Hong Kong to Increase Dependent Parent/Grandparent Allowance, Child Allowance and Deduction Ceiling for Elderly Residential Care Expenses

The Financial Secretary of Hong Kong John Tsang presented the 2011-12 government budget on February 23, 2010, in which he proposed to increase the allowance for maintaining dependent parents/grandparents by 20 per cent.

This would increase the allowance for maintaining dependent parents/grandparents aged 60 or above from the present $30,000 to $36,000, while the additional allowance for taxpayers residing with these parents/grandparents throughout the year will also be increased from $30,000 to $36,000.

The allowance for maintaining dependent parents/grandparents aged 55 to 59 will be increased from the current $15,000 to $18,000. The same increase applies to the additional allowance for taxpayers residing with these parents/grandparents throughout the year.

For taxpayers whose parents/grandparents are admitted to a residential care home, the deduction ceiling for elderly residential care expenses will be raised from the current $60,000 to $72,000.

It is estimated that this measure will benefit about 510 000 taxpayers and cost the government $570 million a year.

In addition, the Financial Secretary also proposed to raise both the child allowance and the additional one-off child allowance in the year of birth by 20 per cent from $50,000 to $60,000 respectively for each child.

It is estimated that this measure will benefit about 300 000 taxpayers, costing the government $650 million a year.

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