8.2 Noncontributory Pensions in South Asia

eligible to receive the old age benefit.5 However, government fiscal space, the share of the elderly in the total population, and the projected rate of population aging vary considerably across the region. Accordingly, the potential for extending the coverage of noncontributory pension schemes to informal workers also varies. It is important to underscore that, even if noncontributory pensions are devised to be affordable now, a major challenge is ensuring that the program remains affordable over time, given the population aging and the potential for discretionary increases in the benefit amounts.

THE CURRENT STATE OF NONCONTRIBUTORY PENSIONS IN SOUTH ASIA

Five of the eight countries in the region have noncontributory schemes targeted at the elderly and persons with disabilities. Box 8.2 provides an overview of existing noncontributory pension programs, eligibility criteria, and benefit levels across the region. In principle, this provides a platform to potentially expand pension coverage on a noncontributory basis.

BOX 8.2 Noncontributory Pensions in South Asia • Bangladesh. The Old Age Allowance is income tested and targeted at men ages 65 or more and women ages 62 or more who do not receive any other government or nongovernment allowance. Only one member of a household can receive the pension.

The beneficiary’s annual income cannot exceed Tk 10,000 (equivalent to US$120).

A designated committee prioritizes the benefit payments to the most vulnerable and women. Of those selected, at least half must be women. • India. The Indira Gandhi National Old Age Pension Scheme (IGNOAPS) is targeted at people ages 60 an older whose annual income does not exceed a certain limit, which may vary across states. A basic pension of Rs 200 a month is paid to the 60–79 age group, and a pension of Rs 500 a month is paid to the 80 and older age-group.

The federal scheme is complemented by programs run by the states and territories, which provide far more extensive and generous protection among the elderly and persons with disabilities. The fragmentation and multiplicity of designs among the state programs make aggregation at the national level a complex task that would require a specialized study. • Maldives. The Old-Age Basic Pension covers every citizen age 65 and older who resides in the country and who is not receiving more than twice the amount of the old age basic pension from any other pension source. • Nepal. The Old Age Allowance or Senior Citizens Allowance is paid to all citizens ages 70 and older, except Dalits (lower castes) and residents of Karnali Province, who may receive the allowance at ages 60 and older. • Sri Lanka. People ages 70 and older are covered by the Elderly Assistance Program if they are living in low-income households and have been receiving the samurdhia subsidy or monthly public assistance allowance. Another social welfare program—the

Public Welfare Assistance Allowance or pin padi program—may also benefit the elderly, although the program is not targeted specifically at this group.

Source: various world bank data, including Pensions: data (dashboard), world bank, washington, dC, https://www.worldbank.org/en/topic/socialprotection/brief/pensions-data. a. The samurdhi (prosperity) subsidy is a targeted food stamp program introduced in 1995.