What does the OPG look like?

2. What does the OPG look like?

Beneits and coverage

OPG is an income-tested, monthly payment of ZAR1,500 ($112) for persons aged 60-75 years and ZAR1,520 ($114) for those above 75 years. It is paid to around 3 million older persons in South Africa, reaching up to 100 per cent coverage in some jurisdicions. OPG is given to ciizens, permanent residents, and refugees with legal status. Applicants have to provide informaion about their income and inancial assets for the means test. If a grant needs to be reviewed, addiional documentaion is required including greater details on the reported income and a life ceriicate to

South Africa: Universal pensions

with Grindrod Bank, which issues bank to disability or sickness—have access cards to beneiciaries. The account is to services and beneits. free of monthly charges and allows full

access to tradiional banking services Payment Channels

including ATMs, electronic fund transfers and point of sale transacions. Three diferent payment channels SASSA cardholders can also transact exist, all of which use the SASSA card. oline where there is no formal The irst channel is SASSA pay point banking infrastructure. Every channel areas, where the payment provider requires beneiciaries to be ideniied CPS sets up mobile ATMs. second through their SASSA card, which can channel is payment into Grindrod only be done through successful bank accounts. The third channel biometric ideniicaion. Beneiciaries is payment at insituions such as who use a PIN are ideniied through old persons’ homes on a ixed date, the PIN code and voice recordings. In where beneiciaries must authenicate this way, the payment remains secure their idenity with their SASSA card. and beneiciaries’ ideniies can be Payment dates vary and are released veriied even when there are no

a litle in advance to prevent robberies ingerprint scanners.

of the trucks carrying cash. Armed SASSA delivers beneits through security guards are present at pay fullzy equipped and well-stafed point areas. mobile units as part of its Integrated Community Registraion Outreach

3. What are the main

Programme (ICROP). The ICROP

impacts on people’s lives?

facilitates beneiciary enrolment Recipients of the Older Person’s Grant (OPG) share their pensions within the households. Esimates indicate that one grant reaches up to six persons in a recipient’s household. Family structures in South Africa are luid

Let: Mobile payment unit Right: SASSA-branded MasterCard

and oten muli-generaional rather than nuclear, which is largely due to

and registraion, issues smart cards, segregaion policies of the apartheid maintains an online database, raises era and high HIV/AIDS prevalence. An awareness, provides access to pay HIV/AIDS prevalence rate of 18 per cent points, and conducts home visits by among the working age populaion medical staf and social workers to leads to many people having chronic ensure that individuals unable to go to illnesses and disabiliies. Older persons the hospital or leave their homes—due oten raise their grandchildren because

South Africa: Universal pensions

the parents may have passed away due other grants. Older persons still to HIV/AIDS related illnesses. In such suffer from the long-term effects of circumstances, the grants serve as a apartheid and are often perceived reliable source of income and are shared as being needier than other groups. within large households. Compared to South Africa is considering introducing non-recipient households, households

a mandatory contributory social in receipt of public old-age grants have insurance scheme that provides higher shares of expenditure on food pension, death and disability beneits. and educaion.

This will help to provide adequate and Research has shown that there is a afordable beneits, pool risks across posiive correlaion between living in a the labour force and achieve social household with an OPG recipient and solidarity, complemening both non- inding employment. Women in the 20- contributory social assistance and

30 age group in recipient households private insurance. are up to 15 per cent more likely to be Another gap in South Africa’s existing employed and 9 per cent more likely social protection system is the lack to paricipate in the labour force than of income support for unemployed those in non-recipient households. persons of working age, i.e. Recipient households are more likely to between 19 and 59 years. This may experience posiive health outcomes result in the redistribution of OPG for children, especially girls, e.g. beter and other grants to unemployed height-for-age and weight-for-height.

members of beneficiary households, thereby lessening the impact on the

4. What’s next?

intended beneficiaries and creating implicit subsidies for unemployed

South Africa has come a long way since persons without a defined strategy the end of the apartheid era in 1994. or scheme to provide protection. Today, its social protecion system is one of the most comprehensive in

This Universal Social Protection brief the region. While OPG is currently

was produced by Johan Strijdom

a means-tested beneit, DSD plans and Oumar Diop of the Department to universalize the grant. Diferent

of Social Affairs, African Union models have been inancially assessed

Commission, and Thea Westphal of since 2013 and triparite consultaions

the ILO. It was reviewed by Thomson with stakeholders and representaive

Sithole and Anthony Makwiramiti of bodies carried out to choose the most the Department of Social Development, suitable policy opion. Universalizaion

and Isabel Ortiz, Valérie Schmitt and of OPG is a priority in South Africa

Loveleen De of the ILO. because it is more accepted politically than universalization of

South Africa: Universal pensions

Oosthuizen, M. 2012, South Africa’s State

References

Old Age Pension. Recent Developments in the Role and Design of Social Protecion

Government of South Africa, n.d. Department Programmes Workshop, 3-5 December 2012, of Social Development, Poverty and

Brasilia.

Inequality data for 2014/2015. OECD Economic Surveys: South Africa. 2015. Finn, A., Leibbrandt, M. and I. Woolard, 2009.

www.treasury.gov.za/publicaions/other/ Income & Expenditure Inequality: Analysis of

OECD%20Economic%20Surveys%20South%20 the NIDS Wave 1 Dataset. Discussion Paper

Africa%202015.pdf no. 5. University of Cape Town. Staisics South Africa. 2014. Staisical Government of South Africa, 2015, Older

release P0211, Quarterly Labour Force Survey Persons Grant, www.gov.za/services/social-

Quarter 4, 2014. Pretoria. beneits-reirement-and-old-age/old-age- pension

Hagen-Zanker, J. Morgan, J. and C. Meth, 2011, South Africa’s cash social security grants: Progress in increasing coverage. Overseas Development Insitute, London. 2011

Interview with Thomson Sithole, 06.05.2015, Directorate Disability and Older Persons beneits, Department of Social Development, Pretoria.

Leubolt, B., 2014, Social policies and redistribuion in South Africa / Bernhard Leubolt; Internaional Labour Oice;

Global Labour University. - Geneva: ILO, 2014 (Global Labour University working paper; No.

25, ISSN: 1866-0541 ; 2194-7465 (web pdf)) Noble, M., Barnes, H., Wright, G. and Noble,

S. (2006) The Old Age Grant: A Sub- Provincial Analysis of Eligibility and Take Up in January 2004, Pretoria: Naional Department of Social Development, Republic of South Africa.

Thailand Main lessons learned

• In a country with a rapidly ageing

Universal Pensions

populaion, a large informal sector and a relaively high incidence of poverty among older persons, a non-contributory pension can go

a long way towards reaching those

Old-age allowance

who do not have access to any social protecion in old age.

In 2009, Thailand succeeded in expanding pensions for older persons

• Inefecive targeing procedures through the implementaion of a non-

prevented needy as well as contributory old-age allowance.

eligible older persons from Unil recently, Thailand’s pension

receiving a pension. A universal system included several contributory

scheme introduced in 2009 schemes for government oicials,

resulted in over 5.5 million new beneiciaries by 2013.

private sector employees and informal economy workers. However,

• Poverty among the elderly coverage of the later group was very

has fallen, which can largely limited. Overall, only 20 per cent of

be atributed to increased older persons had access to some

pension coverage. Increasing level of protecion.

and indexing beneits, as well In the face of an ageing populaion and

as strengthening the legal and

a large informal sector, the country inancial foundaions of the sought new ways to protect older

scheme, could further strengthen persons without coverage. In 2009, a

its posiive impacts. non-contributory old-age allowance

was introduced and Thailand reached • Even though the beneit levels have increased steadily over

universal coverage soon aterwards. ime, the pension sill does not

provide suicient protecion. The

1. An ageing populaion

non-contributory allowance can

be complemented by addiional schemes, such as the recently While much of South-East Asia is

with low pension coverage

established Naional Savings Fund, characterized by relaively youthful

which strives towards providing populaions, Thailand is ageing rapidly.

more comprehensive protecion for people in old age. Older persons will make up nearly 1

one-third of the total populaion by 2050, as seen in Figure 1.

¹ As the fund started in 2015, the efeciveness of the scheme cannot yet be assessed.

Thailand: Universal Pensions

Figure 1. Populaion distribuion by age

under the Social Security Act, 1990

group and sex, 2010 and 2050

(secion 33). Addiionally, private sector employees can contribute to

a provident fund that gives them a lump-sum payment upon reirement. Those who were previously insured under secion 33 and cease their employment can coninue to be insured under secion 39. The contribuions and beneits are based on a reference income of 4,800 Thai

Source: UN Populaion Division (July 2012)

baht (THB), which is less than the minimum wage.

In 2020, the populaion of persons Workers in the informal economy aged 60 and above is expected to can choose to contribute to one of surpass the number of children for two opions under the Social Security

the irst ime in Thailand’s history. 2 Act, secion 40. The irst opion does Yet, unil 2009, no more than 20 per not provide any form of reirement cent received any form of old-age beneits, while the second opion pension, oten despite decades of provides a lump-sum old-age beneit. hard work.

At the end of 2010, only 84 individuals Thailand’s pension system has were insured under secion 40 (SSO, coninuously developed over the 2016). years and includes various schemes for government oicials, private sector

2. A need for a non-contributory

employees and informal economy

old-age allowance

workers. Depending on the number of years of contribuion, government Previously, there was a large gap in oicials receive a lump-sum payment protecion for informal sector workers or a pension under the Pension for and inadequate beneits for reirees Civil Servants Act, 1951. Furthermore, from the formal sector. This led the they can also avail the Government Government to develop an old- Pension Fund, which provides a lump- age allowance for “underprivileged sum payment upon reirement.

elderly”, deined as persons at least 60 Depending on the duraion of years of age without enough income the contribuions, private sector to meet necessary expenses, or who employees can receive a monthly are unable to work, abandoned or pension or a lump-sum payment have no caregivers.

The

old-age allowance was

designed at the naional level, but

² Children are deined as persons below 15 years of

age.

Thailand: Universal Pensions

targeing procedures altogether in 2009, coverage signiicantly increased.