Battle for old age grants

MANY developing countries have just copied and pasted as their own, some developed countries’ national projects, programmes and practices without first of all trying to understand them in terms of what they are all about, why they were being implemented in the first place, or what their guiding operational best practice standards and principles were. Of cause, doing what developed countries are also doing may make a developing country to prestigiously look good and to appear like it is on the road to attaining First World status. However, if and when such things are done without regard for or paying attention to the reasons why they must be done in the first place, or to their guiding operational best practice standards and principles, there would usually be some teething challenges later on. For example, many developing countries have just jumped onto the bandwagon of proving handouts or free money to certain groups of their citizenry in the form of one social grant or the other. Thus we have seen many poor and developing countries also handing out old age, disability, children, food, education, training and unemployment grants to some of their ‘deserving’ people.

Contrary to best practice standards, most of these social grants have been financed solely through fiscal budgets. Trouble starts when these fiscal budgets run out or are no longer enough to sustain these social grants. When that happens, affected national governments have simply stopped financing these grants, cut them back, or have become highly selective as to who now gets them. This has set them up for unnecessary battles with their own people. This is because once someone is used to getting free handouts over a very long period of time, that person begins to assume or take the stance that they are actually entitled to that free handout. Any attempt to stop or cut back on the free handouts would usually be met with a violent reaction from the beneficiary. This is just how people would naturally respond in such situations. As a result, there would be adverse confrontation and friction

SUSTAIN

between an otherwise well-intentioned national government and its own poor and disadvantaged citizens. Hence, to avoid such unwanted and unnecessary future happenings, it is imperative for developing countries’ national governments to try to understand the guiding operational principles and best practice standards which underpin the provision of certain national government sponsored social responsibility grants.

For example, some well-intentioned developing countries have provided old age grants to citizens who would have attained the legally recognised national retirement age. This is usually pegged at sixty years of age. Old age grants have been handed out to deserving old people in developed countries almost as a matter of routine. Hence some ‘social-trends-savvy’ but poor developing countries have also copied and pasted this fashionable first world trend of providing old age grants without even interrogating the reasons, logic or sense behind it. Such countries and their national governments have made their citizens to believe that once they reach the age of sixty, they would receive monthly old age grants from their governments. Indeed they have all received these old age grants but without paying any regard as to whether or not they really need or deserve to get them in the first place. Thus people who are sixty years old or over and have never been formerly employed in their lives and therefore do not have any occupational pension scheme to fall back on, together with those who were once formerly employed and are now receiving retirement pensions have both found themselves receiving old age grants from their generous national governments. This is until the fiscal budget runs out or is no longer enough to sustain old age grants for everyone over the age of sixty. When such happens, many national governments have sought to stop, weed out or remove all those people who would already be getting or receiving their own monthly retirement occupational pensions from simultaneously accessing old age grants as well. Unfortunately, this is the time when ‘war’or conflict between otherwise well-intentioned national governments and some of their elderly citizens would break out. To elderly citizens who would have been receiving old age grants once they turned sixty years of age regardless of whether or not they were already receiving their own workplace based monthly retirement pension payments, old age grants would have become a basic entitlement. Trying to take away from them this perceived basic entitlement would cause them to want to fight, and they would do exactly just that.

TROUBLE

This is the unnecessary trouble which was previously referred to herein and above. This kind of unnecessary trouble should or would have been completely avoided if only the affected developing countries and their national governments had not just copied and pasted developed countries’ national social responsibility schemes, programmes or practices, but had sought to know and understand them first and foremost before implementing them. This kind of trouble is admittedly trouble of one’s own making. However, this does not mean that such affected countries do not deserve to be sympathised with. They deserve to be sympathised with and also to be assisted to get out of this kind of trouble. Furthermore, they also deserve and need to be helped to prevent themselves from getting into similar kinds of troubles in future. Hence this article. They say that to err is human and to forgive is divine. Who are we to want to condemn other people for making mistakes in life? Anyway, such being the case, let us now examine in detail some of the basic guiding principles and best practice standards which underpin, should or must underpin the provision of old age grants at national level.

First of all, national governments must know, understand and appreciate the fact that, in the bigger, greater and grander scheme of things, old age grants are just but a small part of what is called social protection. They must also know, understand and appreciate the fact that the sole purpose of government is to ensure that all citizens, and without exceptions, are enabled to freely access all their basic freedoms and human rights. This includes access to social protection. Social protection is defined as protection or cover, in cash or in kind, which society gives, affords or extends to some of its vulnerable members in their times of need. It is a fact of life that no matter how rich or poor one may be, at some given point in time, one would always come to need something with which one may not be able to help themselves but would need to be helped by someone else. When such happens, then social protection services would come in handy. Such being the case as it is, it therefore becomes a natural requirement, duty, obligation and responsibility of all national governments not to be taken by surprise when their people come to need social protection services at any given point in time. All national governments must therefore proactively anticipate such instances and put into place forward looking plans to effectively tackle such situations as and when they arise.

RETIREMENT

Thus, as far as old age or retirement income is concerned, all national governments are obliged to put into place national laws and regulations which would ensure that old and retired people would not slide into abject poverty when they can no longer work for themselves. This means that national governments must put into place legally mandatory national pension schemes and the accompanying funds thereof. It must be noted that employer initiated pension schemes are usually not legally mandatory. They are voluntary benefits of employment which some employers offer while others do not offer. However, legally compulsory national pension schemes would obligate all employers and employees to contribute defined monthly premiums into a national pension fund from which all employees would be guaranteed to receive legally defined retirement pensions and other benefits. This is as it should be. However, there is the little question of those people who would never have been formerly employed throughout their entire lives. Such people would not have been able to contribute anything to the national pension fund kitty. Such being the case, they would obviously not be entitled to benefit from such funds. These are the kind of people who would need social protection services from national government in the form of old age grants in order to prevent them from sliding into abject poverty. This is as it should be.

It must be noted that basically, there are three types of social protection. The first type of social protection is called social security or social insurance. This kind of social protection is based on legally mandatory contributions, usually from both the employer and employee, which would then be used to pay out defined benefits in cash or in kind, to either of them if and when needed. This is the category into which national pension schemes fall. The second type of social protection is called social assistance. This kind of social protection is non-contributory but conditional assistance in cash or kind, which qualifying individuals can receive from national governments in order to help them to overcome certain temporary challenges or deficits which they may be facing in their lives at any one given point in time. Such kind of social protection include things like housing, child support, education and training grants. The third and final type of social protection is called social welfare. This is non-contributory social protection which is afforded to certain unfortunate members of society who have no capacity whatsoever to help themselves out of their predicaments. Disability and old age grants are found in this third category of social protection services. Social assistance and social welfare are both mainly funded from the fiscal budget. They can also be partly financed from a given small percentage of social security funds. This would usually be in the form of 10 per cent of the 10 per cent reserve funds portion of all national social security funds. What needs to be understood by both national governments and beneficiaries is that social assistance and social welfare are not universal entitlements. Not everyone would need or be entitled to social assistance or social welfare. Only those who qualify for such kind of social protection would receive it.

Thus, only those people who are not on any retirement or old age pension scheme at all, would be entitle to receive old age grants and not just anyone or everyone who has reached the legal age of retirement.

However, when national governments start off by wrongly dishing out old age grants to all and sundry, they would only be creating future problems for themselves because once people are accustomed to receiving such grants, people are apt to think that they are actually entitled to them. Any attempt to correct this anomaly would be vigorously resisted!