Budget U-turn: $6,000 cash handout replaces MPF injection

Financial Secretary John Tsang has revised the new Budget: the proposal to inject $6,000 into every MPF account is scrapped, replaced by a $6,000 cash handout to every Hong Kong permanent resident aged 18 or above — covering civil servants, retirees and housewives. Salaries tax will also be cut by 75%, capped at $6,000.

Why cash instead of an MPF injection?

Because the MPF injection proposal sparked huge public anger — citizens wanted cash, not locked-up retirement money. When Tsang delivered the Budget on 23 February, he earmarked over $40 billion for one-off relief, including the $6,000 MPF injection, but no tax rebate. The backlash was immediate, centring on the MPF injection, the missing rebate and the “N-have-nots”. After hearing public views and meeting legislators, Tsang changed course.

What are the details?

Every permanent resident aged 18+ gets $6,000 in cash, withdrawable in full at their discretion. Those not covered will get separate arrangements from reserved resources. Tsang conceded the handout could fuel inflation, but said balancing citizens’ needs against inflation risk was the priority — the aim is to “share wealth with the people”.

What do legislators say?

Across parties, legislators backed the revision as a decisive response to public opinion. DAB chairman Tam Yiu-chung said it meets citizens’ needs; New People’s Party chairwoman Regina Ip called the cash handout a “historic change” the public would welcome.

To see how MPF contributions affect your monthly income, visit MPF fund comparison for fees and performance across schemes, or the MPF education centre for contribution rules.