Posts Tagged ‘targeting’

New Zealand’s universal pension is in danger

Saturday, June 16th, 2018

New Zealand has a universal pension scheme that is the envy of the world. It is simple, affordable, and eliminates poverty in old age. When a qualified resident reaches the state pension age, he or she receives a basic, flat pension, regardless of income, wealth or employment history. This benefit, called ‘Superannuation’, is financed from general government revenue. Earmarked taxes are not levied to support it, but benefits are taxable as regular income, so net benefits are lower for pensioners who have income from work or from savings. (more…)

expanding old age pensions in Bangladesh

Wednesday, May 30th, 2018

A daily newspaper in Bangladesh reports that the finance ministry has announced “plans to introduce a universal pension system for both public and private sector employees”. Reading the column, however, shows that the scheme is not universal. It is contributory, and private. If there are no contributions, there will be no old age pension. Government involvement will be limited to matching grants equal to 25 to 50% of the contributions of low-income savers.

The scheme seems to have been promoted by the World Bank. (more…)

private and social pensions in Latin America

Sunday, April 8th, 2018

FIAP (Federación Internacional de Administradoras de Fondos de Pensiones/International Federation of Pension Funds Administrators), the Latin American trade group of private administrators of government-mandated contributory pensions, now acknowledges the need for social pensions, financed from general government revenue. Private managers of Latin American pension funds in the past tended to ignore social pensions, at least in part because these provide little or no opportunity for private profit.

A recent 9-page FIAP report begins by explaining the need for social pensions: (more…)

call for universal pensions in the Philippines

Saturday, March 31st, 2018

Senator Grace Poe has filed a Bill to provide all citizens aged 60 years and older a monthly pension of P1,500 (US$29). (more…)

debating universal basic income

Thursday, February 15th, 2018

Universal Basic Income (UBI) seems like an idea whose time has come, given the widespread fear of workers that their jobs are threatened by automation (robots). Nonetheless, there are many who oppose the UBI, often on grounds that giving people “money for nothing” will discourage work. I never found this argument to be convincing. Means-tested (targeted) benefits almost always require an able-bodied person to be unemployed to receive benefits. In short, government pays citizens for not working. The unemployed who find jobs lose their benefits. A UBI, in contrast, does not require recipients to be unemployed, so does not discourage work. (more…)

call for universal healthcare and pensions for India’s elderly

Thursday, January 18th, 2018

We should start looking at universal health insurance for the elderly, not restricting it to merely BPL [below poverty line] patients, but extending it to the middle-class as well. We need helplines, the establishment of a national trust for the aged and a national commission for senior citizens. Sadly, as a society, we do not care for our elderly and hence the lack of will.

The government needs [also] … to help future generations benefit and live longer … with some sort of a universal pension plan.

Poonam Muttreja, “Too little done to provide elderly with social, financial security“, Deccan Chronicle, 17 January 2018.

Ms. Poonam Muttreja heads the Population Foundation of India (PFI), a New Delhi-based NGO. The Deccan Chronicle is published in Hyderabad (Telangana) and other Deccan regions, including Kerala. The newspaper has more than a million subscribers.

The BPL is supposed to identify families living in extreme poverty, but its application is very uneven, inefficient and corrupt. Many families who are poor enough to qualify are excluded, while non-poor families are often counted as poor.

Only 18% of India’s population over 60 years of age have access to a monthly social pension of 200 Rupees (3 US$), and the beneficiaries are not India’s poorest.

 

social pensions in the Philippines

Tuesday, December 19th, 2017

The city of San Fernando, in the Philippines, is an excellent example of how NOT to support older persons. According to a recent newspaper article, “The city is a pioneer is providing free movie access in various malls here as well as ensuring yearly programs and activities for seniors.”

Free movies and social activities, however, do not substitute for cash benefits. The requirements to qualify for a social pension in San Fernando are clearly designed to stigmatize rather than encourage participation. (more…)

social pensions in India

Sunday, December 3rd, 2017

India, in theory if not in practice, provides social (non-contributory) pensions for all residents older than 60 years who live in families poor enough to be listed as BPL (below poverty line). The social pension, known as the “Indira Gandhi National Old Age Pension Scheme” (IGNOAPS) provides beneficiaries aged 60–79 a monthly pension of Rs 300 (US$4.60). Those 80 years and older are entitled to monthly benefits of Rs 750 (US$11.50). (more…)

means tests are taxes: Canadian edition

Sunday, July 23rd, 2017

Canada provides persons from age 65 with a Guaranteed Income Supplement (GIS, currently C$871.86 a month for a single person), but claws it back at the steep rate of 50% from other income. There is no exempt amount, and some provinces add to this. The provincial claw back in Alberta, for example, is 18%, bringing the total rate of claw back to 68%.

Canada also provides residents from age 65 with an Old Age Pension (currently a maximum of $585 a month for a single person) that is reduced (clawed back) at the rate of 15% from taxable income in excess of $74,788 a year, so is equivalent to an increase in income tax of 15 percentage points for high income older persons until the full Old Age Pension is recovered. Receipt of the Old Age Pension does not count as income for a GIS.

Why do government policymakers in Canada implicitly tax the income of older persons at a higher rate than of younger persons with the same incomes? Perhaps they do not realize that means tests (clawbacks) are taxes. Simultaneously, though, the government has programmes in place to encourage workers to save for old age, to build up a retirement fund that is subjected to a high rate of taxation in old age. This puzzles me.

Canada also mandates contributions to a state pension, known as Canada Pension Plan. Canadian actuary Robert Brown, in a useful article, explains why increasing the contributions to (and benefits from) this plan harms contributors with low incomes, because it causes them to lose benefits that they would otherwise receive from the Guaranteed Income Supplement. He doesn’t mention this, but taxpayers with high incomes also lose benefits from expansion of the noncontributory Old Age Pension. No doubt he assumes (most likely correctly) that those with high incomes can look after themselves! Also, $585 a month is small change for someone with an income in excess of $6,200 a month. (more…)

good news for social pensioners in Fiji

Sunday, July 9th, 2017

The government has increased the Social Pension Scheme allocation from fourteen million dollars to thirty seven million dollars.

Minister for Women, Children and Poverty Alleviation, Mereseini Vuniwaqa says …

”We are really grateful that the government has considered as being one of the increases and it’s a notable increase from $50 to $100 [about 50 US dollars] per pensioner so I’m sure there will be a lot of happy pensioners out there come 1st August.”

All persons under the Social Pension Scheme will now receive $100 and the eligibility age has been lowered [from 68] to 65 years.

Sainiani Boila, “Pension scheme allocation increases to $37m“, Fiji Broadcasting Corporation, 6 July 2017.

The Social Pension Scheme is means-tested assistance that targets older persons with no other source of income. The pension is small, but much better than the previous benefit of 50 Fijan dollars a month. The budgeted amount is sufficient to provide pensions to more than 30,000 older persons.