Improved wage subsidy scheme sees salary cap lifted

The number of workers benefiting from the Employment Support Scheme is expected to increase to 1.74 million after the government lifts a salary cap for employees to be eligible for the wage subsidy.   

Speaking during a daily press briefing on Thursday, Chief Executive Carrie Lam Cheng Yuet-ngor said that after consulting the city’s different business sectors on the latest wage subsidy scheme, authorities will now be making six changes accordingly.   

The scheme, which launched in 2020, provided employers with subsidies to help them retain staff who might otherwise have been made redundant during the pandemic. An employer will receive HK$24,000 for each of its workers from May to July, or HK$8,000 each month.  

The government’s earlier plan was to exclude employees making more than HK$30,000 a month in order to prevent employers from distributing the subsidies to higher-earning employees rather than giving the full amount to low-salaried staff. However, the salary cap has now been lifted.   

Lam also announced that employers can use their headcount during the fourth quarter in 2021 to apply for the subsidy instead of using data back in 2020.  

Meanwhile, with the handouts targeting small and medium businesses, the number of employees eligible for receiving the subsidy will be capped at 1,000 for the better allocation of government resources, according to Lam. 

Employers could also apply for half-rate subsidies under the latest changes, where part-time workers or freelancers earning HK$3,000 to HK$8,000 monthly will also benefit from the scheme.   

Changes are also made to include self-employed individuals and employees aged 65 and above, under the premise that they are in possession of Mandatory Provident Fund accounts.   

Lam said under the improved scheme, the number of workers benefiting from it is expected to increase to 1.74 million from the previous estimation of 1.3 million.   

Lam also noted that the latest change is expected to cost the government as much as HK$39 billion from the previous figure of HK$31 billion.