Ageing in the Twenty-First Century: - HelpAge International

Table 2: Selection of social pensions with major extension
Country Change to system Age of Targeting Monthly benefit Number of Cost
(and year) eligibility level (US$) recipients (% of GDP)
Bolivia Age of eligibility 60 Universal 29 896,470 1.06
lowered (2008)
Chile Change in eligibility 65 Pensions-tested 158 840,032 0.90
criteria (2008)
and means-tested
Nepal Age of eligibility 70* Universal 6 284,045 0.35
lowered (2008)
Thailand Change in eligibility 60 Pensions-tested 19 5,652,893 0.13
criteria (2009)
Source: HelpAge International, Social Pensions Database.
Available from www.pension-watch.net
*Note: Eligibility for the social pension in Nepal is lower
in some regions of the country.
Where social pensions have been put in place, they have
often played a major role in extending pension coverage.
Bolivia, despite being the poorest country in South
America, has the highest pension coverage in the region.
Since 2008, everyone over the age of 60 is entitled to a
monthly pension of US$28 (or US$21 for people with
other pension entitlements). 73 Likewise, the extension
of the social pension in Thailand in 2009 has led to an
additional 3.9 million pensioners, meaning that over
80 per cent of older Thais have some kind of pension.
China is in the process of rolling out a major rural
pension system that – though not strictly a social
pension – includes provision of non-contributory
benefits that cover older people today who have made
no contributions. 74 Due to the number of older persons
in China, at the global level the impact of these reforms
will be remarkable.
The figures in Table 1 and Table 2 also demonstrate that
social pensions can be introduced for a modest cost.
Nepal and Bolivia, for example, have introduced
universal pensions for a cost of 0.35 per cent and 1.06
per cent of GDP respectively. Simulations of cost in
countries without social pensions show a range of
low-cost options. A survey by HelpAge International in
50 developing countries found that the cost of universal
pension for over-60s would range between 0.7 and 2.6
per cent of GDP. Costs would be significantly lower for
higher ages of eligibility (for example, 65+ or 70+). 75
These lower-cost options would provide a starting point
for countries to expand pension coverage.
Social pensions make a big difference to the well-being
of older people, particularly the poorest, even where
benefits are relatively modest. A universal pension in
the Yucatan, Mexico, with a value equal to only 5 per
cent of average income was found to increase visits to
the doctor by 22 per cent. 76 But the benefits extend much
further than to older people alone. UNICEF’s recent
Social Protection Strategic Framework highlights the
importance of the social and familial relationships
across different age groups and shows how needs are met
today by sharing and pooling resources across these age
groups. In the case of children, the critical roles played
by caregivers, including women and older people, in
different contexts in children’s well-being, are part
of investing in their future adult productivity and
well-being in older age. This means that pensions can
constitute a form of child-sensitive social protection
that breaks the intergenerational cycle of poverty.
For example, in Brazil, it is estimated that the gap
between actual and full school enrolment was reduced
by 20 per cent for girls living in households with older
people receiving the Fundo de Assistência ao Trabalhador
Rural (FUNRURAL) pension. The study also showed that
with increases in the pension amount received by a
female pensioner, girls’ labour participation rates
decreased. 77 The KwaWazee Project in rural Tanzania,
which provides a pension to grandmothers in a region
with very high HIV prevalence and a growing number of
orphans dependent on grandmothers, has had a positive
impact on promoting children’s school attendance and
progress by enabling households to purchase school
materials, uniforms, and kerosene for lamps. 78
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