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Can Mandatory Provident Fund (MPF) Scheme benefit, Occupational Retirement Scheme benefit or Gratuity be used to offset Severance Payment or Long Service Payment?

Labour Department

The accrued benefit held in the MPF scheme, gratuities based on length of service, or occupational retirement scheme benefits, can be used to offset severance payment or long service payment; but is limited to the part attributable to employer's contributions only. Hence the amount of severance payment or long service payment that needs to be made by the employer can be reduced according to the calculation method shown below. The amount that can be offset is as follows -

  • If the aforesaid payments exceed the severance payment/long service payment, the employer can only reduce an amount equivalent to the severance payment/long service payment; and
  • If these payments fall short of the severance payment/long service payment, the employer is required to pay the difference.

severance payment

  • For enquiries on application for payment of an amount from the occupational retirement scheme benefits or accrued benefits in the MPF scheme, please contact the trustees concerned for details; or contact the Mandatory Provident Fund Authority (Tel: 2918 0102) for enquiries.


The Legislative Council has passed the legislation to abolish using the accrued benefits of employers' mandatory contributions under the Mandatory Provident Fund (MPF) System to offset severance payment and long service payment in June 2022. The Government has announced that the abolition of offsetting arrangement will take effect on 1 May 2025. Please visit the "Abolition of MPF Offsetting Arrangement Thematic Website" for details.


The is not a legal document. The Ordinance remains the sole authority for the provisions of the law explained.

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Last update: 14 May 2024
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