What are social pensions?
Social pensions are tax-financed non-contributory cash transfers paid regularly to older people.
Unlike contributory pensions, eligibility and funding is not linked to previous formal contributions. The term "social" also implies that their objective is primarily related to redistribution and addressing poverty, which distinguishes them from other non-contributory pensions, tax-financed pensions, such as special veterans' pensions and civil service pensions.
Why is HelpAge International interested in social pensions?
An important part of HelpAge's vision is a world where everyone can access at least an adequate minimum pension in older age. Yet this is still not a reality for many, and pension coverage is limited in most low- and middle-income countries. Social pensions have proven to be an effective way to rapidly expand pension coverage in these contexts, where high levels of poverty and informal employment mean contributory pensions have limited reach. They've been shown to have a potentially transformative impact, not just on older people, but on the families they share their lives with.
Who is eligible for a social pension?
This depends. All social pensions have some kind of criteria relating to age, as well as citizenship and/or residency in a given country. Some also include a form of means-test, which excludes individuals deemed to be less in need of a social pension than others. HelpAge categorises social pensions according to the following targeting approaches:
- Universal: All individuals over a given age are eligible, as long as they meet the citizenship/residency requirements. These schemes are sometimes called a "universal age pension".
- Means-tested: Eligibility is limited to individuals deemed to be in greater need than others. Means-tests can include assessment of income and assets, as well as indicators of vulnerability such as health and levels of material support from others. Means-tests vary in terms of the scale of the population they exclude. Those that only exclude relatively better-off individuals are sometimes called "affluence tested" schemes, while those that only target the poorest can be called "poverty-targeted".
- Pensions-tested: Eligibility is limited to individuals with no (or low) income from other pensions. In principle, this is a form of means test, however, we make a distinction for two reasons: (1) these schemes are significantly easier to implement than most other forms of means testing and (2) unlike other forms of means testing, they create a guarantee that all individuals above a given age will receive at least some pension income. For this reason, such schemes are sometimes called universal pensions.
How many countries around the world have a social pension?
As of February 2018, HelpAge estimates that 105 countries around the globe have some form of social pension in place at a national level. Six additional countries have regional schemes or pilots. These are: Indonesia, Nigeria, Papua New Guinea, Tanzania, Uganda and Zambia).
However, there may be schemes we don't know about, so please tell us if we have missed any!
Why has HelpAge built a database of social pensions?
HelpAge has long advocated for the expansion of social pensions and one of the most common questions we are asked is about other countries' experiences. Some years ago we realised that there was limited consolidated information on where social pensions existed, and what they looked like. We have therefore worked gradually to build a database of social pensions around the world, focusing on dimensions of adequacy, coverage and cost.
Are social pensions prescribed by law?
Sometimes. Some have specific laws relating to them and some are stipulated as part of broader legislation (e.g. relating to the wider pension or social protection system). Some are also underpinned by national constitutions. But others have no legislative underpinning at all. Our Social pensions database lists includes information on legislative underpinning.
How much would a social pension cost in my country?
Access our social pension calculator to find out.
Are social pensions "flat rate"?
A "flat rate" benefit means that all recipients receive the same benefit amount. It is quite common for social pensions to be flat rate, but this is not the case in all countries. For example, benefit levels may be increased for relatively older individuals, or may be reduced for married or cohabiting couples.