Sunday, August 24, 2014

Elderly poor need more than just a 'bonus'

Aug 24, 2014

As families shrink and fracture, children may be unable to be first line of support

By Radha Basu Senior Correspondent

I met Dr Alexandre Kalache back in 2011 and something he said then has stuck with me ever since as Singapore grapples with issues related to the rising number of old people.

The former head of ageing issues at the World Health Organisation pointed out that while Singapore had done exceedingly well in increasing life expectancy, it had miles to go in helping its elderly age with dignity.

Men and women in their 70s being forced to clean tables at hawker centres, scrub apartment blocks or slog in the hot sun as security guards were not signs of "active ageing", said the epidemiologist, who drafted two manuals on the issue and spent 15 years crafting ageing policies at the WHO.

He pointed out that much of the developed world already had "non-contributory pensions" - or handouts - for low-income older folk, saving them the indignity of hard labour at a time in life when many may want to retire and rest.

"I am all for active ageing, but if you have never had a decent job, don't know what job satisfaction is, to make you work till you practically drop dead is not human," he said.

Ultimately, he added, guaranteed handouts for the elderly poor were something for Singaporeans themselves to discuss.

Three years on, the time for that discussion is finally here.

For anyone concerned about the plight of the elderly poor, the most welcome nugget from Prime Minister Lee Hsien Loong's National Day Rally speech last weekend was no doubt the new plan to help this group.

The Silver Support scheme will provide a payout in the form of an annual bonus to low-income Singaporeans aged 65 and above. Details will be fleshed out in next year's Budget.

It appears that Singapore is inching closer to an old-age support system entrenched in the rest of the developed world, including Hong Kong and South Korea, where the elderly poor are offered a subsistence allowance so that they don't need to work until they die - unless they want to.

But is 65 too young? How much should we pay? Will such a move cause children to abrogate their filial duties? Is a bonus sufficient? Or do we need a broader, income-guarantee scheme for the few who don't own flats and have little or no savings and family support?

As society ages, more older folk remain single and family sizes shrink, it is time to have an open and informed debate on how much social protection should be extended to those who have worked hard all their lives, yet are living out their last years fretting about money.

It is worth noting that while many European countries are rolling back pension schemes, it is not subsistence handouts to the poor that are busting budgets but payouts to the better-off, among other things, through schemes that guarantee employees a percentage of their last-drawn pay after retirement.

The idea of an income-support scheme for the elderly poor in Singapore is not new. In 2011, a Government-appointed work group of businessmen and academics proposed a means-tested retirement grant for low-income workers above 65 which would meet basic needs, similar to an existing scheme in Hong Kong.

The only long-term welfare scheme Singapore has for the aged poor is Public Assistance, under which those who are medically unfit to work, have no assets and little or no family support receive a monthly allowance from the Government, currently pegged at $450 per month for a single person. Beneficiaries also get rental subsidies and medical benefits.

However, while the number of those aged 65 and above has increased from around 250,000 to more than 400,000 over the past decade, the number on Public Assistance has remained fairly stable at around 3,000 a year. Meanwhile, the number aged 65 and above who earn a take-home pay of less than $1,000 a month has doubled from 16,500 to 34,900.

Singapore does not track the number of non-working poor - or indeed even define what it means to be poor - so it is impossible to know exactly how many retired older folk are not getting the long-term help they may need.

Some no doubt work by choice, but I have met many older workers who say their savings are depleted and they have to work, especially if they don't want to be a "burden" on their children.

Most Singaporeans have a nest egg in the form of their HDB flat. But there are at least 30,000 older folk who live in one- and two-room Housing Board flats, mostly by paying subsidised rents. To be eligible to rent, you cannot own a flat and have a monthly household income of $1,500 or below. These numbers too are on the rise.

There are also some who own an HDB flat who are cash-poor but are not in a position to downgrade because their adult children, being single or unable to afford their own flats yet, live with them.

While criteria for public assistance have been widened over the years, I have met many such folk who say they cannot get public assistance because they have children. There are also those who are divorced or estranged from family members. Others - particularly those in their 80s and older - have children who are sick and unable to work. When children stop helping because of their own problems, the parents are loath to ask for support. Surveys have also shown that fewer are receiving cash handouts from children.

But the biggest problem by far could be that older folk don't seek assistance because of the stigma attached.

In a country where a time-honed Confucian compact has made it a sacred duty for children to support their parents in old age, some elderly do not want to acknowledge being let down by their own flesh and blood, be it by choice, compulsion or circumstances.

Academics have already sounded the alarm on the long-term sustainability of getting the young to care for the old, given the twin trends of rapid ageing and plummeting birth rates.

The dependency ratio - the number of young people who support the old - has fallen sharply. Families are not just shrinking, but more are fracturing too.

So there is no doubt that Singapore needs greater old-age income support for the poor.

While the Silver Support scheme has been announced as an annual bonus, it may eventually need to grow into a strong pillar of guaranteed social support.

There is a precedent. When Workfare, the Government's income supplement scheme for low-wage workers, was piloted in 2006, it too was in the form of a bonus. It has since been expanded and strengthened considerably in recent years.

The age limit for inclusion in the Silver Support scheme could be increased progressively as retirement age and life expectancy rise over time. Payouts too can be calibrated according to age, with older citizens receiving more.

Would it absolve children from the responsibility of looking after their parents? I think not. Especially if the scheme remains means-tested and only the poor are eligible.

Details can be worked out later, but for a start, taxpayers need to ask ourselves: If an elderly person who built this nation chooses not to work in a menial job in his last leg of life, should we help make that wish come true?

The answer, I hope, is a resounding yes.

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