In response to the unprecedented challenges caused by COVID-19, the Hong Kong government announced on 8 April 2020 a HK$137.5 billion package of relief measures aimed to help businesses stay afloat, keep employees in employment and relieve financial burdens of individuals and businesses as Hong Kong's economy is seriously affected by COVID-19 pandemic.
The latest relief measures was announced after the first round of the Anti-epidemic Fund for HK$30 billion and the HK$120 billion relief package approved by the legislative Council in February 2020. The said fund would mainly use to provide one-off cash injections to retailers, food and drink service providers, transport companies, students, arts and cultural sector, guest houses and travel agents, property management companies and owners’ organisations, constructions and cleaning workers.
The second round of relief measures include an HK$80 billion employment support scheme to 1.5 million Mandatory Provident Fund (MPF) contributors. The Government will also provide one-off relief grants to 16 hard-hit sectors and proposals on relaxing the financial burden of businesses and individuals as well as various relief through government facilitation. Details about the relief measures are shown in sections I to IV below).
► Preserving employment
Spending HK$80 Billion to implement the Employment Support Scheme
- The government will provide subsidy to eligible employers to pay as much as 50% of employees' salaries for six months, with the monthly subsidy for each employee capped at HK$9,000 (which is Hong Kong's 2019 median monthly wage of HK$18,000).
- Employers have to select one month from January, February or March, 2020 for calculation of salary subsidies and that the total number of employee employed have to be from March 2020.
- To eligible for the subsidy, the employers have to promise not to terminate the employees by means of redundancy upon receipt of the subsidy, and the subsidy must be fully utilised to pay employees' salaries.
- The employers who have made MPF/ORSO contribution for employees are eligible for the subsidy (this subsidy excludes the government, statutory bodies and organisations funded by the government).
- The subsidy will be released to eligible employers by two installments. The first installment of the subsidy would be released to employers by end of June 2020.
- To release a one-off subsidy of HK$7,500 to each self-employed person who has made MPF contributions for the past 15-month period. Expected to benefit about 215,000 persons.
- To provide wage subsidy to employers engaged in construction, catering and transport (mainly taxi and red minibus drivers) sectors which MPF contributions are not fully covered for the employees. Expected to benefit about 800,000 persons.
► Job creation and job advancement
♦ To provide support to the unemployed
- To loosen the asset limits of Comprehensive Social Security Assistance (CSSA) Scheme temporarily and to provide unemployment support scheme through CSSA Scheme. The asset limits for non-disable applicant will be increased double for a period of 6 months. Expected to benefit about 40,000 households.
♦ To create jobs
- To release HK$6 billion to create around 30,000 jobs in the public and private sectors in the coming two years for people who possesses different academic qualifications and skill sets (include professionals and Technicians, university graduates, middle-level and grassroots workers).
- The HKSAR government would employ about 10,000 new employees and about 5,000 interns in the coming year.
♦ To uplift skill sets
To encourage employees to learn new skills:
- To invest HK$100 million for provision of matching fund for employees of public and private sectors to participate to the training programs for uplifting of their skill sets
- To inject additional fund of HK$2.5 billion to Employees Retraining Board (ERB) to optimise 'Love. Upgrading Scheme' by increasing 10,000 quotas and retraining allowance to HK$5,800 per month for each eligible trainees.
- To provide subsidies of about HK$90 million to Appointed Training Bodies (ATB) of the ERB offer employment counseling and referral services to all trainees, to maintain the minimum operations of those ATB.
- To provide training subsidies of about HK$30 million to some 600 consulting firms registered under the Construction Industry Council.
- To increase funding of HK$30 million to optimise the Employment Program organised by the Labour Department by means of adjusting the maximum amount of the on-the-job training allowance.
To help enterprises to make use of latest technology by launching the below schemes:
- Remote Business Scheme: To provide about HK$500 million to support enterprises and their employees by deployment of technologies and relevant training to sustain their businesses. Expected to benefit over 3 000 enterprises and 40,000 employees.
- Deployment of 5G Technologies: To subsidise the public and private sectors for deployment of 5G technologies with a cap of HK$500,000 per project. Expect to benefit about 100 projects which cost a total amount of about HK$60 million.
- LAWTECH Fund: To assist legal firms/professionals to upgrade their information technology system and arrange relevant LAWTECH training for their staff to support the development of remote hearings. Expected to benefit about 700 legal firms/professionals which cost about HK$40 million
- COVID-19 Online Dispute Resolution (ODR) Scheme: To provide ODR services for disputes arising from COVID-19 which cost about HK$70 million
► Provision of relief to 16 hard-hit sectors
The Government will also provide one-off relief grants to 16 hard-hit sectors include exchange participants and Securities and Futures Commission (SFC) licensed individuals, tourism industry, aviation sector, catering sector, creative industries, educational sector, construction industry, athletic associations and relevant registered trainers, teachers of interest groups sponsored by the Social Welfare Department, businesses which have been ordered to close or put in place specified precautionary measures pursuant to the Prevention and Control of Disease, etc., costing HK$21 billion.
► Measures to reduce financial burdens of businesses and individuals
- The Government propose to enhance the SME Financing Guarantee Schemes by increasing the maximum loan amount per enterprise, depending on the guarantee amount.
- Provision of concessionary interest rates of up to 3% for one year for loans under 80% and 90% guarantees.
- Other measures include providing tenants of government properties a 75% rent concession for six months, waiving registration fees for health care workers for three years and deferring due date for payment of salaries tax, personal assessment and profits tax in April, May and June 2020 by another three months. Lowering the MTR fares by 20% for six months commencing from 1 July 2020.
► Other relief measures through Government facilitation
- The Government propose to provide further relief of HK$2 billion to the Airport Authority, airlines and other aviation operators to release their liquidity pressure.
- The Hong Kong Monetary Authority will increase its lending capacity to HK$1 trillion enabling banks to lend and provide individual clients 'Principal moratorium' for a specified period to help easing the liquidity of businesses.
- A grace period of insurance premium payment for period from 30 to 180 days will be offered by the major insurance companies for policy holders of individual life and medical, critical illness.
For details about the second round of relief measures, please access the below web-link:
We shall continue to watch out the details about the procedures and documentation requirements for application of the above subsidies with the government and we will keep you posted once additional information is available.
In the meantime, please feel free to contact us to find out how we can assist you in respect of the above relief measures.