Protecting Old People from Falling into Poverty in Thailand

Thailand is aging rapidly, and the proportion of working-age people is shrinking. The poverty rate is higher among people over 60.

• Thailand’s population has peaked and will begin to decrease in 2030
  
• The proportion of people over 60 will increase dramatically over the next 50 years, from 15% in 2010 to 35% in 2060.
  
• The proportion of working-age people (age 15-59) will shrink, from around 54% in 2020 to 46% in 2050
  
• The poverty rate is higher among the elderly compared to the poverty rate in the total population– in 2010, 10.9 % of people over 60 were poor, while only 7.7% of the total population were poor

The government has many pension programs in place to address this challenge, but more can be done to improve effectiveness

• There are currently eight separate pension programs covering different portions of the population
  
• The majority of benefits are going to those who are not poor -- only the Old Age Act appears to have a significant impact on preventing old age poverty, especially in the informal sector
  
• Several programs lack an adequate legal framework
  
• There is no pension and provident fund supervision agency, or a consolidated financial institution regulator
  
• Without a well articulated national pension policy, there is duplication and lack of coordination among ministries sponsoring separate pension programs, which are supported by other social assistance and community programs

Various policy options are available to consolidate and rationalize the wide range of Thai pension systems, with greater focus on reducing poverty among the elderly.

• The government can consider:

1.  Rationalizing and reducing the number of pension program
2. Creating a pension regulator
3. Establishing clear responsibility for overall pension policy

• The universal social pension under the Old Age Act is responsible for covering citizens aged 60 and above who are not covered by any other formal pension program.
  
• The government can save significant expenditures by restructuring this program to target pensioners who are poor or need it most, to eliminate poverty completely for this group.