PURPOSE

To inform Members of the recent developments concerning the policy on transfer of public rental housing (PRH) tenancies to second generation.

BACKGROUND

2. At present, upon the death of the principal tenant, the surviving spouse can take over the PRH tenancy unconditionally. If there is no surviving spouse, the remaining household members may be allowed to take over the tenancy subject to an income test which is used to determine the rent payable. Families with income exceeding the prescribed limits are required to pay extra rent.

3. In the Long Term Housing Strategy (LTHS) Review carried out by the Government in 1997, it was proposed that as a matter of equity, the surviving household (without a surviving spouse) should undergo a comprehensive means test (CMT) which covers both income and assets. Those who fail the CMT should not be granted a new tenancy, but they may be allowed to stay in the PRH flat for a limited period of one year, subject to the payment of market rent.

4. A public consultation exercise on the recommendations set out in the LTHS Review consultation document was conducted between January and May 1997. Implementation of the above proposal was subsequently affirmed in the LTHS White Paper published in February 1998, and the Housing Authority (HA) was asked to work out relevant details.

RECENT DEVELOPMENTS

5. There are two schools of thought on the income and asset limits to be adopted for the above policy. One considers it appropriate to use those applicable to PRH applicants because the adults in the second generation constitutes a new household upon the death of the principal tenant. The other holds a different view and suggests to adopt a more lenient approach, perhaps by adopting limits comparable to existing policy on Safeguarding Rational Allocation of Public Housing Resources (SRA) targeted at well-off tenants. Current income and asset limits applicable to PRH applicants and the SRA policy are shown at Annexes 1 and 2 respectively. A compromise alternative is also possible. A decision has yet to be made on the issue.

6. It is, in any case, the view of the Housing Authority (HA) that households who fail the CMT should be required to vacate their PRH flats within one year in line with the LTHS White Paper. Subject to falls in either the income or net assets during this period, these households should be allowed to take up the tenancies and retain their PRH flats.

7. It is intended to continue to exempt the following cases from CMT under the revised policy -

1. households on shared tenancies;
   
   
2. recipients of Comprehensive Social Security Assistance; and
   
   
3. households whose members are all 60 years of age or over.

INFORMATION

8. This paper is for Member's information.


Housing Department
January 1999

Annex 1

Remarks: Asset limit for small nuclear households of three persons or less whose members are all aged over 60 will be the same as 4-person household. i.e. $470,000.

(Effective from 11.9.1998)

Annex 2

(Effective from 1 April 1998 and subject to annual review)

** The net assets limits for small households at sizes of 1-person, 2-person and 3-person with all members aged over 55 are the same as that of a 4-person household