Faced with a global economic meltdown that has sent markets crashing, Chief Executive Donald Tsang Yam-kuen decided the last thing his government needed was controversy over the old age allowance.
He announced the old age allowance - commonly known as 'fruit money' - would be raised to HK$1,000 for those aged 65 or older, with no means test.
Hong Kong has 870,000 people aged 65 or over. Currently, about 475,000 of them receive an old age allowance at a total cost this year of HK$3.9 billion.
A single person aged between 65 and 69 who is not already receiving a social security payment is entitled to HK$625 per month, provided he or she is earning less than HK$5,910, or has less than HK$169,000 in assets. The income and asset limits for a married couple are HK$9,740 and HK$254,000, respectively.
There have been calls from the community to raise the allowance to HK$1,000, and the Democratic Party and the Democratic Alliance for the Betterment and Progress of Hong Kong campaigned on the issue in the Legislative Council election. But the government was reluctant to budge, arguing that the increase would become a heavy financial burden in 25 years' time.
Financial Secretary John Tsang Chun-wah said in his budget speech this year that the number of elderly people would increase 2? times to 2.17 million by 2033.
Even at the current rate, funding the allowance for that many recipients would cost HK$9.7 billion annually.
