support for universal pensions in the Philippines

April 28th, 2016

Negrense senatorial bet [candidate] Neri Colmenares said … he would … like to push for a P1,500 [US$32] social pension for all senior citizens regardless of their status, whether or not they are members of the SSS [Social Security System] or GSIS [Government Service Insurance System], or with children abroad.

At present, the social pension is only P500 [US$10] and those who are SSS or GSIS  pensioners are disqualified, and the cutoff age is 77 years old. Colmenares stressed the original Social Pension Act gives P1,500 per senior citizen per month.

Juancho Gallarde, “Bet batting for pension for barangay officials“, Visayan Daily Star, 27 April 2016.

According to a 2016 report, “The Philippine Social Pension at Four Years: Insights and Recommendations“, written by Charles Knox-Vydmanov and Daniel Horn of HelpAge International in London, with Aura Sevilla of Coalition of Services of the Elderly in Manila, the 2010 Social Pension Act promised pensions to indigent citzens aged 60 and over. “In its initial 2011 implementation, adjusting to fiscal constraints, coverage was limited to those aged 77 and over. However, in 2015, this was expanded to those aged 65 and over.”

There is no mention in Mr Gallarde’s article of any change in age of eligibility, so apparently it continues to be 77 years. It is not clear how Mr Colmenares would finance a universal pension, since he promises also to fight for lower income taxes.

pot on tracks

April 26th, 2016

No, not that kind of pot! This is a metal pot, used for cooking on the tracks of a railway station that has been turned into a makeshift camp by refugees in Idomeni, Greece, on the border of Macedonia. (AP Photo/Gregorio Borgia)

Source: “Austria re-imposes controls on its border with Hungary“, Associated Press, 25 April 2016.


universal pensions in Lesotho?

April 23rd, 2016

Lesotho, a small country completely surrounded by South Africa, in November 2004 began to provide its citizens aged 70 and older with a non-contributory Old Age Pension. The OAP was pension-tested, but not tested against other family income or assets.

OAP monthly benefits have increased over time, and are now equal to 40 US dollars (37% of per capita GDP). For a county as poor as Lesotho, this is a very generous pension. The age of eligibility, however, remains 70 years.

Lesotho’s Old Age Pension from the beginning excluded existing pensioners, so was not universal. I was very pleased to see a recent note, published by the ILO, with the title “Lesotho: Universal Old Age Pension”. Is it possible that Lesotho has removed the pension test for its social pension?

The Old Age Pension (OAP) is a tax-based scheme for all older persons . ….

With more than 4 per cent of its population above the age of 70, Lesotho has a larger share of older people than many countries in sub-Saharan Africa. All citizens of Lesotho over 70 years of age are entitled to a monthly pension benefit of 550 Lesotho Maloti (LSL), equivalent to US$40. The OAP was introduced to lift older persons out of poverty and is the largest regular cash transfer in Lesotho, covering about 83,000 persons (4.5 per cent of the population). While coverage of eligible persons is approximately 100 per cent, it is estimated that many more benefit indirectly .

Prior to the OAP’s introduction, only war veterans and civil servants received a pension, covering less than 3 per cent of older persons in Lesotho. ….

The Pensions Unit … transfers funds to around 300 payment points across the country on a monthly basis. ….

On a few occasions, remote payment points were served by helicopter because of weak road infrastructure. The national army provides security at service points and while transferring the money. ….

Although OAP utilizes existing structures and government actors, the administrative costs are estimated to be quite high at around 20 per cent.

Thea Westphal, “Lesotho: Universal Old Age Pension“, International Labour Office (ILO), Country Note Series (March 2016).

After much searching, I was unable to confirm removal of the pension test. Lesotho’s social pension scheme most probably is still a universal minimum pension. It is close to universal only because few older people have any other type of pension. The implicit coverage, reported in the ILO note, of 112.5% (4.5/4) of age-qualified residents might reflect an underestimate of the population aged 70 and older, inclusion of persons younger than 70 as eligible beneficiaries, or – more likely – some combination of both errors.

I was surprised to learn that the administrative costs – at 20% of benefits – are so high. This might be due to the high cost of delivering cash payments to pensioners, especially those who live in remote areas of the country.

Earlier TdJ blogs on Lesotho are posted here.

the cost and benefits of higher education

April 19th, 2016

Young people know that universities can be a waste of time and money. But which ones? The choice is important, and information is limited.

Of course, the value of university cannot be measured just by the boost to your earnings. But young people deserve as much information as possible so they can decide. I struggle to sympathise with the purists who say this would “financialise” higher education. When I left university in 2006, the average graduate left with £9,670 in debt. Last year, it was more than £20,000. If we did not want young people to see university as a financial decision, we should not have made them pay for it.

Sarah O’Connor, “Shine a light on the disparity of graduate pay by university“, Financial Times, 20 April 2016.

libertarian logic

April 19th, 2016

These are not direct quotes, but similar statements are sometimes uttered simultaneously, by the same person.

“Redistribution of income with revenue from taxes will never work because people are inherently selfish.”

“Charity will cover everything because people are inherently generous.”

HT “The Discovery of the Heart“, CBC Ideas podcast, with Paul Kennedy, 13 April 2016.


universal pensions commence in Zanzibar

April 18th, 2016

Zanzibar’s universal pension scheme is now fully operational. Thought du Jour covered this historic event before, here and here. Sarah Gillam writes that older people in Zanzibar welcome the initiative, but would like to see the age of eligibility reduced to 60 years, and elimination of fees that older people must pay to access healthcare.

Older men and women in Zanzibar will have a government-funded universal pension for the first time today (15 April), the first of its kind in east Africa.

Anyone over the age of 70 will receive a monthly non-contributory pension of Tsh 20,000 (US$9).

Mama Ghanima Othman Juma, 67, [a representative of Zanzibar’s older people] …  urged the government to consider lowering the pension age to 60 and called for the effective implementation of free healthcare, with older people given priority. ….

Although Zanzibar health policy states that older people should receive free healthcare, this policy has not been effectively implemented and therefore requires older people to pay fees when they attend a clinic or hospital.

Sarah Gillam, “Zanzibar’s new universal pension the first of its kind in east Africa“, HelpAge e-Newsletter, 14 April 2016.

See also this blog:

Amleset Tewodros, “Zanzibar: Celebrating a new pension and the life of Bi Kidude“, HelpAge Blog, 15 April 2016.

The legendary Fatuma binti Baraka (c.1910s – 17 April 2013), a native of Zanzibar, was known also as Bi Kidude. She performed as a member of the Shikamo Jazz band of older musicians from Dar es Salaam, the capital of Tanzania.

working-class Republicans in US politics

April 16th, 2016

American journalist Jacob Weisberg has an interesting op-ed in this weekend’s Financial Times. Here are two paragraphs that caught my attention. To place these paragraphs in context, note that working-class Democrats who became Reagan Republicans decades ago are Donald Trump Republicans today.

Working-class Republicans are waking up to the reality that their party does not represent them any more than the Democrats did. On issue after issue, Mr Trump’s supporters are at odds with Republican dogma. They do not support free trade and globalisation. They do not favour tax cuts for the wealthy, or bailouts for banks, or financial deregulation, or the rollback of consumer protections. And, though nationalistic, their families are the ones that paid the human cost for the neoconservative fantasy of bringing democracy to Iraq. ….

In this context, the rise of the Tea Party now appears as a red herring. Rank-and-file Republicans were not dismayed by George W Bush’s failure to shrink their benefits. It was the party’s wealthy elite who were frustrated about that. Working-class Republicans were enraged because they saw the federal government bailing out Wall Street banks instead of ordinary citizens. The Tea Party quickly dissipated into irrelevance because it did not represent the people it claimed to represent.

Jacob Weisberg, “The Republicans face a historic rupture“, Financial Times, 16 April 2016.

Jacob Weisberg (born 1964) is editor-in-chief of Slate Group, and former editor of Slate magazine.

Robert Frank on success and luck

April 14th, 2016

It is often said, tongue in cheek, that the two most important decisions a child can make is to choose good parents and a good place of birth. Parents and birthplace, for the bably, are of course a matter of chance, since choice is not possible. But the fact remains that these are incredibly important determinants of success in life.

Cornell University economist Robert Frank (born 1945) has written a book on this very topic, which was published just days ago by Princeton University Press. The book’s title is Success and Luck: Good Fortune and the Myth of Meritocracy. An essay adapted from his book has been printed in the May 2016 issue of The Atlantic magazine. Here are some excerpts. Read the rest of this entry »

Hong Kong government snubs universal pensions

April 11th, 2016

It is clear that universal pensions are not on the agenda of the government of Hong Kong, even though they were recommended in the Chow Report commissioned by government more than two years ago.

The chief secretary attracted more boos than cheers at a public consultation forum as she tried to defend the government position on retirement protection. ….

[Carrie Lam Cheng Yuet-ngor] said the government has never promised to introduce universal pensions, and emphasized that it has the responsibility to point out the great financial burden such a scheme would impose on the people.

Ten members of the Reclaiming Social Work Movement held up their left palms on which was written the Chinese character for “crooked” suggesting Lam was not truthful. ….

The six-month consultation on retirement protection, being conducted by the Commission on Poverty, will end on June 21.

Adeline Mak, “Lam jeered on universal pension snub“, The Standard, 11 April 2016.

tax transparency in Norway

April 9th, 2016

With the leakage of the so-called “Panama Papers”, there is renewed interest in the subject of tax avoidance. A simple way to attack this problem directly is to publish the reported earnings and tax payments of everyone. I cannot imagine this happening in any country. I recently learned, though, that Norway has had this system in place for nearly two centuries. BBC correspondent Jonty Bloom reports “at the click of a mouse – the earnings, tax and wealth of everyone from the prime minister down is available online for anyone to see.”

[Every Norwegian] has been able to see how much you earn and how much tax you pay since 1814. Until recently the data was only available at the town hall or in expensive printed books, rather like the Yellow Pages, but these days it is all available online. ….

It started when Norway won its independence and needed to set up a central bank. Taxes were raised and to make sure everyone was paying their fair share, all the details were published. ….

As a result Norway is one of the least corrupt countries in the world.

Jonty Bloom, “Tax transparency: Could the UK take a leaf out of Norway’s book?“, BBC News, 1 April 2016.