Plight of pensionless senior citizens

The life expectancy of Lankans, has been gradually increasing over the past 30-40 years and stands at around 75 years, at present.

Whether this trend is healthy or unhealthy is a billion dollar question! Making budgetary allocations for the maintenance of ‘ non- pensioner’ senior citizens, would present a challenge to the authorities.The majority of this group includes the private sector retirees who comparatively sweated and toiled more than their counterparts in the public sector for 40-45 years; contributing to the GDP and development of the economy.

The current rate for senior citizens’ FDs of 15%, paid up to a maximum of Rs. 1.5 million, was fixed a few years ago when the normal bank interest rates for FDs were around 12 – 13 %.

Those who retired 15 to 20 years ago and are now septuagenarians, and had invested their life’s savings of EPF and gratuities, averaging around 1.5 to 2.5 million, receive a meagre Rs 18,000 a month, plus a negligible amount on the balance few hundred thousand, deposited in normal FDs at a very low 5-6% interest. Due to daily exigencies, most seniors opt for ‘monthly interest’ as they cannot afford to wait one year for the FD to mature. In this case, they get even less than the stipulated 15%.They have taken a ‘huge hit’ with bank rates plunging further. Interest earnings are often hardly sufficient for meeting costly medical care of self and spouse. These figures clearly show why most of these ‘seniors’ become dependent on their families.

Only public service employees seem to be secured. They and certain bank employees, have received a decent pension throughout, and thereafter, their successors as well. A glaring anomaly here is that regardless of whether one is in receipt of a pension or other substantial incomes or not, they are all entitled to the same 15 % as senior citizens. Thus, the senior citizens who are pensionless and have no other income, have to struggle purely on the 15%, plus whatever other meagre savings they may have.

The rate of 15% on a maximum 1.5 million fixed deposit, remains the same even six years after its introduction in 2015. Especially those having to maintain any dependents are more vulnerable now, with prices escalating rapidly. These categories and other impoverished older persons are in dire need of state assistance.

The best option for the cash strapped government is to overcome the challenge by increasing the amount of the deposit at 15% interest rate, to at least, Rs. 2.5 million and even consider an increase in the interest rate to 20%, for those who have reached the age of 70, including those who have no additional fixed incomes, as an initial step, until a lower age limit adjustment is considered at a future date.

The Ministry of Social Welfare introduced a social security and pension scheme in 1996, that provided a pension for “poor elderly persons who had contributed towards the development of the country” and those who had been employed in the informal sector; but the scheme has never been implemented. The Government established a National Charter and National Policy for Elders,which was adopted by the Cabinet of Ministers in 2006, which says: “The mission of the Charter for Senior Citizens is to ensure and reinforce the values of independence, dignity, participation, self-fulfilment, and a good quality of life in the diversity of their situations, in a caring, accepting and respecting community.”

Over to you, Mr. President and the Minister of Finance. K.K.S.Perera Via email