Social pension crucial to protect elderly, reduce poverty
KATHMANDU, July 20: As Asia´s population ages, developing countries in the region should explore options, such as social pensions, that provide cash benefits to vulnerable elderly population in need of a safety net, according to a new Asian Development Bank (ADB) publication.
“Social pensions can help older people gain access to health care, and enhance their status and social standing,” an ADB statement quoted S Chander, director general of ADB´s Regional and Sustainable Development Department, as saying.
“They also help the most vulnerable, particularly women and widows who often lack savings or any form of social security, and face discrimination in terms of employment, inheritance and property laws.”
The study, Social Protection for Older Persons: Social Pensions in Asia, looks at various non-contributory social pension schemes in the region and argues extension of moderate assistance goes a long way in reducing poverty.
Case studies from Nepal, Bangladesh, Thailand and Vietnam illustrate that a social pension program with low benefits to many beneficiaries is more beneficial than high benefits to few beneficiaries, the study says, acknowledging, Asia´s aging population is a development challenge, as caring for the elderly can be costly.
But there are not adequate cushions for them. Currently, only about one-quarter of the workforce is covered by contributory pensions in China, the Philippines and Sri Lanka. Less than one in 10 are covered by contributory pensions in Bangladesh, India, Indonesia and Vietnam.
The study also says that targeting social pensions to income or poverty levels - as opposed to universal coverage - makes it difficult to identify eligible beneficiaries and can lead to mismanagement and favoritism.
Social pensions can be attractive to policymakers in countries where national budgets are tight and poverty rates are high, as the beneficiary group is clearly defined and liabilities are simple to track.