Policy Address preview: Govt to extend extra tax allowance for newborns to first two years, sources say

The Hong Kong government is set to enhance its pro-birth measures in the upcoming Policy Address on September 17, with sources indicating a planned extension of the additional tax allowance for newborns to cover their first two years of life.

Since the 2023/24 tax year, parents have been eligible for a basic child allowance of HK$130,000 per child, with an additional one-off allowance of HK$130,000 granted in the tax year of the child’s birth—totaling HK$260,000 for that year.

According to sources, this additional allowance will now be extended for a second year, allowing parents to claim HK$260,000 in both the first and second years after their child’s birth.

DAB lawmaker Nixie Lam Lam welcomed the expected move, saying that such a measure would help alleviate financial pressure on parents.

However, she pointed out a structural flaw in the current policy: under existing rules, only one parent in a married couple can claim the total child allowance for all eligible children, which often leads to the higher-earning spouse making the claim.

Lam noted that this arrangement has caused domestic disputes in some households and has been a recurring concern among working mothers.

She urged the government to consider amending the law to allow couples to split or individually claim the child allowance, providing greater flexibility and fairness.

Beyond tax incentives, Lam emphasized that Hong Kong still lacks a comprehensive childcare-friendly environment.

She called for an overarching population policy that involves cross-departmental collaboration to build a supportive ecosystem for families.

“Policies that foster a parenting-friendly environment require macro-level planning and interdepartmental coordination—only then can the public feel confident about raising children in Hong Kong,” she said.

(Marco Lam)