Cutting payments to seniors isn’t the right way to reduce state burden

That idea would likely save the country millions of baht – but at a cost of depriving people of their basic rights.
The Finance Ministry has proposed ending the elderly living allowances for those with a monthly income of more than Bt9,000 or total assets of more than Bt3 million.
The idea has been floated as part of plans for our ageing society, which risks economic decline as the number of seniors grows faster than that of working-age citizens.
Currently, Thailand is home to 10.78 million seniors, 75 per cent of whom are paid elderly care allowances, worth a total Bt63 billion per year.
Thai society has been greying since 2004 and is forecast to reach UNESCAP’s definition of an “ageing society” by the year 2025, when the percentage of citizens aged 60 or above is expected to hit 20 per cent and those aged 65-plus 15 per cent.
On the positive side, the government seems to be targeting budget at those seniors most in need, which would help reduce the burden on state spending. However, the reality as pointed out by critics is that the government spends as much as Bt140 billion on pension funds for 600,000 civil servants while budgeting only Bt63 billion for the almost 10 million seniors not covered by the state welfare programme.
Subsidies for old-age citizens were launched in 1992 during Chuan Leekpai’s government, at Bt200 per person per year. In 2006, the minimum subsidy was raised to Bt500, with a limit set at Bt1,000 in line with budget support from each local administration, and prioritised underprivileged seniors.
In 2010, the elderly living allowance was revised on a “fair and equal” basis. This made eligible for payments all seniors aged 60-plus who received no income in the form of pension funds, salary or state welfare.
During Yingluck Shinawatra’s government, the subsidy paid to seniors was Bt600 for those over 60 and Bt1,000 for those over 90.
Meanwhile a more selective method of payment that targets certain groups according to income likely won’t work in practice. How can authorities ensure it targets the right groups and effectively so? Some may have no job and assets yet in fact be wealthy as others own assets for them. Others may barely scrape by, but still exceed the income level below which they would be entitled to state aid.
What the government should do instead is encourage the private sector to keep on ageing employees and push private companies to provide workers with provident funds. These measures would be a more effective way of reducing the state’s burden.
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