SHAL­IZA HAS­SANALI

and AN­NA-LISA PAUL

In the last five years, Gov­ern­ment has paid a stag­ger­ing $18.6 bil­lion in se­nior cit­i­zens pen­sions. This year alone, the Min­istry of So­cial De­vel­op­ment and Fam­i­ly Ser­vices spent $4 bil­lion in pen­sion as part of its so­cial safe­ty net and due to a sub­stan­tial in­crease in ben­e­fi­cia­ries due to the coun­try’s age­ing pop­u­la­tion.

This was re­vealed by Min­is­ter of So­cial De­vel­op­ment and Fam­i­ly Ser­vices Don­na Cox in re­sponse to ques­tions about her min­istry’s an­nu­al pen­sion pay­outs.

She ad­mit­ted: “there has been a sub­stan­tial in­crease in the num­ber of per­sons re­ceiv­ing Se­nior Cit­i­zens Pen­sion over the last five years be­cause of the Gov­ern­ment’s de­ci­sion to in­crease in the statu­to­ry lim­it to qual­i­fy for a pen­sion.”

Cox said in the last five years, the min­istry has record­ed 41,745 new pen­sion­ers in their sys­tem. At age 65, a cit­i­zen can re­ceive a month­ly pen­sion of $3,500 from the State.

In 2015, the min­istry record­ed 86,280 se­nior cit­i­zens in re­ceipt of pen­sions. Fast for­ward to Sep­tem­ber 2020 and the pen­sion pop­u­la­tion has in­creased to 104,007.

The min­istry was al­lo­cat­ed $5.3 bil­lion in last year’s bud­get and pen­sions ac­count for the ma­jor­i­ty of its an­nu­al ex­pen­di­ture.

In 2016, the min­istry spent $3.6 bil­lion in pen­sion. For 2017 and 2018, the fig­ure dropped to $3.5 bil­lion and last year pen­sion­ers re­ceived $3.8 bil­lion. This year, the min­istry paid the high­est sum to date—$4 bil­lion—bring­ing the to­tal in the last five years to $18.6 bil­lion.

Cox, who dis­missed re­ports that re­cent­ly cir­cu­lat­ed on so­cial me­dia that Gov­ern­ment planned to slash pen­sions by half in the Oc­to­ber 5 bud­get, in­sist­ed: “There is no in­ten­tion to re­duce the al­lo­ca­tion for the se­nior cit­i­zens’ pen­sion. The per­son putting up such posts may be in a bet­ter po­si­tion to say why they are mak­ing these state­ments.”

For­mer di­rec­tor of the Di­vi­sion of Age­ing Dr Jen­nifer Rouse said the $18 bil­lion spent over time has put a se­vere bur­den on the Trea­sury. Rouse, a geron­tol­o­gist, said in 1997 the In­ter­na­tion­al Mon­e­tary Fund (IMF) had ad­vised the Gov­ern­ment to look at the un­sus­tain­abil­i­ty of a non-con­trib­u­to­ry pen­sion plan.

“At that time, we were not an age­ing pop­u­la­tion. Life ex­pectan­cy was low and com­mu­ni­ca­ble dis­eases were the or­der of the day. And there was a trend to cut and con­trive,” she said.

Rouse said be­tween 1946 and 1964 the coun­try saw a marked in­crease in the birth rate. This was the era of the ba­by boomers most of whom joined the pub­lic ser­vice to work. The last co­hort of ba­by boomers will re­tire by 2024.

“The de­mo­graph­ic tran­si­tioned from high fer­til­i­ty and mor­tal­i­ty to the op­po­site. With that came less peo­ple in the work­force which means you have less Pay As You Earn (PAYE) that will go to­wards this pen­sion. None of them who worked nev­er put a cent to­wards pen­sion,” she said.

Rouse said they will be­come ben­e­fi­cia­ries of this grant which would fur­ther en­cum­ber the State’s cof­fers.

When ten per cent of the pop­u­la­tion is 65 years and over it is con­sid­ered age­ing. A na­tion­al cen­sus un­der­tak­en in 2010 showed that 13.4 per cent of the pop­u­la­tion is over the age of 60, which rep­re­sent­ed 177,676 peo­ple. The Unit­ed Na­tions has pro­ject­ed that by 2030 T&T’s age­ing pop­u­la­tion will bal­loon to 17.5 per cent.

“So ba­si­cal­ly, every five years we will go up by one per cent. This year we should be at 15.4 per cent,” she said.

She be­lieves in­sti­tut­ing prop­er­ty tax and es­tab­lish­ing the T&T Rev­enue Au­thor­i­ty can bail the coun­try out of the fi­nan­cial cri­sis we are fac­ing.

“Di­ver­si­fy­ing the econ­o­my must be done with a thrust to­wards rev­enue gen­er­a­tion,” Rouse said.