More help for the elderly

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An elderly person arrives for a service at Bangkhunthian Geriatric Hospital in Bangkok. (Photo: Arnun Chonmahatrakool)

The country has several pension funds for retirees, such as the Social Security Fund, the Government Pension Fund and the National Savings Fund. Those who do not have it rely on the government’s old-age allowance scheme.

However, the monthly grant scheme, which currently pays between 600 and 1,000 baht depending on their age, may not be enough to cover the daily expenses and other needs of beneficiaries.

In response to calls to improve income security for retirees, the House Committee on State Welfare conducted a study to ensure that people aged 60 and over receive at least 3,000 baht in living allowances per month under the law.

At the end of last month, the House unanimously approved the committee’s report, which proposes an amendment to the law on the “basic old-age pension”, which aims to provide social protection to large sections of the elderly population.

Rangsima: Help for the elderly “insufficient”


It’s high time for income security

Rangsima Rodrasamee, Democrat MK for Samut Songkhram and chair of the House State Welfare Committee, said panel members met on May 27 and agreed that the current old-age allowance is insufficient. for seniors and that a new law on income security is essential.

The study recommends that the Old Age Act 2003 be amended to create a national pension scheme and then transformed into a “fundamental national old age and pension” law.

The amended version should serve as a framework law to better protect the elderly. The highlight is the monthly allowance of 3,000 baht, which is considered the minimum income one needs to prevent poverty.

The proposed amount can also be adjusted every three years to keep people above the so-called poverty line, which is revised every three years by the National Council for Economic and Social Development.

This would be a big increase over what is offered under the current regime.

Elderly people are paid between 600 and 1,000 baht per month, depending on their age. People between the ages of 60 and 69 receive 600 baht; 70–79, 700 baht; 80–89, 800 baht; and those over 90 receive 1,000 baht.

Meanwhile, registration of the elderly will likely be handled by local administrative bodies.

Nimit: Waiting to see PM’s response


Ball in the government’s court

The committee’s report is now on its way to the government for consideration after receiving overwhelming support from MPs. However, it remains to be seen whether Prayut Chan-o-cha’s administration will play ball.

According to Nimit Tienudom, a member of a civic welfare network, the legal change needs the approval of General Prayut because the law on old age is a financial law.

“This report is accepted by all MPs, so it is an update that will be sent to the government. We will wait to see if the Prime Minister will approve it,” he said.

Mr Nimit said the government’s decision will determine whether the plan should be prioritised.

Five national pension bills sponsored by a network of civil groups and parties have not received the Prime Minister’s approval and cannot be considered by the House, he said .

The projects were proposed by Seri Ruam Thai Party, Prachachart Party, Move Forward Party and Thai Rak Tham Party and a civic network for better public welfare.

When the Civic Network introduced the bill, General Prayut sought the advice of the Council of State, the government’s legal adviser.

According to the Council of State, if the government considers the project redundant, it should not approve it. However, if the government intends to create income security for the elderly, the law on old age may be amended.

The national pension scheme for the elderly can start using the existing mechanism under the old-age allowance scheme, Nimit said, adding that the government has enough time to move the issue forward.

He said there was no need to start all over again if General Prayut did not approve of the matter. A new government after the next general election can continue with this report, he added.

Nuttanan: Taxes should fund welfare


A prudent investment

It is highly likely that the proposed income security scheme will be part of campaign politics in the next general election. Its supporters see it not as a populist project but as a state investment that will increase purchasing power and end old-age poverty.

Currently, there are about 12 million people aged 60 and over and the government spends about 70 billion baht per year on the old age allowance scheme.

In the next five years or so, the number of elderly people will increase to 18 million, or one third of the population. At that time, the country will be classified as a “super-aged” society.

The proposed income security program will cost the country 400 billion baht a year and raises the question of where the government will find revenue.

Mr Nimit, also a member of a sub-committee studying a national pension scheme, allayed concerns about constraints on revenue. He said the panel was confident the program could be put in place after discussions with state agencies that collect revenue for the state.

The country has expanded its revenue streams, including enforcing an electronic services tax law to collect value-added tax (VAT) from foreign operators of electronic services.

Together with revenue from lottery sales, concessions given to telecommunications service providers and other taxes such as petroleum tax, there should be enough revenue to cover the gap, he said.

However, legal amendments are essential to force them to allocate money to the national pension scheme, he said.

With the country now an aging society, income security must be provided for people aged 60 and over and the network is determined to push for what is called a three-tier system.

The first pillar is a basic pension for people aged 60 and over; the second tier is existing retirement savings schemes based on their employment status, such as the social security scheme or the government pension fund for civil servants; and the last level is a voluntary savings scheme such as provident funds.

Boost for the informal sector

The proposed national pension scheme means workers in the informal sector, estimated to number around 20 million, will receive the retirement income they need.

Most people in this group do not have access to pension systems and face desperate situations due to a lack of basic social protection when they are too old to work.

Somkid Duangngern, 82, coordinator of the bronze craft center, said as a hard worker all his life, the national pension scheme is good news.

“Civil servants and private sector employees have incomes after retirement. But no one seems to appreciate our value,” he said.

Poonsap Suanmuang Tulaphan, director of Homenet Thailand, a labor development foundation, said informal sector workers are an integral part of the basic economy and contribute to economic growth.

However, they have been largely left behind on several fronts: improving and developing skills, workplace safety and the pension system, she said.

Ms Poonsap said there should be some kind of system to alleviate old age poverty and inequality in the informal sector workforce and should provide them with some financial security when they are too old to work.

start small

Nuttanan Wichitaksorn, an economist and researcher at the Thai Development Research Institute, said he agreed with the national pension scheme in principle, but that key details such as funding sources, management and efficiency, and mechanisms to promote and ensure transparency need to be developed.

He said the program should be implemented in stages to avoid creating too heavy a financial burden. In his view, the first group of seniors who should qualify are those with state welfare cards because the government has the data.

Thailand does not have the wealth to roll out universal welfare schemes, so Mr Nuttanan said pension payments should go to those who need them.

The government has failed to revamp tax structures, especially VAT which has remained at 7% for years, he said. The law imposes a VAT of 10% but the government has chosen to reduce it to 7% and maintain it apparently for the sake of its popularity.

He said Thailand collects tax revenue well below what is needed for national development, as some people see taxation as a burden and not a liability, while they expect the government provide social protection programs and build infrastructure systems.

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