(Source : Government Information Centre)
LCQ5: Dependent parent allowance
Following is a question by the Hon Chan Yuen-han and a written reply by the Secretary for Financial Services and the Treasury, Mr Frederick Ma, in the Legislative Council today (December 15):
Regarding the dependent parent allowance, will the Government inform this Council:
(a) of the number of taxpayers granted dependent parent allowance in each of the past three years;
(b) of the respective numbers of currently working and non-working persons who are aged 50 or above; and
(c) whether the authorities will consider granting a new allowance to taxpayers who support the livelihood of non-working parents aged 50 or above or relaxing the current minimum age requirement for dependents in relation to dependent parent allowance from 60 years old to 50 years old; if they will, of the details, and whether they will consider making use of the information concerning Mandatory Provident Fund contribution, valid documentary proofs provided by taxpayers or other means to investigate if the parents of the taxpayers concerned are working or not, so as to facilitate the arrangement for granting the allowance; if they will not consider granting the new allowance or relaxing the minimum age requirement, the reasons for that?
(a) The numbers of salaried taxpayers granted dependent parent allowance in the past three years of assessment are as follows:
|Year of assessment||2000-01||2001-02||2002-03|
|Number of taxpayers
granted the allowance
|300 318||305 376||304 637|
|Number of dependent
|385 921||392 679||393 314|
(b) According to the results of the General Household Survey for the third quarter of 2004, the employment situation of persons aged 50 or above is as follows:
|Number of persons
not engaged in
|50 - 59||499 500
|> 60||101 100
|1 024 600
|Total||600 700||49 900||1 220 900||1 871 400|
(Note: Those who are not engaged in economic activities are neither employed nor unemployed persons, eg retirees and full-time homemakers)
(c) Under the Inland Revenue Ordinance, a taxpayer is eligible to claim dependent parent allowance if he/she maintains a parent who is aged 60 or more or, being under the age of 60, is eligible to claim an allowance under the Government's Disability Allowance Scheme.
The main reason for setting the minimum age requirement for dependents in relation to the dependent parent allowance at 60 is that the normal retirement age is 60 in Hong Kong. This allowance is introduced to encourage people to take care of their dependent parents.
The figures listed in Part (b) show that the vast majority of people aged 60 or above are not working, while most of the people aged between 50 and 59 are still working. We consider it appropriate to set the minimum age requirement for dependent parents at 60.
If the Inland Revenue Department has to ascertain whether the dependent parents are working, it will have to rely on the proofs submitted by the taxpayers, because the mobility of the labour market is very high. The Mandatory Provident Fund Schemes Authority does not have information on all the employees who have joined the Mandatory Provident Fund Schemes or Recognised Occupational Retirement Schemes. The Government would have to invest many further resources in verifying the relevant documentary proofs to ensure that only eligible taxpayers are granted the allowance and to deter people from making false claims. This would be a difficult condition to enforce from the taxation point of view.
Nevertheless, the Financial Secretary will consider all the proposals relating to taxation in preparing the Budget.
Ends/Wednesday, December 15, 2004