Information Paper for
Legislative Council Public Service Panel
Monitoring Mechanism over the Repayment of Housing Loan

---

Introduction
Housing Loan Scheme
Monitoring Mechanism
Default Cases
Review
Summary
Breach of Terms and Conditions for Housing Loan Scheme

---

Introduction

This paper sets out the details of the Housing Loan Scheme and the mechanism in place to monitor repayments of loans taken out under the Scheme.

Housing Loan Scheme

2. The Housing Loan Scheme was introduced in 1981 to assist civil servants with at least ten years of pensionable service, who have not joined other home purchase schemes, to acquire their own accommodation. Eligible officers below the age of 45 may apply for a loan under the Scheme to purchase a property in Hong Kong, but they have to forfeit their eligibility for all other civil service housing benefits and are required to comply with the live-in requirement. Eligible officers aged 45 and above or within ten years of their statutory age of retirement may draw the loan to purchase a retirement home either overseas or locally.

3. Loans granted under the Housing Loan Scheme are secured against the officer's earned pension. Officers are required to sign an undertaking to enable the Government to deduct any outstanding loan from their pensions in case of any default on their part.

Monitoring Mechanism

4. Officers who joined the Housing Loan Scheme before 1990 are required to report to the Government any change to the title deed of the property within 14 days of the change. They are required to repay their outstanding loan to the Government immediately on sale of the property. Officers who join the Scheme on or after 1 October 1990 are required to draw up a legal charge on the property for the benefit of the Government. The effect of this is that they cannot effect any change to the title of their property without obtaining Government's prior approval. They are also required to repay the outstanding loans to the Government immediately upon sale of the property.

Default Cases

5. There is no evidence to suggest that abuses of the Housing Loan Scheme are in any way widespread. Over the past five years, nine officers have failed to repay their outstanding loans in time. Details of these cases are in the Appendix.

6. Government takes a serious view of officers breaching the rules and regulations of the Scheme. Where breaches are established, action will be taken against the officer concerned. This includes full repayment of any outstanding loan, disqualification from all other forms of civil service housing benefits, and disciplinary proceedings or legal proceedings as appropriate.

Review

7. The Housing Loan Scheme was reviewed in 1990 and more recently in 1995. After the review in 1990, control on the sale of property was tightened up by the introduction of the requirement for a charge to be drawn up on the property for the benefit of the Government.

8. The review in 1995 confirmed that the requirement of a legal charge is effective and suggested that where the property is in places where execution of a legal charge in favour of the Hong Kong Government is not possible, the title deed and/or other documents showing ownership of the property should be deposited with the Government. This additional control was introduced with effect from December 1995.

Summary

9. The Housing Loan Scheme is closed to officers appointed to the civil service on or after 1 October 1990 and those who have already joined one of the other home purchase schemes. Loans are secured against the officer's earned pension. Government can deduct the amount of any outstanding loan from an officer's pension in case of any default in repayment. With the introduction of the legal charge requirement in 1990, properties acquired under the Scheme cannot be sold without the prior approval of the Government.

Civil Service Branch
17 February 1997

---

Appendix

Breach of Terms and Conditions for Housing Loan Scheme

Not to Repay Outstanding Loan to Government -

---