Hong Kong's seniors face economic fight

HONG KONG, China (CNN) -- Madame Chow recalls the "good life" in mainland China with her husband and two sons. "I was really happy there," Chow said.

After leaving her family in 2001 to take care of her aging father in Hong Kong, Chow found herself working at least 12 hours a day as a cook in order to make ends meet-- but it was difficult. She asked that her real name not be used, over concerns about embarrassing her family.

Mr. Wong says he moved to Hong Kong from the mainland to look for work. He says he was making $900-$1,000 a month as a textile worker in Hong Kong 20 years ago. But before he turned 65, when he would be eligible to receive his employer's contribution to his retirement plan, he was fired without reason, Wong said.

Chow and Wong are among about 1 million elderly in Hong Kong-out of a total population of some 7 million. It's estimated that roughly two out of every five people aged 65 and older live in poverty, said Wilson Ng, organizer of the Grassroots Development Centre, an organization that offers support to the needy. Watch a toilet cleaner describe his life in Hong Kong »

Activists and social scientists say they're concerned about the future of Hong Kong's elderly poor, and they wonder if societal changes will have a negative impact on those who need financial help.

"Although Hong Kong is not without social welfare programs, it remains a society strongly shot through with the neo-liberal culture of market capitalism," said Paul Festa, sociology professor at the University of Hong Kong. "In principle individuals are able to act freely to achieve their desired objectives and if they don't, it is because they failed. This logic tends not to cultivate social sympathy for the poor, except perhaps as objects of charity."

While Hong Kong is often seen as a high-flying center of international finance, it has historically relied on manufacturing to employ its people and become a global commercial power.

During the past decade Hong Kong has moved toward a service-oriented economy. Chua Hoi Wai, business director of the Hong Kong Council of Social Service, said "800,000 people were displaced by the manufacturing industry ... a drop of over 80 percent since the late 1980s." He and other activists believe the loss of jobs from this shift is partly to blame for the issues surrounding the working poor.

Hong Kong's 'three pillars'

To help care for the elderly poor, Hong Kong has developed a "three-pillar retirement protection," said D.C. Cheung, principal assistant secretary of the Labour and Welfare Bureau. Those pillars include the Comprehensive Social Security Assistance (CSSA) scheme -- the government's welfare plan; the Old Age Allowance (OAA) and the Mandatory Provident Fund (MPF) -- Hong Kong's retirement scheme.

In addition to the three pillars, the government provides "heavily subsidized service to the elderly in medical and housing policies," Cheung said. For example, "more than 60 percent of the elders live in subsidized housing, including public rental housing and purchased flats under the Home Ownership Scheme," Cheung added.

Activists argue these plans have too many limitations. The MPF, established in 1995, requires the employee and employer to contribute 5 percent of the employee's monthly salary each, a total of 10 percent. The funds are then transferred to the employee when he or she reaches 65. But those residents well into adulthood and approaching retirement had little or no time to participate as the MPF was formed, said Ernest Chui, a social work professor at the University of Hong Kong. Additionally, for Hong Kong residents earning low salaries, there is little chance to use the plan to accumulate a sizable retirement nest egg, Chui said.

According to the Hong Kong Labour and Welfare Bureau, there were 489,818 recipients of CSSA as of April 2008, a rise from 382,454 recipients in 1998-1999 and it is estimated to account for 9 percent of the government's recurrent expenditure in 2008-2009.

But Ng, from the Grassroots Development Centre, said there are many who meet the income requirements to qualify for CSSA, but because of some other government guidelines they must look for other options.

For example, a government policy established in 1999 requires elderly living with family to go through a means test as an entire family, Ng said. That means test presented Chow with a dilemma when her husband and sons moved to Hong Kong two years ago. Chow could not afford to provide care for her father but in order for him to receive assistance, he had to live alone since Chow's husband and sons had not lived in Hong Kong for a minimum of seven years -- another requirement for receiving aid.

"He's not happy," said Chow when asked about her father, "he cries and tells me if he dies no one will even know."

When need clashes with culture

For the elderly living alone in Hong Kong, a paper must be signed by their children stating the amount they contribute to their parents' daily living. If the children can contribute very little, or nothing at all, "this signing procedure is like a down-grading ceremony for the whole family," said Joseph Woo, manager for Hong Kong Program at Oxfam, "people call [the document] the 'siu jai zhe'," -- Cantonese for what loosely translates as "the shameless son paper."

"[CSSA] is not structured on a contributable system so it's seen as charity ... but receiving assistance if you're in need is a basic right," Woo said.

Receiving CSSA could have been an option for Wong when his small amount of retirement money ran out, but he says his sons refused to sign the "siu jai zhe," saying they have their own dignity to protect. Since then Wong has moved to the mainland where living standards are cheaper. "Whenever I can, I'll save," said Wong, who has cut down to two small meals a day and opts to suck on candy instead of buying cough medicine when he is sick.

"It's not that people do not want to take care of their parents, it's just that they can't," said Lum from Hong Kong University. The elderly's children are now in their 40s or 50s and many are struggling to support their own families, he said.

"CSSA is our basic safety net" and it shouldn't be shamed upon, said Cheung from the Hong Kong government's Labour and Welfare Bureau. A means test is necessary, Cheung said, because CSSA is a non-contributory scheme that relies on public tax money, and needs to be given to those in genuine need.

Besides, Cheung said, Hong Kong's social security programs work "quite well," supporting around 89 percent of the elderly population aged 70 or above as of December 2007. As proof, Cheung pointed to these statistics:

61.5 percent of these elderly are OAA recipients;

20.3 percent are CSSA recipients;

7.4 percent are on Disability Allowance.

There are some elderly who receive both OAA and CSSA, but for those receiving only OAA, the monthly check of $80-$90 per month, in addition to subsidized housing and transportation "is not enough to survive," said Ng from Grassroots Development Centre.

While Hong Kong's single elderly receive about $460 per month in CSSA assistance, the actual amount available for daily expenses under that plan is closer to around $300 each month after figuring in rent, an emergency paper and miscellaneous items, Ng said. Chui from University of Hong Kong had calculated that an individual elderly household will need $423 per month to fulfill daily needs.

A broader approach?

Activists are looking for other solutions to helping Hong Kong's poor, such as the proposed Universal Retirement Scheme, which would include contributions from the government, public and private sectors. Activists say the plan would replace CSSA and OAA for people 65 and older and would eliminate the need for a means test. Many Western countries such as the United States use a contributory, universal program to provide social security.

Hong Kong University's Lum noted that less than 10 percent of the elderly in the United States are living below the poverty line. On the other hand, many countries in the West are struggling with an aging population and a security fund that is running dry.

In the meantime, Wong says he has about $1 left in his bank account and is relying on renting out his home in the mainland to provide for him temporarily. Chow and her family are also pinching pennies as the four of them try to live on about $770 a month.

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