Children’s support in retirement protection: the underrated “family pillar”

Talk about Hong Kong retirement protection and everyone mentions MPF and CSSA — but few name a pillar of staggering size: children’s financial support. Research by an HKU social work associate professor (published 2011) estimated it at about HK$23 billion a year — nearly double what the government then spent on elderly CSSA and Old Age Allowance (about HK$12 billion).

How important is children’s support in Hong Kong retirement protection?

Children’s support is the underrated family pillar of Hong Kong retirement protection: a 2004 Census and Statistics Department household survey of 4,812 residents aged 60+ found 60% were receiving children’s support, estimated at about HK$23 billion a year — far above the government’s roughly HK$12 billion spend on elderly CSSA and Old Age Allowance that year. For low-income families, well-educated children able to support them are parents’ best retirement security.

The study held one more intriguing finding: elderly people relying mainly on children’s support reported better psychological health than those on CSSA — and even better than those living off savings or self-reliance. The likely reason: pride in having raised successful children who could now support them — a return in dignity, not just dollars.

Why do 40% of elderly get no children’s support?

Sceptics ask: if it matters so much, why do four in ten elderly lack it? The research identified four reasons:

1. About 15% receive CSSA — the Social Welfare Department requires proof their children cannot support them before granting it;
2. About 5% have no children or their children have died;
3. About 12% of elderly men are still working;
4. The rest simply do not need children’s support.

Will children’s support shrink?

Some fear it will fall sharply over the next twenty to thirty years, for two reasons: the erosion of traditional filial piety, and three decades of declining fertility. The research found no data for the first — children who can support needy parents still do. The second needs discounting: elderly with two children received more than those with one, and three more than two — but four, five or more showed no significant difference from three. The effect of child numbers on support hits a ceiling, so fertility’s impact may be exaggerated.

The policy contradiction: encouraged yet penalised?

In sum, children’s support remains vital in Hong Kong retirement protection, though its role will gradually decline over the next two to three decades as MPF and savings grow more important. The study warned the government: if MPF and savings growth cannot offset the decline in children’s support, demand for elderly CSSA will rise.

More thought-provoking is the contradiction: policy should encourage children to care for retired parents, yet the Social Welfare Department requires children to declare themselves unable to support their parents before the parents can claim CSSA — a defensible practice that sits at odds with encouraging filial support, and one urgently needing alignment.

By an associate professor, Department of Social Work and Social Administration, The University of Hong Kong