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iv) By developing existing provisions for occupational benefit paid by
or through arrangements made by an employer. These could be contributory or non-contributory; separately funded by employers; or provided through arrangements with insurance companies. They could cover retirement pensions; sick pay; redundanɑy pay; or survivorship (death in service) benefits. They could also be provided in addition to or partly in substitution for social security benefits (as the latter so happens in, for example, the UK, Japan and Switserland).
b) Introducing new provisions
1) By introducing a scheme of contributory benefits, in a social
insurance pattern (as in North America and Western Europe) or a provident fund pattern (as previously found in Singapore and Malaysia) In the former, the benefits paid tend to be flat rate (ie related to a fixed rate of benefits) or earnings related, ie related to previous individual earnings, rather than to the rate of contributions. They may be paid for out of an invested fund (as in North America) or out of current income (pay-as-you-go schemes, the normal pattern in Western Europe). In the latter, the benefits depend on the amount of money put into the fund by employees and employers; and the rate of interest provided. It is thus more of a compulsory saving scheme. Such contributory schemes could covar long term benefits (eg retirement or survivorship ie widows/widowers benefits) and/or short term benefits (eg sickness or unemployment benefits).
ii) By introducing a broad system of non-contributory benefits, on a
similar basis to those under social insurance but where eligibility depends on a residency test not on a contribution record (as, for example, in Denmark).
iii) By replacing the workmen's compensation scheme with an industrial
injuries scheme on the Western European model. This would provide for regular allowances on a no-fault basis. Employers legal liability would continue for cases of fault.
Views are invited on whether any of the approaches mentioned in (a) and (b) above would be a suitable basis for developing social security in Hong Kong.
Factors in the development of social security
1. There are a number of factors which need to be taken into account in the development of social security in Hong Kong:-
a) Contributory ▼ non-contributory
i) If social security is to be developed beyond means-tested allowances,
should the emphasis be on contributory or non-contributory benefits. Which is likely to be the more acceptable to employers and employees?
ii) Which provides a more satisfactory basis for financing? Will
employees be prepared to pay contributions rather than receive benefits paid for out of general revenue? Would those paying tax
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Private notes are available after approval.