school care programmes operated by NGOs, family aide workers who helped in home management, and family services centres which provided basic counseling and treatment services for the families concerned and dealt with individual problems which might arise.

33.The Assistant Director of Social Welfare (Family and Child Welfare) (AD(FCW)) said that SWD would provide full support to these split families to help them overcome their daily living, psychological or other adjustment problems. The Department was presently handling 409 cases involving children who had been separated from their mothers who had no right of abode in Hong Kong. The cases could be categorised into the following kinds -

  1. the child had been born in the Mainland and was later allowed to stay in Hong Kong with a single entry permit whereas the permit had yet to be granted to the mother; and

  2. the mother's permit expired after giving birth to her child in Hong Kong and she had to return to the Mainland.

AD(FCW) pointed out that some of the problems involved the immigration policy and arrangements related to Right of Abode and were therefore quite complicated.

34.Mrs Elsie TU considered that the Administration should liaise with the Mainland authorities and seek an agreement that when a woman was granted a single entry permit to Hong Kong, her children should also be granted the same permits to Hong Kong. If the mother had entered Hong Kong illegally or on a two-way permit and gave birth to a child here, she should be required to return to the Mainland together with her child. The mother could come to live in Hong Kong only when both she and her child were given single-entry permits. She considered it unacceptable for families to be separated for years and was concerned about the social problems caused by these split families. She urged the Administration to rectify the relevant policy as soon as possible.

35.The Chairman asked if the Health and Welfare Bureau (HWB) would take the lead to liaise with the Security Bureau (SB) or the Mainland authorities to discuss how to solve the problems. In response, DS(HW)3 undertook to convey members’ views to SB for their consideration. AD(FCW) added that SWD and the Immigration Department were also concerned about the problems. SWD would liaise with and provide professional assessment to the Immigration Department to assist them in considering giving special approval to individual cases on compassionate grounds to allow some women holding two-way entry permits to stay in Hong Kong for a longer period after expiry of their permits. However, AD(FCW) stressed that the final decision governing these matters rested with the Immigration Department. At the Chairman's request, AD(FCW) agreed to provide information on the number of applications which had been approved on compassionate grounds.



36.Mr Frederick FUNG said official figures revealed that 66,000 children in the Mainland were found eligible to be admitted into Hong Kong in accordance with Article 24(2)(3) of the Basic Law, and asked what concrete measures would be taken to handle these 66,000 eligible children who would be admitted into Hong Kong in the next few years and probably would be unaccompanied by their mothers on arrival. In response, DS(HW)3 considered that it should not be assumed that all these children would need social welfare assistance. However, Mr FUNG considered that the Administration should recognise the fact that many problems were associated with split families such as youth problems. He requested the Administration to take a preventive approach in dealing with this issue and to liaise with the Mainland authorities for a policy to prevent any more separation of children from their mothers because the latter had no right of abode in Hong Kong.

37.The Chairman enquired if there was a rising trend for requests made by these split families for welfare assistance. AD(FCW) replied that she need to confirm on this point. Mr FUNG pointed out that among those single parent families on CSSA, the percentage of families with male parents had increased from a single digit percentage to 25%. He believed that the increase was due to the rise in number of split families of which the mothers had no right of abode in Hong Kong.

38.Mrs Elsie TU commented that the Administration was irresponsible on this matter. She said that like the Fire Services Department which was not only responsible for putting out fire but also for preventing fire, the Government should deal with the root of the problem and work out solutions. The Chairman concurred and requested HWB to play an active role to liaise with SB and provide detailed information to SB about the problems created by these split families.


39. The meeting ended at 12:45 pm.

Provisional Legislative Council Secretariat

12 January 1998