The Labour Department has recently implemented the three-year Re-employment Allowance Pilot Scheme (REA), introduced in the Chief Executive's 2023 Policy Address on 25 October 2023. The REA targets non-employed middle-aged and elderly citizens, incentivising them to re-ignite their passion by furthering their careers in Hong Kong.

Eligibility

Legally employable individuals aged 40 and above who have not been in paid employment for at least three consecutive months (including self-employment and running a business) are encouraged to step back into the workforce via a cash allowance. Key points include:

• Applicants employed for six consecutive months will be eligible for a maximum allowance of HK$10,000.
• Applicants employed for an additional six consecutive months (totalling 12 consecutive months) will be eligible for an additional maximum allowance of HK$10,000, amounting up to HK$20,000 per eligible applicant.
• Part-timers and casual workers will be eligible to receive up to 50% of the maximum allowance.

Those holding a visa/entry permit to work, study, establish or join in any business in Hong Kong, or to stay as a visitor, are not eligible under the REA. Sole proprietors, partners in a partnership, or directors of the employing company will also not be eligible. Applicants should not have any kinship ties with their employers. The Hong Kong Government expects around 6,000 workers to benefit from the REA.

Creating Synergy with the Employment Programme for the Elderly and Middle-aged

Employers of middle-aged and elderly workers currently benefit from the Employment Programme for the Elderly and Middle-aged (EPEM), which encourages their employment through a subsidy for on-the-job training (OJT) to enable a smooth transition into the workforce. With the implementation of the REA, the OJT period under the EPEM has been extended to six months for workers aged between 40 and 59, and 12 months for those aged 60 or above.

Effect on Various Other Social Welfare Programmes

Applicants uncertain about their eligibility for the REA alongside a means-tested social welfare programme should consult the relevant authorities to determine whether the re-employment allowance payable under the REA will affect their entitlement to subsidies under programmes like the Working Family Allowance Scheme (WFA), the Old Age Living Allowance (OALA), and the Comprehensive Social Security Assistance Scheme (CSSA). According to the Labour Department, the re-employment allowance under the REA is not considered household income under the WFA, nor is it considered income and assets under both the OALA and CSSA.

Key Takeaways

According to the data collated by the Census and Statistics Department, labour force participation rates were among the lowest for middle-aged females (aged between 40 and 59) and the elderly (aged 60 and above, regardless of gender) in 2022 and 2023. This indicates untapped labour within these age brackets that could be utilised.

The REA is just one incentive introduced in the Chief Executive's 2023 Policy Address to boost employment in Hong Kong. Coupled with the EPEM, the Hong Kong Government aims to strengthen support for the local workforce by encouraging individuals such as housewives and retired workers to re-enter the job market, alleviating the stress of staff turnover on businesses, and speeding up the recovery of Hong Kong's economy.

Businesses should be receptive to the middle-aged and elder generation stepping back into the workforce after a hiatus, as their prior experience in other fields could prove invaluable. Companies could look to cater to the needs of these individuals by providing thorough guidance and training.

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Disclaimer: The information contained in this article is intended to be a general guide only and is not intended to provide legal advice. Please contact [email protected] if you have any questions about the article.