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Ex-gratia compensation arrangements keep pace with the times

To take forward various public works projects, such as roads, public housing, public facilities and new town developments, the Government needs to resume land and carry out clearance exercises from time to time. In doing so, it is the Government’s policy that no one should be rendered homeless as a result of clearance exercises. Statutory compensation is made to landowners under the relevant ordinances, and residents are offered alternative accommodation in public rental housing (PRH) according to their eligibility. In addition, the Government will, under different scenarios, offer Ex-gratia Allowances (EGAs) to land occupiers (most of which do not have land ownership) through administrative measures. 

Hong Kong is a small and densely populated city. Over the years, residents have inevitably been affected by urban development. Rehousing the residents affected by clearance of huts and squatters on hillsides to PRH flats is also a means of improving their living environment. We fully understand that residents affected by clearances may feel anxious or worried about being left homeless. It is the responsibility of the Government to properly arrange compensation and rehousing to minimise the impact on residents during land resumption and clearance exercises. 

In recent years, there has been concern in the community that the existing ex-gratia compensation and rehousing arrangements fail to adequately address the needs of some affected residents, such as those occupying government land which is being cleared, or private land which is being resumed, who do not own the land. In this regard, we have drawn on our experience to review the existing general EGAs, with a view to better addressing the needs of those affected and responding to public concerns. 

In the light of the review’s findings we recommend the relaxation of eligibility criteria for four existing EGAs as well as enhancing the basis of assessment of these EGAs, so as to meet the rehousing needs of those affected with more generous EGAs and wider coverage. The key recommendations are as follows:

(A) EGA for Permitted Occupiers of Licensed Domestic Structures and Surveyed Domestic Squatters Affected by Clearance:

We recommend amending the eligibility and the basis of assessment of this EGA. As far as eligibility is concerned, the existing EGA is only offered to occupiers of licensed domestic structures who are the licencees, or the occupiers who are living in domestic squatters covered by the 1982 Squatter Structure Survey (SSS) and who are also the domestic occupiers registered in the 1984/85 Squatter Occupancy Survey (SOS). We recommend extending eligibility to include the domestic occupiers of the above two types of squatters, even if they are not the licencees or the domestic occupiers registered in the 1984/85 SOS, provided that they have been occupying the squatters for 10 years or above. Regarding the basis of assessment of this EGA rate, we recommend that the rate be increased from the existing 36-month to 72-month rental value. The actual amount to be offered will depend on the length of occupation by the eligible occupiers, and compensation will be calculated in proportion under a five-band system, subject to a ceiling of $600,000. 

(B) EGA for Shops, Workshops, Godowns, Slipways, Schools, Churches, and Ornamental Fish Breeding Undertakings:

We recommend enhancing the existing basis of assessment of this EGA rate. The EGA rates for shops and workshops will be increased from 4 and 12 months’ rental value to 7 and 15 months’ rental value respectively. The EGA rates for other operators will also be increased proportionally. Eligibility will be relaxed commensurately.

(C) Domestic Removal Allowance: 

Eligibility will be extended to include domestic occupiers of surveyed or licensed non-domestic structures.

(D) EGA rates for the Clearance of Graves, Kam Taps and Shrines will be enhanced.

Specifically, the offer of general EGAs is based on the existing Government policy for squatters, which tolerates licensed squatters or squatters surveyed in the 1982 SSS, despite these are in principle unauthorised temporary structures, many of which involve unlawful occupation of government land or breach of lease conditions.  Only the occupiers of these squatters are eligible for the EGAs. Other illegal squatters which are neither licensed nor surveyed are not permitted and are subject to enforcement. In such cases no EGAs will be offered to the occupiers concerned. 

The proposed enhancements to EGAs mentioned above will apply to those affected by land resumption and clearance exercises for general public works projects. We have already made a submission to the Finance Committee of the Legislative Council (LegCo) to seek approval, and if approved, all those eligible who are affected by on-going and future land resumption and clearance exercises as of July 15, 2013 will be offered the enhanced EGAs according to our proposal. Special EGA compensation to be provided specifically for residents affected by the North East New Territories New Development Areas project has not been included in the above proposal. In this regard we will make a separate submission to LegCo to seek approval in the future. 


1 December, 2013

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