Using the 1999 Family Income and Expenditure Survey, this paper empirically examines the cost and effectiveness of the current transfer system, as well as the government elder allowance proposal and other policy options (including universal and means-tested programs), in reducing the poverty among the elderly. The findings indicate that the current transfer system, largely focusing on the poor elderly, could effectively reduce poverty rates and gaps. The results from simulations suggest that the elder allowance plan proposed by the current government is more likely to benefit the middle-class elderly, and, therefore, only slightly reduces the poverty rate and poverty gap compared to other policy options.