LCQ19: Improving Working Family Allowance Scheme
26.4.2023

Following is a question by the Hon Holden Chow and a written reply by the Secretary for Labour and Welfare, Mr Chris Sun, in the Legislative Council today (April 26): Question: Some members of the local community have relayed that some families applying for the Working Family Allowance Scheme (WFA Scheme) fail to meet the working hour requirements under the WFA Scheme due to various reasons (such as being unable to work for longer hours because of the need to take care of children and the elderly), resulting in such families being ineligible for the WFA Scheme or granted eventually an amount which is just a drop in the bucket. In this connection, will the Government inform this Council: (1) of the number of applications for the WFA Scheme and cases where allowance was eventually granted in the past five years, with a tabulated breakdown by industry engaged by the applicants/household members; (2) whether it has considered improving the WFA Scheme (such as lowering the working hour requirements or increasing the amount of allowance) so that more low-income families will be eligible for receiving the allowance and improve their lives; if so, of the details; if not, the reasons for that; and (3) whether it has compiled statistics on the median monthly incomes of the non-skilled workers in industries of lower incomes (such as catering, retail, cleaning, security and property management industries) in the past year, with a tabulated breakdown by industry; whether it has considered improving the WFA Scheme so that practitioners engaged in industries of lower median incomes can obtain the allowance more easily; if so, of the details; if not, the reasons for that? Reply: President, The Working Family Allowance (WFA) Scheme aims to support lower income working households which are in full-time employment and not on the Comprehensive Social Security Assistance. The allowances of the Scheme are determined on a monthly basis based on the household's working hours and income. Each of the eligible children and adolescents within an eligible household is given additional allowance. Single parent households also benefit from more relaxed working hour requirements. My response to the Member's question is as follows: (1) The WFA Scheme has received 590 458 applications from April 2018 to end-February 2023. Among these applications, 539 988 were approved, with some of the remainders under processing. These cases classified by the industry of the applicants are tabulated as follows: Industry of applicants Number of applications received Number of applications with WFA granted Finance, insurance, real estate, professional and business services 169 341 161 666 Construction 94 738 90 798 Transportation, storage, postal and courier services, information and communications 83 833 81 150 Accommodation and food services 82 221 78 743 Import/export, wholesale and retail trades 61 300 58 237 Public administration, social and personal services 38 185 36 254 Manufacturing 9 449 9 087 Others 25 469 24 053 No information provided by applicant 25 922 0 Total 590 458 539 988 (2) The WFA Scheme promotes self-reliance and rewards hard work, and has thus put in place certain working hour requirements. According to data from the Census and Statistics Department (C&SD), most of the households who satisfy the income limits of full-rate WFA are able to meet the basic working requirement for non-single parents to date. Furthermore, among the approved WFA cases, about 85 per cent of them were approved with the Higher Allowance, which has a higher working hour requirement. The Government has fully reviewed and made several improvements to the WFA Scheme in the recent years. These measures include relaxing the eligibility criteria (such as extending the Scheme to singleton households), substantially increasing the rates of allowances twice, and allowing household members to aggregate their working hours to apply for WFA. The Government has also relaxed the working hour requirements of non-single parent households on a time-limited basis in response to the COVID-19 epidemic. As at end-March 2023, there were about 57 000 WFA "active households" (i.e. households which have been approved with WFA and submitted the latest applications in the past six months), which involved about 190 000 persons including some 76 000 children. This is more than double the number of the then Low-income Working Family Allowance (LIFA) Scheme. In 2023-24, the estimated recurrent expenditure for the WFA Scheme is about $2.464 billion, which is about three times more than the actual expenditure of the then LIFA in 2017-18 at $653 million. According to the established mechanism, the Government will adjust the income limits of the WFA Scheme annually with reference to the median monthly domestic household income of economically active households (MMDHIEA), and adjust the asset limits of the WFA Scheme annually based on the movements of the asset limits for public rental housing (PRH) applications. (3) According to the 2022 Report on Annual Earnings and Hours Survey of the C&SD, the median monthly incomes of elementary occupations and service and sale workers in the food and beverage services, retail trade, as well as estate management, security and cleaning services industries as at May to June 2022 are tabulated below: Industry Median monthly incomes of elementary occupations and service and sale workers (excluding government employees; students and live-in domestic workers as exempted by the Minimum Wage Ordinance) Food and beverage services $13,600 Retail trade $12,500 Estate management, security and cleaning services $12,300 To provide focused support for persons in need, the WFA Scheme maintains an income limit at 70 per cent of MMDHIEA, and determines its asset limits based on that for PRH applications. Households may receive the corresponding allowances regardless of their industries provided that they meet the relevant income and asset limits. At present, the income limits of Full-rate and Half-rate allowance for a two-person household are at $14,700 and $20,500 respectively. Furthermore, the Government has been promoting the WFA Scheme through various channels to encourage more eligible households to come forward. In the past year, we have approached some 400 companies and trade unions of the aforementioned industries and invited them to promote the WFA Scheme to their members/employees.