FAQs on the Refundable Capital Levy (updated 14 December 2010)

Question number 30 was added on 14 December 2010. Click HERE to jump to Q30.

1. Why has the refundable levy been introduced at this time?
It is clear that funding will need to come from a number of sources to meet the cost of urgent capital projects and provide for the sustainability of ESF schools. While Government grants will be extremely important, we will use our own cash-flow, borrow against our property portfolio and seek to raise funds from donors. The refundable levy will make an important contribution to this overall effort.

2. If the levy is refundable, how can it make much of a difference?
The levy will eventually raise a total of about HK$300m and will minimize the amount of borrowings required in the first stage of capital investment, which will take place over the next 10 years.  This $300 Million is effectively an interest free loan from parents to contribute to the redevelopment of ESF schools.

3. Does ESF also plan to introduce debentures?
Debentures do not form part of our plans. Debentures usually confer a right to a place at a school, whereas admission into ESF depends chiefly on the student’s ability to access the curriculum.

4. I have a daughter in Year Two. Will I have to pay the levy for her?
The one-off levy will be payable when your daughter reaches Year Seven.

5. I have a son in Year Six in 2009/10. Will I have to pay the levy for him?
The levy will take effect from 2011-12 for students currently in Years One to Five. Students currently in Years Six to Thirteen in 2009/10 will not be required to pay the levy.

6. Will any concessions be made for large families?
The levy will be charged in full for a family’s first two children and reduced to HK$10,000 for subsequent children.

7. I have two children who have already left ESF. Will my remaining son/daughter be counted as a third child (therefore paying a HK$10,000 levy)?
No. When calculating the levy for each child, we will only count children currently in the system. The refundable levy in this case would still be HK$25,000.

8. I have four children in the ESF system and this will present financial problems for me. What help can you offer?
ESF has a financial hardship scheme that have fee remission for families who experience a sudden change in their material circumstances. There is however, no hardship scheme available for the RCL.  Further information on the scheme can be found here.

9. Will the levy be payable for the children of ESF employees, civil servants, etc?
The levy will apply to all students equally, with the exception of ESF teachers, who will pay a levy of $HK5,000 for each child to whom the levy applies, regardless of the total number of children in the family attending ESF schools.

10. Will new students who join at some other point (e.g. Year 3) have to pay the levy?
Yes, they would normally be expected to pay the levy in their first term at ESF (if they have joined after August 2011).

11. Will I have to pay the levy again when my son reaches Year 7?
No, this is a one-off levy, normally paid in either Year 1 or 7.

12. When will the levy be repaid?
The levy will be repaid at the end of the student’s final academic year, net of any outstanding fees.

13. Why doesn’t ESF do more to meet these funding needs through fundraising from alumni?
ESF is putting a lot more effort into raising funds through its schools’ various alumni associations. However, they are likely to be only a small part of the solution given the large infrastructure requirements.

14. It seems that Government grants may help with the renovation of Kowloon Junior School and King George V School. Why not follow that approach with your other building needs?
We will always look to the Government for support in our major building projects.

15. Why don’t you sell your property portfolio to meet these costs?
This would be a one-off measure which would leave us with few options for the future. However, we do intend to use part of this portfolio as collateral for loans to help realise these projects.

16. Many of these projects won’t reach fruition for years. Why should I spend money on something my child won’t get to enjoy?
All ESF students currently enjoy facilities that were paid for by previous generations of parents. It is important to remember that the levy is refundable and we hope, therefore, that it gives parents a relatively manageable way to contribute to the sustainability of ESF education for future students.

17. Is the levy tax-deductible?
As the levy is reimbursable, it is not tax-deductible. As ESF is a registered charity, any gifts made to it are tax-deductible. Parents have the option of making the levy a donation instead of having it refunded.

18. Can my employer pay the levy?
An employer can pay the levy in the same way that they can pay fees.

19. What are the implications for the subvention of introducing this levy?
The capital levy will go towards capital projects. We will still rely on the recurrent subvention to meet operating costs.

20. Will I get interest on my money when it is refunded?
No. The aim of the levy scheme is that ESF can make use of the interest generated to contribute towards the cost of capital projects.

21. Does this apply to the Private Independent Schools (Discovery and Renaissance Colleges)?
No, not at this stage.

22. How will the introduction of the levy affect any increase in fees in this or subsequent years?
It is important to keep these two issues separate. The main driver for fee increases is staff and curriculum costs. If we needed to increase salaries to attract and retain staff, that would put upward pressure on fees. The refundable capital levy is aimed solely at helping to meet the costs of capital projects.