The Lump Sum Grant is the key means of subvention for LTC services. It was introduced in 2000-2001 for voluntary adoption by NGOs. The Social Welfare Department no longer imposes rigid input controls on NGOs’ staffing and salary structures or on individual items of expenditure. Recurrent funding is granted to NGOs in a lump sum and NGOs are given greater autonomy and flexibility to deploy resources and re-engineer their services to meet changing social needs. As of August 2018, 164 out of 169 funded NGOs have joined the Lump Sum Grant system and the subvention for these NGOs represents over 99% of the total recurrent subvention for 2017-18 (Social Welfare Department, 2019b). Some NGOs receive heavy subsidies from the Government, covering almost full operating expenses, capital costs, and the provision of premises. Some NGOs and private providers operate on a self-financing basis. Government also has a programme to subsidise residents to stay in privately run facilities, known as the “Enhanced Bought Place Scheme” (Yuen, 2014).

In addition, the Government has from time to time applied for funds from the Lotteries Fund to finance the development of elderly services. These include funds for the construction and setting-up of contract residential care homes for the elderly (RCHEs) and for the implementation of various welfare projects/schemes for the elderly (e.g., Pilot Scheme on Community Care Service Voucher for the Elderly). NGOs may also apply for grants to meet the capital costs of projects in connection with elderly services provided (Audit Commission, 2014, October).

References:

Audit Commission. (2014, October). Provision of long-term care services for the elderly.  Retrieved from https://www.aud.gov.hk/pdf_e/e63ch01.pdf

Social Welfare Department. (2019b, 28 January 2019). Lump Sum Grant (LSG) Subvention System. Retrieved from https://www.swd.gov.hk/en/index/site_ngo/page_subventions/sub_modesofsub/id_lsgmanualc/

Yuen, P. P. (2014). Financing Health Care and Long-term Care in a Rapidly Ageing Context: Assessing Hong Kong’s Readiness. Public Policy and Administration, 17(1), 56-64.