(Draft Report)

SOCIAL SECURITY AND PENSION FOR THE ELDERLY IN NEPAL

Submitted to:

South Asian Network of Economic Institutes (SANEI)

Study Team Mr. Heet Singh Shresth Research Fellow, IIDS & Dr. Vikash Raj Satyal Research Associate, IIDS

Institute for Integrated Development Studies (IIDS) Purano Baneshwor, Kathmandu, Nepal Telephone Number: 4478930/4494519 E-mail: iids@wlink.com.np Fax Number: 4470831
July 2003

Table of Contents
I. II. III. Introduction Ageing Scenario Policies and Programmes III (a) Pension and Retirement Benefits III (b) Allowance for Senior Citizens Current Status and Needs of the elderly: Survey Findings Old Age Homes: A Case Study Need for Social Security in Informal Sector Conclusion and Recommendations

IV. V. VI. VII.

ANNEXES

CHAPTER I: INTRODUCTION
1.1. Background The ageing of the population has become a global issue and presented new challenges of meeting the rapidly increasing needs of the elderly. The last five censuses of Nepal, reveal that the elderly people are increasing continuously both in absolute number and in proportion. The population ageing is rising steadily in Nepal. Another important feature of the elderly population is that it is increasing at a faster rate than the population as a whole. At this growth rate it is estimated that the size of elderly population will double in less than 21 years as compared to the total population which will double in 31 years. The elderly population is one of the most neglected social groups in Nepal. Acute economic pressures, disintegration of joint family system and mobility of population have eroded the relative importance of traditional values and religious norms supportive to the elderly population. Moreover, institutional arrangements catering the needs of the elderly have been far fewer and the coverage limited. Government measures are also lacking in actual implementation. There is a growing recognition of the need to look after the elderly population by the government, private sector and civil society. This has become all the more essential in the context of the International Plan of Action on Ageing as adopted by the Second World Assembly in Madrid. Against this back drop, IIDS proposed to undertake a study on social security, pension and other provisions for the elderly. 1.2. Objectives of the study The objectives of the study were: To assess the ageing scenario-Past, Present and Future To review the policies and programs for the elderly To review the role of the government financing in and running of old age homes To assess views of the recipients of pension and social assistance and its impact To suggest modalities for a comprehensive social security scheme for the elderly. 1.3. Methodology The information to support the study is drawn from both secondary and primary sources. The major secondary sources of information included population census, labour force surveys, population projection, and reports and documents prepared by national and international organizations. A field survey of pensioners, social assistance, other receivers and non beneficiaries was carried out in order to assess the status of the elderly and their needs as well as to solicit their views and suggestions to overcome their problems. The methodology, coverage and findings of the field survey are covered in separate chapters. The study comprises of a demographic analysis of the elders from the census data 2001, a review of the policies and programme of the government including pension and other benefits. The following approaches were adopted in study. i. Questionnaire survey of the elderly from all over the country ii. Study of some selected old age homes located in different part of the country 1

An advisory committee was formed to provide guidance to the study. This committee was composed of the senior officials of the Ministry of Finance, Ministry of Local Development, Ministry of General Administration, Ministry of Women, Children and Social Welfare, Secretariat of the Planning Commission, Central Bureau of Statistics, Office of the Provident Fund, Nagarik Lagani Kosh(civil investment trust), Social Welfare Council, and officials from concerning Non-Governmental Organizations (NGOs). Suggestions of the committee members were taken into consideration at the initial stage of the study, during the preparation of the questionnaire, and at the preparation of the draft report.

CHAPTER II: AGEING SCENARIO 2.1 Background The aging of population in developing countries has presented new challenges of meeting the rapidly increasing needs of the elderly. The proportion of the elderly population has been growing and is predicted to grow further in the coming years. Elderly population is defined as the population aged 60 years or older in the context of Nepal, where life expectancy at birth is almost 60 years and the retirement age is around 58 years. 2.2 Number and Proportion of Elderly Population The last five censuses of Nepal reveal that the number of elderly people is increasing continuously both in absolute number and proportion (Table 2.2-1). In fact, the number of elderly people is increasing and the percentage increase during inter-census period has remained consistently over 25 per cent with an exception of 1961 census. In absolute number it has increased to 1504 thousands in 2001 from 410 thousands in 1952/54. The change in the number of elderly people is significant over the last four decades from 1971 to 2001. For example, the proportion of population 60 years of age and older was 4.9 percent in 1952-54 which reached to 6.5 percent in 2001. The 410 thousands elderly population as of 1952/54 has reached to 1504 thousands in 2001 indicating an increase by 367 per cent over the last five decades. Table 2.2-1: Number and Change in the Elderly Population
Census Year 1952/54 1961 1971 1981 1991 2001* Total population (In thousands) 8286 9413 11556 15023 18491 23151 Population aged 60 and over (In thousands) 410 489 649 857 1071 1504 % Share of elderly (60+ population) 4.9 5.2 5.6 5.7 5.8 6.5 Population aged 60 and over (In thousands) 410 489 649 857 1071 1504 Absolute change (In '000) 79 160 208 214 433 % change 19.3 32.7 32.1 25.0 40.43

*Estimated on the basis of total population of 23,151,423 in 2001. Source: Population and Development in Nepal, CDPS, Vol. 4

2.3 Index of Ageing Index of ageing indicates the scenario of elder population if the population of country is ageing. Index of ageing is the total elderly population as a proportion of the total younger population and depends upon the number of younger population aged less than 15 years and those 60 and over. There is irregularity in the pattern of index of ageing between the census year 1952/1954 to 2001. The lowest index value was found in 1952/54 and highest was found in 2001. A similar pattern of index was recorded in 1971, 1981 and 1991 censuses. The decrease in index in 1981 and 1991 does not mean that elderly population is decreasing; it is a reflection of proportional increase in the population of youths. It should be recognized that this index depends only on the young and the old age population and hence sensitive to errors in reporting of these ages.

Table 2.3-1: Index of Ageing, 1952/54-2001 Census Year Index of Ageing

1952/54 1961 1971 1981 1991 2001 12.9 13.1 13.9 13.8 13.7 16.51

Source: Population and Development in Nepal, CDPS, Vol. 4

2.4 Growth Rate of Elderly Population The share of the elderly population of aged 60 and above to the total population has recorded 1,504,311. An important feature of the elderly population is that it is increasing at a faster rate (3.40 percent) than the population as a whole (2.24 percent) (Table 2.2-1). At this growth rate it is estimated that the elderly population will double in less than 21 years where as the total population will double 31 years. It has been found, the Total Fertility Rate (TFR) continues to fall in the country. Accordingly, the rise of youngest age group will be smaller. But the number and proportion of elderly population will increase. This will have major implications on the individuals, the families and the society as a whole. Table 2.4-1: Inter-census Growth Rates and Total Fertility Rate, 1952/54-2002 Census Total Population Elderly Population TFR
1952/54 1961 1971 1981 1991 2001* 1.40 2.07 2.66 2.10 2.24 1.79 2.42 3.26 2.26 3.40 6.3 6.3 5.6 4.1

*Estimated on the basis of total population of 23,151,423 in 2001. Source: Population and Development in Nepal, CDPS, Vol. 4

2.5 Distribution of Elderly Population by Ecological Regions Nepal is divided in three ecological regions: mountains, Hills and Terai. Terai, the southern belt and with 48.40 per cent of total population, has shared 47.68 per cent of the total elderly in 2001(Table 2.5-1). Similarly, the hills, with 44 per cent of the total population, have shared 44.30 per cent of the total elderly of the nation. Similarly, whereas seven per cent of total population lives in the mountain and the proportionate share of elderly is approximately the same. This region has the least number of elderly in the kingdom.
Table 2.5-1: Population Distribution by Ecological Regions, 2001 (in thousands) Elderly Population Ecological Total Population % share of zones (%) elderly Male Female Total Population 1690 (7.3) 52.71 52.72 105.43 7.01 Mountain 10250 (44.3) 333.27 345.09 680.38 45.23 Hills 11210 (48.4) 369.68 347.51 717.18 47.68 Terai 23150 (100.0) 758.25 746.00 1504.31 100.00 Nepal

2.6 Distribution of Population by Development Regions Nepal is divided in five development regions from east to west. The percentage distribution of elderly people is not uniform in all five-development regions. Western development region contains high proportion of elderly people.
Table 2.6-1: Distribution of Total Population and Elderly by Development Regions, 2001 (in thousands) Region Eastern Central Western Mid-Western Far-Western Total Total Population 5340 8080 4570 3010 2190 23150 Percent 23.08 34.69 19.74 13.01 9.47 100 Total Elderly 346.76 522.03 353.19 151.46 126.31 1504.31 Percent 23.05 34.70 23.48 10.07 8.40 100.00

* Estimated on the basis of total population of 23151423 in 2001 Source: Population Census 2001, National Report, CBS, 2002

2.7 Rural/Urban Differences At the time of 1961 and 1971 census, 16 spatial units were considered as urban centers and covered 3.6 and 4.0 per cent of the total population. The urban population both in 1981 and 1991 census was 6.4 and 9.2 per cent of the total population respectively (Table 2.7-1). But, it jumped to 14.2 percent and urban centers jumped to 58 in 2001. The urban population is on the rise with the announcement of additional urban centers. Table 2.7-1: Distribution of Total and Elderly Population by Rural/Urban Settlements
(in thousands)

Census Year
1961 1971 1981 1991 2001*

Total Population Rural Urban (% of total)

9080 11090 14070 16790 19860 336.22 (3.6) 461.948 (4.0) 956.72 (6.4) 1695.72 (9.2) 32.86.75 (14.2)

Elderly Population Rural Urban (% of total)

473.81 (5.22) 624.59 (5.63) 807.39 (5.74) 999.15 (5.95) 1317.16 (6.63) 17.58 (5.23) 23.65 (5.12) 48.89 (5.11) 84.58 (4.99) 187.15 (5.69)

# Urban Centres
16 16 23 33 58

* Estimated on the basis of a total population of 23151423 of which 19864724 is for rural area and 328675 for urban area, 2001.

2.8 Gender Composition of Elderly Population The gender composition of elderly population has changed over the last five decades. Males in general outnumber females in Nepal. However, female outnumbered male in three earlier census which were 1952/54, 1961 and 1971. The 1981 and 1991 censuses recorded reversal with the male outnumbering female. This trend continued even in 2001 census. Thus, in 2001, there were more elderly male than female. This has happened despite females out-numbering males in the total population of the country. The proportion of male population dominates the proportion of elderly only in the terai region and the magnitude of elderly population comprising of both the 5

male and female is greater in the hills. In other words, more elderly male and female population lives in the hills than in any other region of the country.

Table 2.8-1: Distribution and Growth of 60+ Population by Gender, 1952/54-2001 Year 60+ population Male Female Number as % of Number as % of total Number as % of total population total population population
1952/54 1961 1971 1981 1991 2001 409,761 489,346 648,703 857,061 1,071,234 1,504,311 5.0 5.2 5.6 5.7 5.8 6.5 182300 222400 311000 450900 542700 758300 2.2 2.4 2.7 3.0 2.9 3.3 227300 266900 337600 406000 528400 746000 2.8 2.8 2.9 2.7 2.9 3.2

There has been a steady increase in the proportion of both male and female elderly population from 1952/54 to 2001 in Nepal. The total male elderly comprised 2.2 per cent in 1952/54 and has increased to 3.3 per cent in 2001. Similarly, female elderly constituted 2.8 percent of total population and has reached 3.2 per cent in 2001. The absolute number of male elderly has increased four fold from 1952/54 to 2001, whereas corresponding increase of female elderly is only 3.3 fold only. 2.9 Population aged 75+ The population aged 75+, called as oldest old population, has become important population group to consider after the introduction of the social security programme in the fiscal year 1994/1995 in Nepal. The proportion of oldest old population is increasing after the 1971 census. Its proportion has increased from 0.82 in 1971 to 1.30 in 2001 (Table 2.9-1). Table 2.9-1: Distribution of Population by Aged 75+ Year Total Oldest Old Population (75+) Population Male Female Total
1971 1981 1991 2001 Growth rate (1991-2001) 11,555,983 15,022,839 18,491,097 23,151,423 45,420 (0.39) 75,000 (0.50) 91,322 (0.49) 147,462 (0.49) 4.90% 49,587 (0.43) 69,197 (0.46) 93,843 (0.51) 153,384 (0.51) 5.04% 95,007 (0.82) 144,197 (0.96) 185,165 (1.00) 300,845 (1.30) 4.97%

The oldest old population of 95007 as of 1971 has reached to 300,845 in 2001. This shows 217 per cent over the last three decades. The past data indicate that the oldest old population will increase even in the coming future. 2.10 Marital Status of the Elderly The nuptiality data given in the table below show usual trend but their examinations by census years do indicate some anomalies as well. The never married proportions appear reasonable except for 1981 (for both males and females) and much too high among the males. The 7

widowhood data for 1961 and 1971 indicate usual trend but for 1981 they look doubtful. The proportion of widowed is lower in 1981 than in 1991 both for the male and female and much more so for male. The proportions of divorced/separated population are very small as the institution of marriage is very strong in the Nepalese society. Table 2.10-1: Percent Distribution of Marital Status by Age 60+ and Sex (1961-2001) Marital Status/Sex 1961 1971 1981 1991 2001
Married Male Female Never Married Male Female Widowed Male Female Divorced/Separated Male Female 73.17 32.13 0.98 0.45 24.50 65.73 0.39 0.24 78.95 44.38 1.07 0.62 19.68 54.65 0.30 0.36 80.82 61.04 7.83 6.24 10.92 32.07 0.43 0.65 79.32 49.17 1.29 0.89 18.24 47.54 0.56 1.05 88.30 71.70 1.40 1.20 9.40* 25.10* -

* The data also includes divorced and separated.

2.11 Life Expectancy at Birth, at the Age of 60 and 75 As indicated by the table below the expectation of life at birth has been increasing gradually over the years for both the males and females. The expectation of life at birth for males was 27.1 in 1954. The corresponding figure for females was 28.5 years. These figures increased to 55 and 53.5 respectively in 1991. Based on mortality estimates as used in the population projection (MOPE 1999) the expectation of life at birth for the Nepalese population has reached 59.7 years. Such a significant change in life expectancy is attributed to the improvement of health facilities that have reduced death rate, especially between infant and children during the last decade. The fact that there is increasing trend in life expectancy can also be clearly seen from table 2.11-1 below. Source Table 2.11-1: Life Expectancy at Birth Life Expectancy Year Male Female Total
1954* 1991* 2001 27.1 55.0 57.3 28.5 53.5 57.8 57.5

Vaidhyanathan & Gaige, 1973 CBS, 1993 CBS, 2001

* Estimated. The life expectancy of the elderly in the age of 60 and 75 are given below. It becomes clear that the life expectancy of the elderly female in the ages 60 and 75 is greater than that of male in the same age groups. Sex
Male Female

Table 2.11-2: Expectancy of Life at the age of 60 and 75 Life Expectancy at the age of 60 Life expectancy at the age of 75
14.89 16.15 6.83 7.30

2.12 Literacy Rate among Elderly The overall literacy rate for population 60-64 and 65+ years by sex and their growth over the years is given in Table below. It is seen that during 1971-2001, the total literacy rate of the age group 60-64 and 65+ has increased approximately two fold and, one and half respectively. The literacy rates of these age groups have been increased regularly over the decades. Age Total
60-64 65+ 10.2 10.5

Table: 2.12-1: Literacy of Elderly by Sex 1981 1991 Male Female Total Male Female Total
16.1 16.4 3.8 3.9 13.6 14.3 24.0 24.5 3.1 3.5 18.78 15.64

2001 Male Female

31.90 27.00 5.48 4.07

2.13 Work Participation Rate among Elderly The work participation rate of the elderly is also a major issue in the study of ageing. The work participation rate of elderly is high in agriculture followed by the dependents, domestic workers and disabled. The following table gives the brief information about the work participation rate of the elderly. Table: 2.13-1: Occupational Status of Elderly, 1996 (in hundred*) Occupation Male Elderly (60 and above) Female Total
28.3 0.5 1.4 3.3 1.9 1.9 20.3 12.9 26.0 1.4 2.0 100 *10085 43.3 12.4 Agriculture 0.9 0.2 Cottage Industry 2.6 0.2 Service 5.3 1.2 Buusiness 3.0 0.8 Wage Labour Agr. 3.1 0.8 Wage Labour Non-Agr 5.0 36.4 Domestic Worker 11.7 14.2 Disabled 21.3 30.9 Dependent 2.1 0.7 Others 1.7 2.2 Not Known 100 100 Total Percent *5167 *4916 Number Source: Migration, Employment, and Birth, Death and Contraception Survey, 1996 2.14 Projection of the Elderly Population The number of elderly people has increased over the past 60 years and will continue to increase in the coming years. Assuming their growth rate will be the same as that in the period between the 1991 and 2001 censuses, the rise of elderly population will increase from 1,504,311 in 2001 to 7,892,440 in 2051.

The projected data given below suggests that the elderly population will expand dramatically over the next 50 years both in terms of absolute number and proportion.

Table: 2.14-1: Population Projection for Elderly and Oldest Old by Sex ( in thousands) Year Elderly Population 60+ Oldest Old Population 75+ Male Female Total Male Female Total 2011 1058.88 1036.82 2095.69 238.11 250.70 488.82 2021 1478.60 1440.81 2919.41 384.49 409.77 794.26 2031 2064.70 2002.21 4066.91 620.86 669.75 1290.61 2041 2883.12 2782.36 5665.48 1002.54 1094.69 2097.23 2051 4025.94 3866.50 7892.44 1618.84 1789.25 3408.09
Note: 1. The growth rate is 3.34 for male and 3.45 for female in the age group 60 years and above from year 1991-2001. The same growth rate is applied for the projection from year 2001 to 2051. 2. The growth rate is 4.91% for male and 5.04% for women for oldest old/annum during 1991-2001. The same growth rate is applied for projection of oldest old during 2001 to 2051 using the total population of the same age group of 1991-2001.

10

Chapter III: Policies and Programmes

An Overview 1. The main root for a state sponsored social security system comes from the fundamental rights enshrined in the Part 3 of the constitution of the Kingdom of Nepal, 1990. The provision for the affirmative action by the state for the protection and advancement of the interest of women, children, the aged and physically or mentally retarded persons has been made under the Fundamental Rights to Equality. The constitution has visualized to create a Welfare State based on economic, social and political justice protecting the life, property and liberty of the people. The term "social security" has been specially mentioned under Section 9 of the State Policies of the constitution. The paragraph reads as follows: "The state shall pursue such policies in matters of education, health and social security of orphans, helpless women, the aged, the disabled and incapacitated persons as will ensure their protection and welfare." 2. The Civil Code has also indicated a legal provision related to the elderly in the chapter on partition, which is as follows: "While effecting a partition between parents and sons, the deed of partition shall disclose the name of the son or daughter with whom the parents wish to live. Such son or daughter shall keep the parents with him or her and look after them. In the event the parents do not have sufficient means for supporting themselves or the son or daughter they are living with do not have any offspring, then the separated son or daughter shall support them according to their means and provide them sustenance and take care of them". 3. Pursuant to the constitutional provision in 1995 the government introduced for the first time, a non-contributory, universal social security programmes like allowance for senior citizens of Rs. 100 per month to those in 75+ years of age bracket. Subsequently the programme was expanded to include helpless widows of 60+ years old and physically and mentally retarded person. Free medical treatment and help to old people were promised. However, the allowance distribution programme only was made effective in practice. 4. The Ninth Plan (1998-2000) has set aside a separate chapter dealing with "Helpless, Disabled and Senior Citizens". Under the long-term concept it is stated that the state will protect the rights of old, helpless and disabled citizens in providing essential service and facilities, and their valuable experience, skill, knowledge and capability will be mobilized for national development. In addition the state will guarantee social and economic justice to these people. 4.1 In its objective the plan states that the senior citizens are assets of the nation because they carry social values, tradition and culture. The state will properly honor and protect senior citizens, helpless widow and disabled citizens together with mainstreaming their capability, experiences, knowledge and peculiarities in national development. The experience of elders will be capitalized for national development. Elderly homes will be established in all five-development regions. All senior citizens, helpless widows and disabled citizens will be ensured with social and economic security, and their rights will be guaranteed and preserved. 11

4.2 Policies in respect of the senior citizens in the Ninth Plan are as follows: With the objective of enabling senior citizens to lead a life with more dignity, family based security system will be developed, in which family caring for elders will be provided facilities and given priority on public services. In the background of growing population, senior citizens will be classified in different categories on the basis of economic capability. Degree of vulnerability will be taken into account while providing allowances. All zonal hospitals will have geriatric ward. Senior citizens will be treated in subsidized rate in hospitals and health centers. Efforts will be made to make available some concession in the fees for treatment in private nursing homes and clinics. Mobile health services will be also arranged for their treatment. Elderly homes will be established in all regions, keeping in view the need for the welfare of senior citizens. NGOs and private sector will be encouraged for this purpose. Income generating activities based on the capacity, skill, knowledge and interest of senior citizens will be initiated. The experience of senior citizens will be utilized in different aspects of nation building. Senior citizens will be given concession also in public transportation and entertainment fees. 4.3 Programmes for implementation with regard to senior citizens as envisaged in the Ninth Plan are mainly the following: VDCs and municipalities will maintain records of senior citizens by updating two times a year. Senior citizens will be granted monthly allowance and facilities based on updated record of citizenship and voters identity card. Geriatric ward will be established in central and regional hospitals in order to provide regular health check-up and treatment at subsidized rate. One model oldage home will be established in each development region and such home will have the provision of religious discourses. Similarly senior citizens' clubs will be established in village and small localities. Local bodies, NGOs and private sector will be encouraged to carry out these activities. Reservations of seats as well as concession in ticket will be provided in public transport. Ability and experience of senior citizens will be utilized in local level policy making, playing the role of motivator in social and economic activities, sharing the experience with school students and participating in local level committees. 5. His Majesty's Government has announced "Policies and Operational Strategy" with regard to the senior citizens in 2002. 5.1 Major policies are the following: a) Implement programmes aimed at utilizing the knowledge, skills and capability of senior citizens by the government and other organizations. b) Formulate necessary laws and amend the existing laws and regulations so as to guarantee social security and protect interests of the elderly persons. 12

c) Launch different programmes to offer respect to senior citizens in the family and society and honor such organizations through concessions and awards. Curriculum will be developed in the academic institutions to promote respect towards the senior citizens. d) With the objective of fulfilling the basic needs of the elderly person by means of financial support to them, efforts will be made to launch programmes such as national pension scheme, social security fund, allowance for the elders, set up homes for elderly people and better manage the ongoing programmes. e) A committee will be set up at the central level to coordinate, monitor and follow-up programmes related to senior citizens. Local bodies will coordinate such programmes at the district level. 5.2 Major highlights of the operational strategy of the government towards senior citizens are as follows: a. National Pension Scheme will be formulated and implemented in the context of an extensive social insurance and economic security. b. Family based security system will be developed. c. The property of the senior citizens will be protected and a provision will be made making it mandatory for sons and daughters to provide certain percentage of their income to their parents. d. A "Senior Citizen Welfare Fund" will be set up at the national level to launch appropriate activities of social services and security for the elders. e. Law will be amended to introduce the "Will System of property inheritance". f. Geriatric ward will be set up gradually in all the hospitals. g. For the purpose of entertainment and public interaction senior citizens' clubs will be set up. 6. The Tenth Periodic Plan (2002-2007), which has commenced from July 2002 has included a separate section dealing with "Senior Citizens Helpless, Disabled and Other Social Security". The objective of the ninth plan has been continued in the tenth plan also. It is again stressed that the knowledge, skill and experience of the senior citizens will be utilized in development and social works apart from programmes to honor them. Strategies, Policies and Programme of the Tenth Plan are briefly mentioned below: 6.1 Strategies: The experience of senior citizens is very useful in all round development of the country. On the other hand, the degrading or weak conditions in terms of physique, economic, public relations and family decisions their life becomes difficult, therefore, society should have to provide social security for them. The government's responsibility is to create an environment to make the life of senior citizens easy, respectable and useful to development process. On these backgrounds, the Plan has adopted the following: 1. Utilize the experience of senior citizens into national development process (e.g., policy making, income generation, and advice/counseling). 2. Review the existing laws relating to senior citizen and reform to ensure their economic, social and human rights. 3. Develop a network for better work and implementation regarding elderly issues. 4. Implement social security and rights oriented programs. 13

6.2 Policies: Based on the above strategies the following policies will be adopted to ensure the rights of senior citizens: 1. The existing laws relating to senior citizen will be reviewed and reformed to ensure their economic, social and human rights and utilize their qualifications, knowledge, experience and skills for the development of the country. 2. A network to work on the issue of senior citizens will be strengthened. 3. Local bodies, non-government organization and civil society will be developed. 4. Model elderly homes will be developed in all five-development regions and expanded and it will be encouraged to establish/operate senior citizen's clubs. 5. Geriatric ward will be established in all hospitals (central, zonal and regional). 6. Awareness will be raised to develop a culture in society to respect elders as well as school curriculum will be developed for this purpose. 7. Up to date record will be maintained in all local bodies. 8. The present allowance for senior citizen will be reviewed and taken appropriate measures. 9. Asocial insurance will be implemented for senior citizens. 6.3 Programs: The following programs will be implemented to protect and promote the rights of senior citizens during the period of Tenth Plan: 1. Review the existing laws relating to senior citizen and reform them to ensure senior citizen's economic, social and human rights. 2. Develop a national plan of action and network to implement programs for the rights and development of senior citizen. 3. Community based religious, recreation, income and generation activities will be conducted, and local bodies, non-government organization and civil society will be encouraged to carry out such activities. 4. Raise awareness through various ways of communication to promote a culture to respect seniors. 5. Provide concession for senior citizens in health, transport and recreation facilities. 6. Establishment of Geriatric ward in all hospitals (central, zonal and regional) including private hospitals, and expansion of Mobile clinic and financial support for medical facilities of senior citizens. 7. Up to date record will be maintained in all Village Development Committees. 8. Collaboration and coordination among local bodies, non-government organizations and civil society to work on the issue of senior citizens (community based senior citizen clubs, elderly homes). 9. Establishment of a Welfare Fund for senior citizens. 10. Development of school curriculum incorporating the rights and respect for senior citizen. 11. Establishment of a social insurance for senior citizens. 6. National Action Plan on Senior Citizens Ministry of social welfare, HMG/N has recently formulated a National Action Plan on Senior Citizens which is going to be implemented from this year. The action plan is mainly designed to implement the policies and programmes enunciated in the Plan documents. It specifies the 14

activities that are to be carried out within a definite time frame varying from a year to the subsequent plan period and the responsible agencies for implementation. The activities cover different areas of the programme for senior citizens such as economic, social, health service, education and recreation, legal, participation and coordination. It is expected that this action plan will go a long way to helps implement the government policies and programmes for the elderly in the coming years. III (a) Pension and Retirement Benefits 1. Current Status: 1. Government employees are entitled to receive the following benefits on their retirement from service; (a) Pension (b) Gratuity (c) Payment for medical expenses (d) Payment for accumulated leave Pension is provided to civil servants, military, police and teachers. The standard retirement age is presently 58 for the civil servants, which may vary in the case of other services. As for example, the retirement age for teachers is 63 years whereas the lower ranks of the military and police may retire at age 46 - 48. The vesting requirement for a civil service pension is 20 years and 16 years for the military and police. The pension is calculated as follows: Total service period x Amount of salary last drawn AnnualPension = 50 Pensions are increased by 2/3 of any increase in salary provided to the employees.

2. People who leave before completing 20 years of service do not qualify for a pension, but do receive a gratuity if they are employed for at least 5 years. The gratuity is paid as a lump sum, which is calculated on the basis as indicated below: Gratuity (per year employed) Years of Service 5-10 yrs month's salary 10-15 yrs 1 month's salary 15-20 yrs 1.5 month's salary 3. Apart from the government employees, pension facility is provided in some banks and public corporations as well. The number of pension recipients is increasing every year. This trend is likely to continue in the coming years. Current status of pensioners in different categories is given in the following table:

15

1. 2. 3. 4. 5. 6. 7. 8. 9.

Table 3-1: Number of Pensioners in different categories/groups Groups Number Year Civil Servants 28542 July 2002 Police Personnel 20497 " Army: a. Personnel 30166 " b. Family 6198 " School Teachers 8334 July 2003 Tribhuvan University 1200 July 2003 Constitutional Bodies 107 July 2002 Palace and Others 448 " Banks: July 2003 a. Nepal Rastra Bank 1,707 b. Rastriya Banijya Bank 630 Corporations: a. Nepal Electricity Authority 1332 July 2003 b. Nepal Telecom. Corporation 558 July 2003

4. With the increase in the number of retirees from service financial liability in providing pension to such employees is also rising in a significant way. As a proportion of total regular expenditure pension expenditure has more than doubled in 2001 as compared to 1995/96. Similar is the case as regards the proportion of pension expenditure as compared to total revenue. Total budgetary expenditure on this item for the last eight years is given below:
Year (1) 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04* * Estimate. Pension Grants (2) 584.7 728.6 1028.6 1261.1 1372.0 1573.1 2914.0 2753.5 3262.5 Table 3-2: Pension Expenditure Regular Revenue Expenditure (3) (4) 21561.9 27893.1 24181.1 30373.5 27174.4 32937.9 31047.7 37251.0 34523.3 42893.8 42769.2 48893.6 49149.5 50515.2 57445.1 57150.2 60555.0 62527.0

(Rs. in million) PG as % of PG as % of TRE Revenue (2/3*100) (2/4) 2.7 2.1 3.0 2.4 3.8 3.1 4.1 3.4 4.0 3.2 3.8 3.2 5.9 5.8 4.8 4.8 5.4 5.2

The Public Expenditure Review Commission, which was set up by the government, has recommended that the pension system should be made funded and contributory for all employees who are newly recruited. The existing employees can be given pensions under the present mechanism. It has also recommended to entrust the Citizens Investment Trust, a government owned corporation, for the operation and management of the funded pension system. In the Budget respect of 2000/2001 it has been proposed by the government to establish a Pension Fund, which is as follows:

16

"In view of annually increasing liability in providing pension to retired employees, a feasibility study will be carried out for the establishment and operation of a "pension fund" on a joint contribution from the government and the employees. It is envisaged that the amount annually set aside for pension will be deposited therein so that it can earn interest and also do investment". 5. Employee's Provident Fund has offered since 1996 a non-contributory pension to its members. It pays an annual pension of 5 percent of the members' deposit at the time of retirement. The number of years for which this pension is paid is calculated according to the number of years over which the member has made contributions as shown in the following table:
Period of Contribution Less than 5 Years (Minimum 3 Years) 5-10 Years 10-15 Years 15-25 Years Over 25 Years Table 3-3: EPF Pension Scheme Annual Pension 5 percent of P.F. withdrawal at the time of retirement " " " " Period of Pension 1 Year

3 Years 5 Years 7Years 9 Years

The number of beneficiaries and pension expenditure incurred by EPF is increasing in a significant way, which is shown in the following table:
Table 3-4: Number of Pension Beneficiaries and Expenditure Years Number of beneficiaries (Rs. in thousand) 1996-1997 2730 3,364 1997-1998 3611 7,065 1998-1999 3806 8,473 1999-2000 4246 9,987 2000-2001 4535 11,816 2001-2002 8011 32,077 2002-2003 (nine month) 7218 49,871 Table 3-5: Pension Expenditure of Banks and Corporations (Rs in 1000) S.N. Banks and Corporations Pension Expenditure in 2002/2003 1. Nepal Rastra Bank Rs.17977 2. Rastriya Banijaya Bank Rs.31000 3. Nepal Telecommunication Rs.17000 4. Nepal Electricity Authority Rs.33700 6. Citizens' Investment Trust, which is a savings and investment institution created in 1990, operates various schemes including a pension scheme to benefit the depositors at the time of retirement. The employees' Savings Growth Scheme is a voluntary programme open for all employees in the public and private sectors to contribute either 5 or 10 percent of their monthly salary for a period of 5 to 10 years. Interest earned within the scheme is retained and paid out with principal at the end of the programme period or retirement. Another scheme, which is called as the investor account, receives voluntary contributions from individuals. Participants in this scheme can't withdraw funds prior to retirement at which point they receive a lump sum. The participants choose the investments for their own account. The Pension Scheme is also a

17

voluntary retirement scheme, which is targeted at companies. The participating companies have to provide a defined benefit pension to their employees. The company takes all the risk of meeting the defined benefit liability. The trust has recently introduced a new scheme with the objective of enlarging the coverage of pension facility to benefit the elderly. This is again a voluntary programme in which any individual proprietorship firm, employee and worker is allowed to participate. Under this scheme participants will be paid principals along with the accrued interest at the completion of sixty years in age.
Issues 1. There is a growing concern that the pension costs will escalate in the coming years. This caused mainly by the increase in the size of the civil and other services on one hand and the increase in the pension benefit on the other.

2. A section of the elderly persons have benefited from the pension scheme such as retirees from services whose number is about 100,000 at present. Some of the elderly persons have been recipients of the old age allowance provided by the government to persons with the age of more than 75 years. In addition government is providing widowhood allowance to those who are more than sixty years of age. The total number of beneficiaries under these schemes is hardly half a million, which is quite limited in coverage as compared to the total population of elderly persons.
III (b). Allowance for Senior Citizens

1. His Majesty's Government initiated a programme to help the elderly persons in Fiscal Year 1995/96, under which an allowance of Rs. 100 per month was provided to persons who were over 75 years in age. In the following fiscal year the programme was expanded to provide such allowance to the helpless widows of 60 years in age and disabled persons of more then 16 years in age. In addition a lump sum of Rs. 2000 was made available to those elderly persons who were over 100 years in age. The amount of old age allowance has been increased from Rs 100 to Rs. 150 per month since 1999 in recognition of the international year of the old. 2. In the same year the Ministry of Local Development has introduced necessary guidelines for carrying out this programme, which is entitled as Social Security Programme. The guidelines have been prepared with the objective of clarifying the procedures for verification of the target group, calculation of age, issuance of identity cards, funding arrangement, record keeping, monitoring and supervision. As per the guidelines the allowance is distributed through the ward offices of the municipalities in the urban areas and the office of the Village Development Committees in the rural areas. The Village Development Committees and Municipalities are also authorized to increase the amount of allowance from its own resources as required. In order to recommend the applicants at the local level an all-party committee is formed which is chaired by the chairperson of VDC & Municipalities. 3. The number of beneficiaries and the amount released by the government under the annual budget for this programmes is given below:

18

Fiscal year 1995|1996 1996|1997 1997|1998 1998|1999 1999|2000 2000|2001 2001/2002

Table 3-6: Number of Senior Citizenship Allowance Recipients and Released Amount (Rs. million) Sinior Helpless Disabled Total Citizen widow _ __ _ 346874 _ _ _ 368040 149502 160040 3198 312740 173834 203120 3645 380599 173529 208432 3641 385602 193477 227694 3667 424841 195449 229826 3696 428971

Total budget

280 350 400 530 530 580 580

4. Some suggestions for the effectiveness of the programme are as follows: a. Since this is a national level programme it should be made effective in all districts. b. Availability of the allowance on a regular basis should be ensured both in the urban and rural areas. c. Record keeping system at the ward level should be improved. d. Adequate provision should be made in the annual budget taking into account the total number of elderly persons. For example in 2001 budgetary provision has been made for about 174000 persons only as against the total number of elderly persons which was estimated to be around 300000. This has also caused difficulties in the distribution of allowances. Some of the elderly persons who have been interviewed in the course of a brief study have emphasized that this programme has been helpful and should be continued by the government. Moreover, the amount of allowance should be revised in view of the rising prices.
Medical treatment facilities for elderly

Apart from providing monthly allowance to the elderly persons, medical treatment facilities have been made available to those of 65+ age for local level treatment. A sum of Rs2000 is provided for such treatment in one instalment, which should not exceed Rs4000 in a year. This programme is implemented through a committee formed at the local level. This programme is currently under implementation in 17 districts.

19

Chapter IV: Current Status and Needs of the Elderly - Survey Findings 4.1 Methodology

4.1.1 Field/questionnaire management

Field survey was done in the months of April May, 2003. There were 9 teams to conduct field survey composing of 18 persons of whom 7 were female. Survey was done in all of the five development regions. Survey districts were selected from all the five development regions with ecological distribution of Mountain, Hill and Terai. Only Terai of the Central region and Mountain of the Mid Western and Far Western regions were not surveyed due to resource constraint. As ethnicity of the elderly was also of interest ethnic pocket areas like Dhankutta for Rai, Rasuwa for Tamang, Nawalparasi for the Kewat and Morang for Rajabansi were also covered. Similarly survey areas were identified for the occupational castes like Damai/kami in Baitadi. As the different retired jobholders could be located in the capital Kathmandu and Lalitpur districts were given more weightage. There were six sections of the questionnaire. Section A, to all (general) Section B, to regular pension holders Section C, to family pension holders Section D, to the recipients of gratuity Section E, to the recipients of senior citizen allowance (SC Allowance), disabled allowance, and helpless widowhood allowance Section F, to those who receive no benefits. The first section of the questionnaire was the general section, which was asked to all the selected elderly along with one of the other five sections which ever was applicable. An English translation of the questionnaire is given in Appendix 7. Lists of the eligible elderly were collected with the help of the VDC officials, village elites or bank officials. Monthly pension are collected from the bank mostly at fixed dates from where information regarding the residence of pension holders were obtained. During the questionnaire survey old-age homes at five development regions were also visited to get information regarding the management, future plan, and problems of these homes.
4.1.2 Sampling Scheme

The whole sampling was done under the criterion such as ecological diversity, development regions, and type of different beneficiary recipient, sex and urban/rural differences. There are three ecological regions in the country viz. mountain, hill and terai and five development regions viz. eastern, central, western, mid-western, and far-western. In total 24 districts were enumerated out of the total 75 districts in the country but some districts were underrepresented due to the small sample size. The under representation was due to the fact that they were included while enumerating the adjoining border districts. There were 9 such under-enumerated districts having less than 10 sample. A description of the sampled area is given in the map of Appendix 1. There were 14 urban centers and 22 rural VDCs enumerated. Similarly by the type of social allowance holders the elderly were divided as the different questionnaire B, C, D, E and F described above. Further these allowance receivers were divided by their previous wok place such as civil service, 20

bank, corporation, school/collage, police/military, NGO/INGO and not working in any of the above mentioned formal sectors.
Table 4.1.2 - 1 Sample Distribution of Elderly N Development Region Eastern 224 Central 413 Western 307 Mid Western 100 Far Western 102 Ecological Region Mountain 106 Hill 490 Terai 550 Rural/Urban Rural 413 Urban 733 Sex Male 744 Female 402 Type of Benefits Pension 560 Family pension 79 Gratuity 65 Senior citizenship/widowhood/disabled allowance 375 Double allowance* 64 Without any benefits 131 Type of previous work Civil 193 Military 97 Police 48 School/collage 43 Bank 132 Corporation 47 Never in service 586 Total 1146

% 19.5 36.0 26.8 8.7 8.9 9.2 42.8 48.0 36.0 64.0 64.9 35.1 48.9 6.9 5.7 32.7 5.6 11.4 16.8 8.5 4.2 3.8 11.5 4.1 51.1 100.0

Note: The 64 elderly who are taking two allowances were counted double in other two different allowance category

Questionnaire were administered to different respondent categories separately, in quota sampling scheme so that sufficient number of sample could be obtained for the different categories. The target sample size was 1000 but considering the possibility of having low quota extra number of questionnaires were administered for each different category. The final number of total response thus received is 1146. The distribution of sample for each category is shown in 21

Table 4.1.2-1 above. There were 64 elderly who were taking double allowance and are counted in two different category so that the total size by type of allowance will exceed 64 from the total sample size of 1146.
4.1.3 Limitations

The following limitations were applied to the study. List of senior citizenship allowance holders was not available at the centre hence the local villagers/VDC Officials at the place of selected VDCs and municipalities were consulted for the required list. List of elderly between the age of 60-75 was not available even at the VDC offices hence local people were consulted for the information. In Nepal the retirement age in the government service and in most of the other offices is 58 and we have defined an elderly as a person above 60 years. But the life expectancy at birth is 58 years. Hence seeking an elderly person above the age of 75 as our respondent who is physically fit to answer our questionnaire was often very difficult. Hence the respondent were selected not in a random basis but in the basis of information obtained from various informants like VDC officials and local peoples. During sampling design, consideration for gender was not done so that the result will not reflect gender balance. Similarly some unbalance in the rural/urban distribution is found as there is more urban samples.
4.2. Survey Findings

4.2.1 Demographic Feature By age, elderly are found mostly in the age interval of 60-64 and are gradually decreasing as the age increases (Table 4.2.1 - 1). By sex about 65% were male compared to 35% female. Similarly by marital status about 65% were found married and 34% widow/widower. It was further analysed by sex composition of the age and marital status of the elderly. By caste/ethnicity about 36% were Brahman followed by Newar 20% and Chhety 18%. There were about 17% of the hill ethnic caste, 4 % of the terai ethnic caste and 3% of the occupational caste. The classification of the caste and ethnic groups is done as according to the footnotes of Table 5.1-1. Table 4.2.1- 1: Elderly by Age, Sex and Marital Status N % Age 60-64 417 36.4 65-69 229 20.0 70-74 158 13.8 75-79 145 12.7 80-84 121 10.6 85+ 76 6.6 Total 1146 100.0 0.0 Marital Status Married 742 64.7 Unmarried 10 0.9 Widow/er 391 34.1 Divorce 3 0.3 Total 1144 99.8

22

Caste/ethnicity Brahman Chhetry Newar Hill ethnic1 Teri ethnic2 Occupational caste3 Other caste4 Total
Note :

416 211 223 192 44 39 21 1146

36.3 18.4 19.5 16.8 3.8 3.4 1.8 100.0

1 Hill Ethnic includes, Gurung , Magar, Tamang, Lama, Ghising, Rai, Ghale and Thakali 2 Terai Ethnic includes, Rajbansi, Tharu, Kayasta, Halawai and Kewat 3 Occupational caste includes, Kami, Sarki, Pode, Chayme, Darji, Teli, Sudi, Tatma, and Pasawan 4 Other caste includes, Nepali, Gangai, Chaudhari, and Majhi

In Table 4.2.1- 2 is shown the marital status and age distribution of elderly by sex. It shows that out of the total male interviewed most are married where as among female most are found widower. This shows that with spouse dead the social dependency of the elderly female is higher compared to elderly male. The median age for male is 66 whereas that for female is 70. This shows that the elderly females are expected to live longer.
Table 4.2.1- 2: Family Size, Marital Status and Age distribution by Sex Male Female Total N % N % N % Marital status Unmarried 6 0.8 4 1.0 10 0.9 Married 653 87.8 89 22.1 742 64.7 Widowhood 84 11.3 307 76.4 391 34.1 Divorce 1 0.1 2 0.5 3 0.3 Total 744 100.0 402 100.0 1146 100.0 Age group 60-64 309 41.5 107 26.6 416 36.3 65-69 142 19.1 87 21.6 229 20.0 70-74 97 13.0 61 15.2 158 13.8 75-79 84 11.3 61 15.2 145 12.7 80-84 69 9.3 53 13.2 122 10.6 85+ 43 5.8 33 8.2 76 6.6 Total 744 100.0 402 100.0 1146 100.0 Median age 66 70 67 Total family size 1 12 1.6 32 8.0 44 3.8 2-3 82 11.0 53 13.2 135 11.8 4-5 199 26.7 108 26.9 307 26.8 6-7 210 28.2 108 26.9 318 27.7

23

8-9 128 10+ 113 Median Family size 60 + aged member One person 433 Two person 295 > Two person 16 Total living children No children* 21 1-2 135 3-4 341 5+ 241 Total 738

17.2 15.2 6

58 43

14.4 10.7

186 156

16.2 13.6

58.2 39.7 2.2 2.8 18.3 46.2 32.7 100.0

327 67 8 28 71 152 147 398

81.3 16.7 2.0 7.0 17.8 38.2 36.9 100.0

760 362 24 49 206 493 388 1136

66.3 31.6 2.1 4.3 18.1 43.4 34.2 100.0

* 'No children' is calculated form the married elderly excluding the unmarried cohort.

Table 4.2.1 2 shows that elderly are living mostly with the family of size 4 to 7. The median household size is 6. Also we can expect a second elderly in the household beside the interviewer with probability 0.29. Most elderly have 2-4 living children (42%) and some have more than five living children (37%). The median size of living children is 3. Education is a vital quality for the people. If elderly are educated they can support the family economically and socially. It is seen in Table 4.2.1- 3 that about 37% of the elderly are illiterate.
Table 4.2.1-3: Education of the Elderly by Sex
Education Male Number % Sex Female Number % Total Number %

Illiterate Just Literate 1- 5 Class Under SLC SLC IA Graduate and above Total

98 141 29 100 80 91 205 744

13.2 19.0 3.9 13.4 10.8 12.2 27.6 100.0

323 40 3 8 6 4 18 402

80.3 10.0 0.7 2.0 1.5 1.0 4.5 100.0

421 181 32 108 86 95 223 1146

36.7 15.8 2.8 9.4 7.5 8.3 19.5 100.0

By gender out of 744 male 98 are illiterate and out of 402 female 323 are illiterate (Table 4.2.1- 3). This shows the illiteracy ratio of about 13% for male and 80% for female. Of the remaining 63% total elderly who are literate 14% of the elderly can just read and write. This shows a miserable status of education in the elderly population especially among female. When asked who makes the household decisions 77% of the elderly said that it was under their own control (Table 4.2.1- 4) and 14% said that their son or daughter-in-law who makes the household decisions. It indicated a peculiar social phenomena that is still prevalence in the 24

country to give the elderly proper respect for the household decisions. Although most elderly reported as self decision maker of the household further question was asked about the type of decisions for which they were consulted. About 63% said they were consulted for all types decisions followed by only on social activity (26%) which includes matter related to childrens marriage/schooling and about festivals.
Table 4.2.1- 4: Household Head Decision Making and Skills Who makes the household decisions? N Self 885 Husband/Wife 61 Son/Daughter in Law 162 Daughter 17 Sister 15 Brother/Daughter in Law 6 Type of Decisions Made by the Elderly (Multiple response) All major decisions 736 Economic Activity 211 Social Activity 295 No opinion is taken 104 Ownership of the house Self Ownership 1049 Rented 47 Son 31 Married Daughter 8 Governmental Residence 1 Other 10 Skills % 77.2 5.3 14.1 1.5 1.3 0.5

63.4 18.4 25.7 9.0 91.5 3.8 2.7 0.7 0.1 0.9 61.0 16.9 6.7 3.0 2.9 2.8 2.2 1.7 1.4 1.3 1.2 5.2 1.2 10.6 10.7 8.8

Know nothing special Administration/Banking/service Wool work/knitting/carpet/loom/sewing Planning/research Technical/engineering Religious work/Bhajan/Yoga Agriculture Social work Household work Health work/doctor Writing How can the nation benefit from your skill? From writing/seminars/advice If tries to make institutional linkage Do not know If given opportunity to work in financial organisation Develop mechanism to use their indigenous knowledge N 25

699 194 77 34 33 32 25 20 16 15 14 60 14 121 123 101 1146

As regard to the ownership of the house 91% elderly owns the house themselves 4% are living in the rented house and 3% are living in their sons house. In Nepal the legal ownership of house and other fixed property generally remains with the elderly until their death although it may be the son/s who makes economic decisions when their parents are physically weak. When asked about their skills 61% reported to have no special skills (Table 4.2.1- 4). About 17% mentioned skill in administration/banking, 7% skill on wool works, knitting, carpet, and sewing, 3% research skills, and 3% technical skills. When asked how the society could use their skill they said that they could still work given the appropriate opportunity for work.
4.2.2 Physical Activities

Despite their age, elderly are found engaged in some household chores. But the gender disparity in the regularity of the household work can also be found. Table 4.2.2- 1 shows that elderly are regularly found engaged in shopping (29%) and cleaning (28%) followed by cooking (17%). As regards to the regular involvement hill as well as central region shows the maximum involvement. By sex female are found more regularly involved in cooking and cleaning whereas male are found more regular in shopping and child care. By type of respondent, the highest involvement in cooking is seen in never in service (62%), and in cleaning (44%) and shopping (43%) and child care (40%) by government workers (retired).
Table 4.2.2 - 1: Regularity of the Activities and Regular Involvement by Development Region, Ecological Regions, Sex, and Type of Respondent
Cooking Cleaning Percentage Shopping Child Care Other activities* 1.3 1.0 97.7 Regularity of activity Regular 17.1 27.7 28.6 5.7 Sometime 36.4 41.0 33.2 11.8 Not at all 46.5 31.3 38.1 82.5 Only Regular involvement Ecological Region Mountain 18.9 10.1 10.4 20 Hill 48.0 44.8 45.7 41.5 Terai 33.2 45.1 43.9 38.5 Development Region Eastern 14.3 19.9 18 21.5 Central 35.2 32.8 36.3 56.9 Western 23.5 24.6 23.2 10.8 Mid-western 6.6 7.6 10.7 6.2 Far-western 20.4 15.1 11.9 4.6 Sex Male 24.0 48.3 69.8 66.2 Female 76.0 51.7 30.2 33.8 Type of respondent Government 29.6 43.8 43.3 40.0 Bank 6.6 8.2 18.9 21.5 Corporation 2.0 5.4 10.1 4.6 Never in service 61.7 42.6 27.7 33.8 Total (%) 100.0 100.0 100.0 100.0 Total N for regular involvement 196 317 328 65 * Other activity involves Cattle grazing, kitchen gardening, and labour work in others house

0.0 46.7 53.3 13.3 46.7 6.7 6.7 26.7 53.3 46.7 53.3 6.7 6.7 33.3 100.0 15

26

4.2.3

Household Facilities

To understand what type of basic facilities and assets they possess some questions were asked about the source of drinking water, energy, availability of toilet, type of housing, and other facilities like radio, television etc. Table 4.2.3 - 1 shows that about 72% got their drinking water from the supply line (piped water), and 22 % used tube-well. It is found that 92% household use electricity for lightning and 86% of the household has toilet. When asked about the type of house they are living 61% said that they were living in brick house, 21% in semi-brick house and 19% in thatched houses.
Drinking Water % Pipe Water 71.9 Tubewell 22.1 Kuwa/Inar/well 4.8 Stone-tap 1.2 Source of Lightning Electricity/Gas 1053 91.9 Kerosene and Other 93 8.1 Availability of Toilet Yes 983 85.8 No 163 14.2 Type of House Brick 696 60.7 Semi Brick 236 20.6 Straw 214 18.4 Number of House Hold having the transportation communication facilities Car/Jeep 56 4.9 Motorcycle 286 25.0 Cycle 436 38.0 Telephone 542 47.3 Radio 895 78.1 Television 834 72.8 Computer 124 10.8 Total 1146 100.0 Consumer Durability Index * 0 1-25 25-50 50-75 76-100 0 1090 56 0 0 N 0 95.5 4.9 0 0 %
* Consumer durability Index is calculated as, Car = 45, Telephone = 30, TV = 10, Motorcycle = 8, Cycle = 2. Total = 100. Note: For the calculation of Consumer Durability Index, selection of weightage follows the report of Dr. Rajan et al, of Economics of Pension and Social Security in South Asia: Special Focus to India, Sri Lanka and Bangladesh, SANEI, 2002

Table 4.2.3 - 1: Household facilities N 824 253 55 14

When asked about other facilities of transportation, communication and mass media such as possessing a car, motorcycle, cycle, telephone, radio, television and computer it is found that television and radio is possessed by a large majority (Table 4.2.3- 1). About 78% have radio and 27

73% have television, 11% have computer, 5% have car, 25% have motorcycle and 38% have cycle. As radio and television is found prevalent among elderly government, NGO and other grass root organisations could use these media exclusively for the benefit of the elderly.
4.2.4 Living Arrangement

Table 4.2.4- 1, shows that 47% of the elderly are living in the joint family, 28% are living with their married sons, 13% living with their spouse and only about 6% are living alone. Most of these living-alone are female (12%). Female elderly are mostly living with their married sons.
Table 4.2.4 - 1: Percentage distribution of Living arrangement and preferences of the elderly Male Female Total Living with Joint family 56.3 29.4 46.9 Married sons 19.4 44.0 28.0 Spouse 16.9 6.2 13.2 Alone 2.3 11.9 5.7 Unmarried sons 3.8 5.5 4.4 With others 1.3 3.0 1.9 Living preferences Alone/spouse 13.7 9.0 12.0 Joint family 55.0 35.8 48.3 Married son 28.9 44.8 34.5 Daughter 1.2 4.5 2.4 Oldage home 2.0 5.2 3.1 Other 3.2 3.4 3.4 Living preference by marital status Unmarried Married Widow/er Divorced Total Alone/spouse 40.0 14.0 7.7 0.0 12.0 Joint family 30.0 56.1 34.3 0.0 48.3 Married son 0.0 28.2 47.1 66.7 34.5 Daughter 0.0 0.9 4.9 33.3 2.4 Oldage home 20.0 1.8 5.1 33.3 3.1 Other 30.0 2.9 3.6 0.0 3.4 N 10 742 391 3 1146

When asked about the preferences for living arrangements Table 4.2.4- 1, shows that highest percentage of elderly were found to prefer to live in joint family (48%) followed by living with married son (35%). Only 3% elderly prefer to stay in the oldage homes. Majority of unmarried preferred to stay alone or with spouse (40%), married preferred to stay in joint family (56%), majority divorced preferred to live with their married son (67%). By sex male gave more preference to stay in joint family (55%) and female preferred to stay with their married son(45%). Table 4.2.4- 2, shows that about 59% elderly have their son or daughter living apart from them. Of these elderly 80% said that they seldom interact with their children. About 16% used to 28

interact with their children regularly and only 4% have no interaction. When asked about the mode of interaction children visit personally in 42% cases, about 38% use telephone, 6% use letters and even email is used by 4% for interaction.
Table 4.2.4 - 2: Living apart from children N Are your son/daughter living apart from your house Yes 642 No 447 How often you interact Regularly 102 Seldom 515 Not at all 25 N 642 Mode of interaction (multiple response) Personal visit 486 Telephone 431 Correspondence 69 Email 45 N 642 4.2.5 Economic status

% 59.0 41.0 15.9 80.2 3.9 100.0 42.4 37.6 6.0 4.0 100.0

Most elderly (55%) are not working. Table 4.2.5- 1, shows that those elderly who are working 38% are engaged in various economic activities including agriculture, service, business and labour. About 24% are self-employed (business), 8% are engaged in agriculture and 3% do casual labour.
Table 4.2.5 - 1: Economic engagement of the Elderly by sex Male Female Total N Row % N Row % N Col % Regularly 27 3.6 3 0.7 30 2.6 Employed

Self-Employed Casual Labourer Not Working Volunteer Work Agriculture Work Total

215 26 406 1 69 744

28.9 3.5 54.6 0.1 9.3 100.0

64 6 308 0 21 402

15.9 1.5 76.6 5.2 100.0

279 32 714 1 90 1146

24.3 2.8 62.3 0.1 7.9 100.0

Questions were asked about the household income, expenditure and the personal income of the elderly. The income expenditure information may not be very reliable and should be used with caution. It is felt that the monetary information are liable to be manipulated due to several reasons such as, lack of book keeping system in most of the households, psychological reasons, and social values it is attached with. Even then it could provide some gross estimate of the economical status of the concerned group. There were some missing cases due to I do not know 29

type of response. For instance only 979 pair-wise cases were recorded as valid for the three variables of Table 4.2.5- 2, when considered mutually. Also the valid size of N varies for different variables. For the calculation of mean and other statistics valid N is found varying for this reason and hence the corresponding valid N is taken to calculate mean and other statistics. For all the three monetary variables some outliers are found and the size of standard deviation is also big relative to their mean. Hence we can relay more on the 5% trimmed mean than the ordinary mean which is highly affected by the extreme values.
Table 4.2.5 - 2: Household Income and expenditure
N % Average Monthly Income /Expenditure Household expenditure less than USD 50 274 24.9 (USD *) 50 99 398 36.2 100-149 223 20.3 150- 200 116 10.6 over 200 88 8.0 Total respondent 1099 100.0 Household income less than USD 50 212 19.6 (USD *) 50 99 329 30.5 100-149 230 21.3 150- 200 135 12.5 over 200 174 16.1 Total respondent 1080 100.0 Income from self employment less than USD 50 551 54.4 (USD *) 50 99 233 23.0 100-149 140 13.8 150- 200 44 4.3 over 200 44 4.3 Total respondent 1012 100.0 Total N 1146 100.0 Average Ratio of the Household Income to the Self Income Head of the Household Age Group Self Spouse Son Other Total 60-64 63.0 31.7 14.3 47.8 59.8 65-69 57.2 40.5 21.4 43.9 51.8 70-74 54.4 52.4 7.2 15.5 46.0 75-79 48.0 29.0 15.7 59.4 39.0 80-84 39.7 13.0 16.8 33.5 31.3 85+ 28.0 7.5 8.7 3.0 16.1 Total 57.0 31.9 14.5 30.3 49.4 Other statistics N Mean Median 5% trimmed Std. Percentiles mean Valid Missing 25 50 75 Household expenditure 1099 47 100.5 79 93.2 78.5 52.6 78.9 131.6 (USD *) Household income (USD *) 1080 66 134.0 99 119.6 123.5 52.6 98.7 157.9 Income from self 1012 134 65.4 42 54.6 77.9 13.2 42.1 92.1 employment (USD *) % of elderly income to 978 168 49.4 44 49.3 36.2 household income (pair-wise)
* (Note 1 USD = NRs 76.00)

30

From Table 4.2.5- 2, we can find that about 25% household have monthly expenditure less than 50 USD. Here, 1 UDS is calculated as NRs. 76.00. The table shows that about 61% household have monthly expenditure below 100 UDS per month. Now considering the median family size of 6 person the perhead monthly average expenditure becomes USD 16.75 and the perhead income become USD 19.9. The income expenditure data shows that there is also some small household saving. The proportion of elderly income to the total income is about 49% which could be considered high showing the significance of the elderly income. As the ratio of the household income to self income was found high in Table 4.2.5 - 2, it was of further interest to look at the ratio by age group and by head of the household type. Results from this analysis given in Table 4.2.5 2, shows that with increasing age of the elderly the ratio are decreasing. Also the ratio is found high when the elderly are themselves head of the household than when they are not the head of the household. When asked if the elderly have fully used the self earned property, Table 4.2.5 3, shows that about 67% conformed about the self use of the property and 14% denied about it. About 19% said that they did not earn any property to use it.
Table 4.2.5 - 3: Utilisation of the earned property Self Earned Property Fully Used N Yes 766 No 166 Not earned any property 214 Source of personal earning (Multiple response, N= 1146) Pension 612 Agriculture 588 From Son/Daughter 354 House rent 282 Business 228 Service 206 Senior citizenship allowance 156 Widow allowance 134 Bank interest 96 Daily wages 89

% 66.8 14.5 18.7 53.4 51.3 30.9 24.6 19.9 18.0 13.6 11.7 8.4 7.8

When asked about the source of their personal earning, in the multiple choice question (Table 4.2.5 3) out of 1146 respondents, 53% mentioned it is pension, 51% agriculture, 31% from remittance sent to them by sons or daughters working abroad and 20% business. It shows that pension and agriculture activities are a major financial source for the elderly.
4.2.6 Health Status

Health is a major concern for the elderly population. Health problems are prevalent among elderly specially in the rural and remote areas due to the lack of proper care, medicines, doctors and consciousness. When asked to make a self-evaluation about their health status (Table 4.2.6 1) about 24% think it is in good status, 64% think it satisfactory and 12% think it poor. Thus majority of elderly consider their health satisfactory. 31

Table 4.2.6 1 : Self Evaluation of the Health Status How you judge your health N Good 277 Satisfactory 737 Poor 132

% 24.2 64.3 11.5

Further, questions were asked about nine different chronic oldage health problems reciting them one by one. The list included problems of heart, high blood pressure, pain in joint, lungs (asthma), kidney, diabetes, stomach (ulcer, gastric), gouts, and Epilepsy. Many health problems have shown some spatial variation in the past. Table 4.2.6 2, shows the percentage distribution of the elderly chronic health problems by development and ecological region. It is found that the problem of stomach is most prevalent (about 28%) followed by high blood pressure (23%) and rheumatic problems (22%). It is seen that heart problem is most critical in the central region (50%) and in terai (41%). Rheumatic problem is most critical in central region (44%) and in hill(41%). Asthma is found critical in the central region (39%) and in hill (48%). High blood pressure is critical in central region (40%) and in terai (51%). Kidney problem is found critical in eastern, central and western region (24%) and in terai (67%). Diabetics is found critical in central region (38%) and in terai (59%). Gastric is most critical in central region (37%) and in terai (45%). Gout is found critical in central region (40%) and in hill (52%). There were 25% elderly who have no health problem. In this category the most healthy elderly are found in the western region (38%) and in terai (58%). One may be further interested to know the intensity of chronic problem by age, sex, spatial variation and ethnicity. Thus the health problem data was analysed by at most one problem, at most two problems, more than two problems and with no problem. The analysis shows that 40% have at most one problem, 23% have at most two and 12% have more than two problems. Even 25% have no problem. By age group there is no much variation in the case of at most one problem but with increasing age the proportion of elderly with more than two problem increases. By sex 9% male have more than two problem compared to 16% female. In mountain elderly have more than double proportion of more than two problem compared to hill or terai. In urban location there are about 29% elderly having no problem compared to those of 23% of rural location. Ethnicity has shown variation at different intensity level of health problem for example, 46% hill ethnic have at most one problem compared to 33% in the occupational caste. In the same time 11% brahman have more than one problem compared to 16% in other caste group and 13% in newar.

32

Table 4.2.6 - 2: Percentage Distribution of Chronic Diseases of Elderly

Health problem by type Chronic Heart Rheumatic Asthma High B.P. Kidney Diabetic Gastric Gouts Epilepsy Other Diseases Development Region Eastern 22.6 17.5 19.1 24.5 23.8 30.8 19.4 26.7 0 21.9 Central 50.0 44.4 39.2 40.4 23.8 38.3 37.3 40 66.7 17.7 Western 16.7 17.5 20.6 23.4 23.8 18 21.6 21.7 0 31.3 Mid-western 3.6 7.8 6.9 6 9.5 8.3 6.9 0 33.3 15.6 Far-western 7.1 12.8 14.2 5.7 19 4.5 14.7 11.7 0 13.5 Ecological Region Mountain 22.6 20.2 12.3 2.6 9.5 0 11 10 33.3 16.7 Hill 36.9 40.9 48 46.8 23.8 41.4 44.2 51.7 33.3 41.7 Terai 40.5 38.9 39.7 50.6 66.7 58.6 44.8 38.3 33.3 41.7 All Total 7.3 22.4 17.8 23.1 1.8 11.6 27.8 5.2 0.3 8.4 N 84 257 204 265 21 133 319 60 3 96 Chronic Diseases by intensity Age group Sex Ecological Region 60-64 65-69 70-74 75-79 80-84 85+ Male Female Mountain Hill Terai 39.7 39.7 39.2 47.6 38.5 34.2 39.2 41.8 41.5 44.5 36.0 At most one 20.9 25.3 29.1 20 21.3 25 22 25.1 17.0 24.3 23.3 At most two 8.2 9.6 11.4 15.9 16.4 21.1 9.4 15.7 22.6 10.4 10.5 More than two 31.3 25.3 20.3 16.6 23.8 19.7 29.3 17.4 18.9 20.8 30.2 No problem 100 100 100 100 100 100 100 100 100.0 100.0 100.0 Total row % 416 229 158 145 122 76 744 106 490 550 Total N By intensity of problem Urban Rural Brahman Chhetry Newar Hill Teri Occupational Other caste Total ethnic ethnic caste N 37.8 41.5 39.7 41.7 40.4 46.2 38.5 33.3 39.3 460 At most one 21.5 24.0 25.7 24.6 21.5 23.1 18.8 22.2 19.6 265 At most two 11.9 11.5 10.3 11.4 12.6 10.3 12.5 11.1 16.1 133 More than two 28.8 23.1 24.3 22.3 25.6 20.5 30.2 33.3 25.0 288 No problem 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Total row % 413.0 733.0 416 211 223 39 192 9 56 1146 Total N * Chronic ailment Index is calculated as

When asked about the regularity of medicine about 50% elderly told yes (Table 4.2.6 3). When further asked about the annual cost of medicine 157 out of the total 1146 (14%) respondent either were not knowing the amount or do not spend any money for treatment (treatment is free in the government health centres). The annual cost of medicine is approximately 63 USD. About 75% elderly told that they self bears the cost of treatment, 35% told that it is done by their son or daughter and 3% by relatives.

33

Table 4.2.6 - 3: Regularity of the medicine and average cost of the treatment Regular Medicine

Yes No Average annual cost of treatment Mean (USD*) Std (USD*) Valid N Who support the cost of treatment Self Son/daughter Relatives Free treatment Other N
* (1 USD = NRs 76.00 considered)

N 574 572 63.1 141 989 856 403 33 23 3 1146

% 50.1 49.9

74.7 35.2 2.9 2.0 0.3 100.0

Allopathic, Aurvedic, homeopathy, and traditional type of medicine are used in the country. To understand the most frequent mode of treatment questions were asked. Table 4.2.6 4, shows that about 87% use allopathic treatment, 9% use aurvedic and 2% use homeopathy. By development and ecology region allopathic and aurvedic treatment is used most frequently in central and in terai.
Table 4.2.6 - 4: Most frequent mode of treatment by development/ecological regions
REGION Eastern Central Western Allopathic Aurvedic Homeopathy Other Total (%) N 20.4 10.9 40.0 6.1 19.5 224 35.2 35.6 32.0 66.7 36.0 413 28.3 25.7 8.0 0.0 26.8 307 ECO Total MidFarTotal Mountain Hill Terai % N western western 8.3 7.9 100.0 8.8 42.4 48.8 100.0 987 6.9 20.8 100.0 6.9 42.6 50.5 100.0 101 12.0 8.0 100.0 8.0 36.0 56.0 100.0 25 24.2 3.0 100.0 30.3 60.6 9.1 100.0 33 8.7 8.9 100.0 9.2 42.8 48.0 100.0 1146 100 102 106 490 550 1146 -

When asked about the total number of days they were ill in the last one-year and the total days they were unable to walk due to illness, Table 4.2.6 5, shows that about 47% told they were not ill for a single day. About 40% were ill for less than one month and the median class falls in this group. About 37% told that they were unable to walk for some days in the last one-year. Among those who were unable to walk most were so for less than a month.

34

Table 4.2.6 - 5: Days ill and unable to walk during the last one-year Disability days Unable to walk Frequency Percent Frequency Percent 0 days 536 46.8 724 63.2 less than 1 month 454 39.6 348 30.4 less than 2 months 68 5.9 29 2.5 less than 3 months 25 2.2 13 1.1 less than 4 months 15 1.3 8 0.7 less than 5 months 5 0.4 2 0.2 more than 5 months 43 3.8 22 1.9 Total 1146 100.0 1146 100.0

When asked about the major type of physical difficulties viz. poor vision, impairing hearing, and walking problem, Table 4.2.6 6, shows that 60% reported about the poor vision, 12% reported hearing problem and 12% reported walking problem. Problem of vision is seen most in the age group 60-65, hearing and walking problems in the 81+ group. By gender male reported to have these problem more than female. When asked about the aids used for their stated problems out of the 689 who have vision problems 512 use aids (74%). Similarly, 21% with hearing problem use aids, and 63% with walking problem use aid.
Table 4.2.6 - 6: Physical difficulties by Age and sex
Poor vision Number % 290 42.1 128 18.6 77 11.2 89 12.9 105 15.2 453 65.7 236 34.3 689 100.0 Impaired Hearing Number % 23 16.7 29 21.0 16 11.6 21 15.2 49 35.5 84 60.9 54 39.1 138 100.0 Walking problem Number % 31 22.6 18 13.1 16 11.7 28 20.4 44 32.1 71 51.8 66 48.2 137 100.0 87 50 137 63 18 1 4 1 51-75 27 2.4 76-100 58 5.1 63.5 36.5 100.0 72.4 20.7 1.1 4.6 1.1 Total 1146 100.0

60-65 66-70 71-75 76-80 81 + Male Female Total Using aids Yes 512 74.3 29 21.0 No 177 25.7 109 79.0 N 689 100.0 138 100.0 If using aids, who supported financially Self 415 81.1 19 65.5 Son/daughter 85 16.6 8 27.6 Relatives 8 1.6 1 3.4 Free of cost 3 0.6 0 0.0 Others 1 0.2 1 3.4 Disease burden Index * N % No burden 0 0.0 1- 25 903 78.8 26 - 50 158 13.8

* Disease burden Index is calculated as, 1. Having chronic ailment = 50, 2. Serious illness in the last one year =12, 3. Poor vision = 15, 4. Hearing problem = 8, 5. Difficulty in walking = 15. Total = 100.

35

When further asked who support for the purchase of these aids Table 4.2.6 7, shows that most provided the money by themselves whereas son or daughter were the second supporters. Those elderly who do not use aids but have problems when asked about the cause for not using any aids the major cause reported for it was due to lack of money.
Table 4.2.6 - 7: Aids for the Vision, hearing and walking problems Vision problems Hearing Problems Walking Problems If using aids, who supported financially N % N % N % Self 415 81.1 19 65.5 63 72.4 Son/daughter 85 16.6 8 27.6 18 20.7 Relatives 8 1.6 1 3.4 1 1.1 Free of cost 3 0.6 0 0.0 4 4.6 Others 1 0.2 1 3.4 1 1.1 512 100.0 29 100.0 87 100.0 N If not using aids, why? Due to old age 29 16.4 22 20.2 13 26.0 Lack of money 80 45.2 41 37.6 19 38.0 No desire 58 32.8 29 26.6 13 26.0 Other 10 5.6 17 15.6 5 10.0 177 100.0 109 100.0 50 100.0 N

Elderly in most of the cases need special diets. Doctors or health advisors may advice them about such diets. When asked if they were advised about any special diet, Table 4.2.6 8, shows that 63% reported no and 37% yes. When asked if such diet is available to such needy persons, 82% told that it is available. Of the 18% (N = 78) who told that it is not available 78% reported the cause as high cost and 18% reported that there was nobody to prepare them such diet.
Table 4.2.6 - 8: Need of Special Diet N Needs special diet?

% 37 63 82 18 78.2 17.9 2.6 1.3 100

Yes No Is such diet available at your house? Yes No If not available, why? Costly No one to prepare Not available locally Other N
4.2.7 Addictions

425 721 347 78 61 14 2 1 78

When asked about addictions like smoking, alcohol, and chewing Table 4.2.7 1, shows that only 18% have regular addiction of smoking, 5% of alcohol and 8% of chewing. It is seen from 36

the high percentage of the 'never' user category of the three addiction that most of the elders falls under the 'never' category. When persons with regular addiction were analysed for their age group and sex it was found that the highest age group of 85+ is found to have highest proportion of smokers (24%). Alcohol is found highest in 80-84 age group (7%) and chewing in 60-64 age group (11%).
Table 4.2.7 - 1: Percentage Distribution of Addictions by Regularity and by Age Group and Sex Smoking Alcohol Chewing Total % Total N Intensity of addiction Regular Sometime Never Regular addiction Age Group 60-64 65-69 70-74 75-79 80-84 85+ Sex Male Female Total (regular addicts)

18.2 6.8 75.0

5.3 15.1 79.6

8.5 10.5 81.1

100.0 100.0 100.0

1146 1146 1146

17.8 16.2 16.5 22.1 18.0 23.7 18.5 17.7 18.2 209

4.1 4.8 6.3 6.2 7.4 6.6 5.8 4.5 5.3 61

10.8 8.7 10.1 3.4 5.7 5.3 11.0 3.7 8.5 97

100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 -

416 229 158 145 122 76 744 402 1146

4.2.8 Analysis by type of benefits 4.2.8.1 Distribution of Elderly by Type of Benefits

The elderly are taking different type of allowances like pension, family pension, gratuity and senior citizenship allowance (SC Allowance). There are elderly who take no allowance and some who take two different allowances, for example pension and SC Allowance. Due to the different nature of the allowance in the amount of payment, in the regularity and in the distributing agency so that the condition and problem may vary by their mode of allowance. In the following space first the sampling distribution is produced to give an estimate of their relative size and then anlysis will be produced by the mode of their allowance. The sample distribution of the type of benefits by age and previous workplace is shown in Table 4.2.8.1 1.

37

Table 4.2.8.1 - 1: Number of Benefit Holders by Age Group and Previous Workplace
Pension Age Group 60-64 65-69 70-74 75-79 80-84 85+ Previous work Civil Military Police School/college Bank Corporation Never in service Total Family pension Gratuity SC Allowance 60 21.5 7.7 3.1 4.6 3.1 32 59 48 73 94 69 8.5 15.7 12.8 19.5 25.1 18.4 No benefits Total

278 117 78 44 35 8 193 97 48 43 132 47 560

49.6 20.9 13.9 7.9 6.3 1.4 34.5 17.3 8.6 7.7 23.6 8.4 100.0

27 18 13 6 13 2 18 36 9 3 4 9 79

34.2 22.8 16.5 7.6 16.5 2.5 22.8 45.6 11.4 3.8 5.1 11.4 100.0

39 14 5 2 3 2 16 0 2 2 24 21 65

43 30 21 30 5 2

32.8 22.9 16.0 22.9 3.8 1.5 100.0

419 238 165 155 150 83 193 97 48 43 132 47 586 1210

24.6 0.0 3.1 3.1 36.9 32.3 100.0 375 100.0 131

In the following space analysis by different allowance setting is produced regarding the amount received, where the allowance was used, duration/interval/regularity of the allowance and problem in receiving the allowance if any.
4.2.8.2 Pension holders

There were 560 (49%) elderly out of the total 1146 respondents who were taking pension. To find out the amount of pension and its role in the life of elderly questions were administered about the beginning and current receivable pension amounts and about the amount received at the time of their retirement. At the time of retirement most are eligible for other benefits like provident fund, medical allowance, and allowance for the reserved leaves. Table 4.2.8.2 1 shows that the starting pension amount is low with mean USD 28.47 per month but it is the current price with higher purchasing power. About 77% have received less than 50 USD per month as the starting pension amount and currently about 60% are receiving more than 50 USD per month. At the time of retirement about 37% received a total of more than 2000 USD and 32% have received less than 50 USD. The mean amount received at the retirement was about 2218 USD. The average pension amount currently they are receiving is USD 64.47

38

Table 4.2.8.2 - 1: Total Pension Amount (USD)

N
Starting pension amount less than 50 More than 50 Total Mean Current pension amount less than 50 More than 50 Total Mean Mode

% 76.6 23.4 100.0

429 131 560 28.47

223 337 560 64.47

39.8 60.2 100.0

Total amount received when retired less than 500 60 500-999 24 1000 1999 36 2000 and more 70 Total 190 Mean 2217.9

31.6 12.6 18.9 36.8 100.0

Elderly use their pension for several purposes. When asked, For what different purposes they use their pension?, Table 4.2.8.22 shows that 511 Out of the 560 pension holders use it for their daily living (91%). Similarly about 52% use it for their treatment and medicine, 47% as pocket money, and 42% in religious work.
Table 4.2.8.2 - 2: Use of Pension (Multiple Answer) Use of pension N % Daily living 511 91.3 Medicine/treatment 289 51.6 Pocket money 262 46.8 Religious work 233 41.6 Son/daughter 137 24.5 Bank deposited 43 7.7 Fee of grand children 14 2.5 Construction of house 4 0.7 Total (N) 560

Most of the amount received at the time of retirement went for the household requirements for daily need including that for the social functions like spending on festivals and at the marriage of the children. Table 4.2.8.2 3, shows that about 54% used the amount for these purpose. About 37% told they spent the money for house construction, 13% for the purchase of land, 11% deposited it in bank, and 10% used it for the schooling of their children. It shows that most elderly used the money for the family and not for their own requirements. 39

Table 4.2.8.2 - 3: Use of the money received at the time of retirement N % Use of money (Multiple response N= 560) Household/social costume 305 54.5 House construction 208 37.1 Land purchase 74 13.2 Bank deposited 61 10.9 Schooling of children 58 10.4 Debt refunded 38 6.8 Medical treatment 35 6.3

Table 4.2.8.2 4, shows that elderly are getting pension regularly almost every month (78%). About 3% told that it is not regular. When asked from when they are receiving their pension, 28% told that they are receiving from 10-15 years, 26% are receiving it from 5-10 years and 19% are receiving it from less than five years.
Table 4.2.8.2 - 4: Duration and Regularity of Pension From When You are Getting Pension? (in Year) less than five Year 5 10 10-15 15-20 20-25 25-30 30-35 35-40 40+ Don't know Regularity of pension Each month Every two months Every three months Every four months more than four months Not regular Total (N)

N 108 146 156 59 40 15 15 11 9 1 442 12 52 19 20 15 560

% 19.3 26.1 27.9 10.5 7.1 2.7 2.7 2.0 1.6 0.2 78.9 2.1 9.3 3.4 0.2 2.7 100.0

Table 4.2.8.2 5, shows that most of them did not face any difficulty while collecting the pension money (95%). These who faced some difficulties were the slowness of the processing (of money release), negligence from the officials and problem while collecting the money at the concern offices at the headquarter.

40

Table 4.2.8.2 - 5: Problem faced during collection of money

Problem faced Yes No Total

4.2.8.3 Family pension

N 28 532 560

% 5.0 95.0 100.0

The family pension is received due to the service of one of the family member who is now dead. Table 4.2.8.3 1, shows that there were about 7% sampled elderly in this category. Source of the family pension is shown in the following table. Highest numbers of the respondent were attached to pension from military (46%) followed by pension from civil service (23%).
Table 4.2.8.3 - 1: Family pension for the service N % Civil 18 22.8 Military 36 45.6 Police 9 11.4 School/collage 3 3.8 Bank 4 5.1 Corporation 9 11.4 Total (N) 79 100.0

Table 4.2.8.3 2, shows that about 88% elderly use the family pension for daily living, 53 % for medicine and treatment, 49% for as pocket money, and 47% for religious work.
Table 4.2.8.3 - 2: Use of the family pension N Use of the family allowance (multiple response) Given to Son/daughter 31 Pocket money 39 Daily living 70 Religious work 37 Medicine/treatment 42 Total N 79

% 39.2 49.4 88.6 46.8 53.2

The average monthly family pension elderly are currently receiving is about 36 USD. Table 4.2.8.3 3, shows that there are 53% elderly who are getting monthly family pension between 24-49 USD.
Table 4.2.8.3 - 3: Current family pension amount (USD) USD per month N % less than 24 21 26.6 24-49 42 53.2 more than 49 16 20.2 Total 79 100.0 Mean 36.35

41

When asked about and problem face by the elderly while taking the family pension, about 76% responded No (Table 4.2.8.3 4). Those who had problem were those whose paper were not supposed adequate by the officials.
Table 4.2.8.3 - 4: Problem faced in receiving family pension Any problem in receiving the family pension N % Yes 19 24.1 No 60 75.9 Total (N) 79 100.0 Problems faced Official problem 7 9.6 Paper were not adequate 13 17.8 Due to handicapped 1 1.4 Total (N) 19

When asked if they are also receiving any other form of support Table 4.2.8.3 5, shows that 32% responded as Yes. The extra support for most of the elderly is the governmental senior citizen allowance, which is very low.
Table 4.2.8.3 5: Other than the family pension Do you also receive any other benefits? N % Yes 25 31.6 No 54 68.4 Total (N) 79 100.0 4.2.8.4 : Gratuity

About 6% elderly among the respondents have received gratuity. Table 4.2.8.4 1, shows that the gratuity is a one-time money receivable at the time of retirement or leave. Of those gratuity receivers when asked if they were also receiving provident fund in this period about 88% responded positively.
Table 4.2.8.4 1 : Gratuity receivers with provident fund N % Did you also receive provident fund? Yes 57 87.7 No 8 12.3 Total (N) 65 100.0

The amount of gratuity elderly received varies highly with the range of income around the upper income bracket. Table 4.2.8.4 2, shows that about 41% received more than 8000 USD in gratuity where as 29% received less than 2000 USD.

42

Table 4.2.8.4 2: Total money received in Gratuity USD N % up to 1999 19 29.2 2000- 3999 9 13.8 4000-5999 6 9.2 6000-7999 4 6.2 more than 8000 27 41.5 Total 65 Type of previous work Mean income (USD) Std Err of Mean Government 1604.6 602.3 Police/military 33.9 31.9 School/collage 39.5 0.0 Bank 6068.3 1539.9 Corporation 4492.5 916.6 Average gratuity 4105.3 710.2

The gratuity amount could vary according to the service place the elderly were working (Table 4.2.8.4 2). So the gratuity data was further analysed by the type of previous workplace. The table below clearly shows that the amount received differ highly by type of previous work. The mean gratuity for police and school/collage is very low about 34 USD each compared to the income from banks which is 6068 USD and corporation 4493 USD. Corporation includes the corporations like Telecommunication, Electricity and NGO/ INGOs. Table 4.2.8.4 3, shows that the amount from gratuity was used mostly for the marriage of children (48%) and house construction (43%). Other use was in debt repayment (26%), medical treatment (23%), land purchase (21%). Even 11 % used it for religious work.
Table 4.2.8.4 3: Use of the money from gratuity Where you used the money N % (Multiple response) Marriage of children 31 47.7 House construction 28 43.1 Debt repaid 17 26.2 Treatment 15 23.1 Land purchased 14 21.5 Religious work 7 10.8 Other 17 26.1

Gratuity holders vary in opinion towards the gratuity system they have benefited and the pension system. Table 4.2.8.4 4, shows that about 77% think that pension system is better. Causes for pro-pension opinion are that pension is a regular earning (88%) and that even their spouse can be benefited after their death. Pro-gratuity opinion is that as the amount is big one can at one install some business or construction houses (40%).

43

Table 4.2.8.4 4: View about Gratuity and Pension Which one you consider better Gratuity Pension Total (N) Why Gratuity/ pension is better Pro pension It is regular/ Gratuity is spent at once It gives social allowance After my death spouse can also get it Total (Pro pension)

15 50 65

23.1 76.9 100.0

44 2 4 50 6 3 2 4 15

88.0 4.0 8.0 100.0 40.0 20.0 13.3 26.6 100.0

Pro gratuity One can install business/construct house Easy for living For old age Other Total (Pro gratuity)
4.2.8.5 : Senior citizen/Widowhood/ Disabled allowance

There were about 33% elderly among the total respondents who were taking one of the three above mentioned benefits all of them are generalised in the following write-up as SC Allowance. However of the total 375 respondents of this category 200 (53%) were only senior citizen allowance recipients, 165 (44%) were widowhood allowance recipients and 10(3%) were disabled allowance recipients.
Table 4.2.8.5 - 1: Duration and regularity of SC Allowance
Duration of SC Allowance less than a year 12 23 34 45 more than 5 year Total (N) Median year How often you receive SS Each month Every two months Every three months Every four months more irregular Total (N) N 24 47 49 52 58 128 375 4 9 105 125 104 32 375 % 6.4 12.5 13.1 13.9 15.5 34.1 100.0

2.4 28.0 33.3 27.7 8.5 100.0

Table 4.2.8.51, shows that the monthly amount of the senior citizenship allowance is NRs. 150(about USD 1.97), widowhood allowance is NRs. 100(about USD1.32). Although the amount 44

is small but it seems that the recipient of these allowance has taken it as a social prestige. The median year for which elderly were getting the allowance is 4 year. The system was adopted by government from the year 1995/56. Although it is a monthly allowance it is distributed in most places every four month (33%), some are getting it every two month (28%) and even some reported of being more irregular (9%). These benefits are distributed from the VDC offices at VDC or ward offices at urban areas and one has to go there to collect it. But if the elderly is weak and unable to walk, the VDC officials distribute the allowance by visiting their house. When asked about the mode of collection of the SC Allowance, Table 4.2.8.5 2, shows that about 42% take it by themselves, 35% told that the officials bring it to their house. When asked about the regularity of SC Allowance 59% said that it is regular. Elderly who said it as irregular its major causes as the delay of the central offices in distributing the allowance amount to the VDC offices (37%) and negligence of VDC officials (36%).
Table 4.2.8.5 - 2: Mode of Collection and Regularity of SC Allowance
How do you collect SC Allowance By self Go with friend Authorization letter Is brought to house by VDC officials Other Regularity of the SC Allowance Regular Irregular Total (N) Why SC Allowance is irregular? Because VDC does not receive it in time Officials give us irregularly Official says it is the irregularity of the central offices Do not know Official do not inform us Other Total (N) N 156 73 17 133 5 220 155 375 57 56 12 10 8 12 155 % 41.6 19.5 4.5 35.5 1.3 58.7 41.3 100.0 36.8 36.1 7.7 6.5 5.2 7.7 100.0

Table 4.2.8.5 3, shows that about 44% were informed about SC Allowance from their neighbour, 23% from their children and 22% from the official notice.
Table 4.2.8.5 - 3: Source of information about SC Allowance
N From whom you were informed about it ? (multiple response) Children Government notice Relative Neighbour Social worker VDC official Other Total (N) 88 81 23 164 58 13 12 375 % 23.5 21.6 6.1 43.7 15.5 3.5 3.2

45

When asked about any problem they faced at the first time of receiving the money, about 94% reported as no problem (Table 4.2.8.5 4). Those who find problem had the problem of citizenship certificate and bureaucratic lingering.
Table 4.2.8.5 4: Problems of receiving at the first time N % Faced problem Yes 23 6.1 No 352 93.9 Total 375 100.0 Problems faced (multiple response) Difficulty in getting citizenship 10 2.7 certificate Photo 2 0.5 Wait in office 4 1.1 Long bureaucracy 6 1.6 Papers were not ready 2 0.5 Total (N) 23

When asked about the view of their children about SC Allowance, Table 4.2.8.5 5, shows that 37% think it is good, 34% are indifferent, 10% think it is a pocket money, 5% think it should be increased.
Table 4.2.8.5 - 5: View of children about SC Allowance N % Views Think good 143 37.3 Indifferent 128 34.1 Helpful pocket money 37 9.9 Should take 24 6.4 Should increased 20 5.3 Un-useable less 5 1.3 Useless because irregular 3 0.8 Other 8 2.1 Total (N) 375 4.2.8.6 : Without benefits

Some elderly are not receiving any benefit. It may be that some of them are ineligible due to their age and others due to various causes. There were 131 such elderly that is about 11% of the enumerated elderly who were not getting any benefits. To such elderly when asked if the government should provide SC Allowance from the start of age 60, Table 4.2.8.6 1, shows that 95% responded positively. To know their view about the criteria an elderly over 60 should be given allowance 43% suggested it should be given to economically weak, 39% to physically unable, 28% to handicapped and 20% to childless.

46

Table 4.2.8.6 1 : View about SC Allowance immediately after 60 year N % Should government provide allowance immediately after 60 year? Yes 124 94.7 No 7 5.3 Type of elderly whom allowance be given Economically weak 56 42.7 Physically unable 51 38.9 Handicapped 37 28.2 Childless 26 19.8 Rejected from family 12 9.2 All 12 9.1 Land-less 5 3.8 Total (N) 131

When asked about the reason for not taking the benefits Table 4.2.8.6 2, shows that 33% informed ignorance, 22% mentioned as less age reported in the certificate, and 14% no citizenship certificate, and 10% said that family members disliked it.
Table 4.2.8.6 2 : Reasons for not taking benefits

Why you are not getting benefits? (Multiple response) Ignorance less age in citizenship certificate absence of citizenship Family member dislike Poor should take Social prestige problem of travelling Total (N)
4.2.9 Opinion of the Elderly

N 29 19 12 9 5 4 3
88

% 33.0 21.6 13.6 10.2 5.7 4.5 3.4 100.0

Elderly were asked to give their opinion on various policy aspects related to elderly such as the senior citizen allowance (SC Allowance), suggestions to the government and taking of the double benefit. Some elderly are taking double benefits such as pension and SC Allowance both. To know their view about the double benefits questions were asked. Table 4.2.9 1, shows that 54% think that this is acceptable while 35% think it is not proper. When further asked about the reasons for liking or disliking of the double benefit the major opinion given in favour of the double benefits were, it is a support from the government, it supplements other benefits like pension. Those who were against the double benefits, think that it will exhaust the governmental fund for the really needy. When asked about their view on the SC Allowance in general, most of then think it is a good system (29%) and think the amount should be increased (58%). Some of them think that it should be given only to the poor and disabled (6%) whereas some think that it should be given from the age of 65 (2%) which could be considered as feeble age. 47

When they were asked to give suggestion to the government/society for the welfare of the elderly 34% suggested to provide free medical treatments by the government, 27% wish oldage home be established in every district, and 22% suggested to create environment where elderly are respected. About 11% wish to have assistance for house construction and 8% wish that arrangement should be made for their gathering place for religious activities like Vajan Mandal, and elderly clubs.
Table 4.2.9 - 1: Opinion of the elderly on various issues. Is taking of the double facility acceptable ? N % Yes 616 53.7 No 402 35.1 Don't Know 128 11.2 If it is proper why?/ If it is not proper why?

It is a support from the government It supplements the pension View about the governmental support Is a good system Should improve if governments status improves Should give sufficient /increase the fund Otherwise elderly will be a burden to the government Should give only to the disables, poor and increase the rate Should provide from the age of 65 Suggestion to the government Respect to the elders by society/government Provide free medical care Provide comfortable residence Make oldage homes in districts and provide financial support Create a separate institution for the welfare of the elderly Provide concession for travelling/ communication Do not know Make arrangement for the religious activities/ construct temples/ arrange space for it Vajan/spiritual activities Monitor the distribution of SC Allowance properly Supervise/ study about the status of elderly What it is doing now is good Increase the possession of elderly in their property/ property by will Increase the SC Allowance Arrange service to the children of poor N

268 274 333 28 657 37 65 28 257 391 120 312 23 42 119 93 47 30 39 40 43 36 1146

23.4 19.5 29.1 2.5 58.4 3.2 5.7 2.4 22.4 34.1 10.5 27.2 2.0 3.7 10.4 8.1 4.1 2.6 3.4 3.5 3.8 3.1

48

Major Findings of the Survey The survey was done from the 1146 elderly respondents distributed over the five
development and three ecological regions. The respondents were male and female of both rural and urban localities that can be categorised by the recipients of different types of benefits like pension, gratuity and senior citizen allowance.
Demographic Feature According to the marital status out of the total male interviewed most were married whereas among female most were widows. The median age for male is 66 whereas that for female is 70. This shows the longevity of female elderly. Elderly are living mostly with the family of size 4 to 7. There is a 0.29 probability of finding a second elderly in the household. Most elderly have 2-4 living children and some have more than five living children. About 37% of the elderly are illiterate. The illiteracy ratio for male is about 13% and that for female is 80%. Of the literate elderly 63% can just read and write. This shows a miserable status of education in the elderly population especially among female. Decision Making About 77% of the elderly make their household decisions by self and in 14% cases it is their son or daughter-in-law who makes the household decisions. Major type of decisions for which elderly are consulted are social decisions like childrens marriage/schooling and about festivals. Most elderly owns their house. When asked about special skills 61% reported to have no special skills. About 17% have administrative/banking skill, and 7% have skill of wool works, knitting, carpet, and sewing. Physical Activities Despite their age, elderly are found engaged in some household chores. Also gender disparity in the regularity of the household chore is found. Regular involvement of elderly is found highest in shopping followed by cleaning and in cooking and childcare at least. By sex, regular involvement of female was found very high in cooking and high in cleaning whereas regular involvement of male was found high in shopping and childcare. By ecological region hill elderly and by development region elderly of the central region were found more active in most of the regular household chores. Household Facilities Concerning the basic household facilities and assets possessed by elderly households 72% get their drinking water from the supply line (piped water), most use LP gas for cooking followed by firewood. About 92% household use electricity for lighting and 86% of the household has toilet facilities. About the type of house 61% are living in brick house, 21% in semi-brick house and 19% in thatched houses. When asked about the facilities of transportation, communication and mass media it is found that 78% have radio and 73% have television, 11% have computer, 5% have car, 25% have motorcycle and 38% have cycle. As radio and TV is available among most of the elderly

49

households these media may be used extensively for the benefit of the elderly by the government, NGO and other grass root organisations.
Living Arrangement About 47% of the elderly are living in the joint family, 28% are living with their married sons, 13% living with their spouse and only about 6% are living alone. Most of those livingalone are female. About the living preferences, highest percentage of elderly prefer to live in joint family followed by living with married son. Only 3% elderly prefer to stay in the oldage homes. Majority of unmarried preferred to stay alone By sex male gave more preference to stay in joint family and female preferred more to stay with their married son. About 59% elderly have their son or daughter living apart from them. Of such elderly 80% informed that they seldom interact with their children. About 16% interact with their children regularly and only 4% have no interaction. When asked about the mode of interaction, children visit personally in 42% cases, and in 38% cases telephone is used. Economic status Most elderly are not working. Those elderly who are working 38% are engaged in various economic activities including agriculture, service, business and labour. About 24% are selfemployed (business), 8% are engaged in agriculture and 3% do casual labour. Questions were asked about the household income, expenditure and the personal income of the elderly. About 25% household have monthly expenditure less than 50 USD. (1 UDS = NRs. 76.00), and 61% household below 100 UDS. Considering the median family size of 6 persons the per-head monthly average expenditure becomes USD 16.75 and the per-head income USD 19.9. The proportion of elderly income to the total income is about 49%, which is relatively high showing the significance of the elderly income. With the increasing age of the elderly the ratio of personal income to the household income is found decreasing. The ratio is found high among the elderly who are the head of the household. About 67% elderly have fully used the self earned property. The major source of the personal earning, beyond pension, is the agricultural activities The second major source is the remittance sent to them by their son or daughter. Health Status Health is a major concern for the elderly population. Majority think their health condition satisfactory. Questions were asked about nine different chronic elderly health problems including problems of heart, high blood pressure, pain in joint, lungs (asthma), kidney, diabetes, stomach (ulcer, gastric), gouts, and Epilepsy. It is found that the problem of stomach is most prevalent (about 28%) followed by high blood pressure (23%) and rheumatic problems (22%). It is further found that most health problems are high in the central region and in terai. By the intensity of the health problems, about 25% elderly have no health problems, 40% have at most one problem, 23% have at most two and 12% have more than two problems.

50

 By age group the number of cases with more than two problems increases with age. By sex
9% male have more than two problems compared to 16% female. In hill elderly have more than double proportion of more than two problems compared terai. In urban location there are about 29% elderly having no problem compared to those of 23% of rural location. Ethnicity has shown variation at different intensity level of health problem for example, 46% hill ethnic have at most one problem compared to 33% in the occupational caste. About 50% elderly are taking medicines regularly. The annual cost of medicine is approximately 63 USD. About 75% elderly bear the cost of medicine by themselves, 35% by their son or daughter and 3% by relatives. Allopathic mode of treatment is most prevalent followed by aurvedic and homeopathy. Inquiry was made about the total number of days they were ill in the last one-year and the total days they were unable to walk due to illness. About 40% were ill for less than one month. About 37% were unable to walk for some days in the last one-year. Majorities of such elderly were unable to walk for less than a month. Poor vision, impaired hearing, and walking problem are the major physical problems of the elderly. Poor vision is the problem faced by about 60%, hearing problem faced by 12% and walking problem faced by 12%. Of the elderly with vision problem 75% use aids whereas 21% and 63% elderly use aids with the problem of hearing and walking respectively. Most of them arranged the money for aids by themselves. where as son or daughter were the second supporters. Those elderly who do not use aids but have problems when asked about the cause for not using any aids the major cause reported for it was due to lack of money. Elderly in most of the cases need special diets. About 37% reported of such dietary needs. Of such needy 82% informed that it was available for them. Those needy whom such diet was not available the major cause was its high cost followed by there was nobody to prepare for them such diet.

Addictions When asked about addictions like smoking, alcohol, and chewing high percentage of elderly have non of such addictions. Only 18% have regular addiction of smoking, 5% of alcohol and 8% of chewing. Addiction of smoking and alcohol is equally found among male and female. Addiction of smoking is found increasing with age. Analysis by type of benefits Pension holders About 77% have received less than 50 USD per month as the starting pension amount and currently about 60% are receiving more than 50 USD per month. At the time of retirement about 37% received a total of more than 2000 USD and 32% have received less than 50 USD. Elderly use their pension mainly for their daily living followed by for their treatment and medicine. Most of the amount received at the time of retirement went for the household requirements for daily need including that for the social functions like spending on festivals and for the marriage of the children. The pension is received regularly every month.

51

 Most reported no difficulty was faced while collecting the pension money. These who faced
difficulties mentioned slowness in the processing of documents, negligence on the part of some officials and delay in disbursement the pension fund by the headquarter.
Family pension

Family pension is received due to the service of one of the family member who is now dead.
Highest numbers of such benefit recipient are related to military followed by civil service. Most elderly use the family pension for daily living, other major use of the benefit is in medicine and treatment, followed by religious work. The average monthly family pension is about 36 USD. There are 53% elderly who are getting monthly family pension between 24-49 USD. Most of the recipients reported no problem while collecting the family pension. Those who had problem were those whose documents were not found adequate by the officials.
Gratuity

Gratuity is a one-time money receivable at the time of retirement or termination of service.

The gratuity recipients were also receiving provident fund. There is a large variation in the gratuity amount received by elderly. It is mainly due the fact that they receive it from different national/international agencies. About 41% received more than 8000 USD in gratuity where as 29% received less than 2000 USD. The mean amount is USD4105. By type of recipients bank gave the highest amount followed by corporation and civil services. School/college and Police/military provided the least amount. Money from the gratuity was used mostly for the marriage of children followed by house construction, in debt repaying, medical treatment, land purchase, and for religious work. About 77% gratuity recipients think that pension system is better than gratuity. Causes for pro-pension opinion is that pension is a regular earning and that even their spouse can be benefited after their death. Those in favour of gratuity think that the amount being big can be used to start some business or for the construction of house.

Widowhood/ Disabled / Senior citizen allowance (SC Allowance) The monthly amount of the senior citizenship allowance is NRs. 150(about USD 1.97), and the widowhood allowance is NRs. 100 (about USD1.32). Although the amount is small but it seems that the recipient of these allowances has taken it as a social prestige. The median year for which elderly were getting the allowance is 4 years. Although it is a monthly allowance it is distributed in most places every four month. These benefits are distributed from the VDC offices at VDC or ward offices at urban areas and one has to go there to collect it. But if the elderly is weak and unable to walk, the VDC person gives the money by visiting their house. When asked about the mode of collection of the SC Allowance, about 42% take it by themselves, 35% informed that the officials bring it to their house. More than half said that it was regular. Those who reported it irregular mentioned the major causes as the delay of the central offices in distributing the allowance amount to the VDC offices and the negligence of VDC officials.

52

 About 44% were informed about SC Allowance from their neighbour, 23% from their
children and 22% from the official notice. When asked about any problem they faced at the first time of receiving the money, almost all reported to have no problem A few reported the problem of citizenship certificate and bureaucratic lingering. When asked about the view of their children about SC Allowance, 37% think it is good, 34% are indifferent, 10% think it is a pocket money, and 5% think it should be increased.
Without benefits

Some elderly were not receiving any benefit. It may be that some of them are ineligible due
to their age and others due to various other causes. To such elderly when asked if the government should provide SC Allowance from the start of age 60, 95% responded positively. To know their view about some special criteria for providing allowance to an elderly over 60 43% suggested it should be given to economically weak, 39% to physically unable, 28% to handicapped and 20% to childless. When asked about the reason for not taking the benefits 33% said ignorance, 22% informed less age reported in the certificate, and 14% no citizenship certificate, and 10% mentioned that family member disliked it.
Opinion of the Elderly Elderly were asked to give their opinion on various policy aspects related to elderly such as the SC Allowance (senior citizen allowance including widowhood allowance and disabled allowance), suggestions to the government and taking of the double benefit. Some elderly are taking double benefits such as pension and SC Allowance both. To know their view about the double benefits questions were asked. About the double benefits 54% think that this was acceptable while 35% think it is not proper. When further asked about the reasons for liking or disliking of the double benefits the majority opinion was in favour of the double benefits, they said that it was a support from the government which supplemented other benefits like pension. Those who were against the double benefits, think that it will exhaust the governmental fund for the really needy. When asked about their view on the SC Allowance in general, most of then think it is a good system and think that the amount should be increased. Some of them think that it should be given only to the poor and disabled whereas some think that it should be given from the age of 65 which could be considered as feeble age. When they were asked to give suggestion to the government/society for the welfare of the elderly, 34% suggested to provide free medical treatment by the government, 27% wish for oldage home in every district, and 22% suggested to create environment where elderly are respected. About 11% wish to have assistance for house construction and 8% wish that arrangement should be made for their gathering place for religious activities like Bhajan Mandal, and elderly clubs.

53

Chapter V: Old Age Homes: A Case Study

5.1 Introduction

An organization that looks after helpless and invalid poor senior citizens by providing them basic necessities is called an old age home. In Nepala country with Hindu traditions, the need for old age homes was not felt until a few years ago. However, the changing global scenario, desire for nuclear families, growing longevity, and poverty and urbanization processes have upset our social order. It has in turn directly affected the senior citizens of this country. On the one hand, poor families have not been able to provide the minimum food requirement and medical treatment to their elderly family members, whereas due to the expensive and busy lifestyle, even rich families in urban areas have not been able to provide proper care for them. In this backdrop, the demand for old age homes has increased in recent years in all regions of the country. Altogether 103 old age homes are currently registered, including those operating in full ownership of His Majesty's Government of Nepal (HMGN) and through other social levels, with the Social Welfare Council (SWC), HMGN. Of them, 48 are situated within Kathmandu and the rest in different districts of the country. The elderly have also found refuge informally in different temples and monasteries. Among such shelters are Rishikesh in Ridi, Swargadwari in Pyuthan, Ram Mandir in Janakpur, as well as temples and monasteries in Indian pilgrimages of Brindaban and Ayodhya. Society looks at the inmates of old age homes from a different perspective. The old age homes are locked in a conflict between the prevalent social and familial realities and traditional cultural values. On the one hand, on account of social and economic changes, old age homes are seen as necessary for the elderly across all levels and on the other hand society has not accorded it recognition. Nevertheless, a woman from Pokhara has donated property worth Rs20 million to a home for elderly women (Kantipur, 22-2-2060). Similarly, Dilshova Shrestha has donated property amounting to Rs5 million to Shova Old Age Management and Social Welfare Trust. Society seems to be becoming positive towards old age homes by accepting the existing realities. In such a situation, the rationale for old age homes is increasing. They have become more and more necessary in society in all development regions. Recognizing this fact, HMGN has been providing grants for 15 old age homes in addition to the government-owned Pashupati Old Age Home every year and has declared one old age home each in four development regions as a model old age home. However, the Far West Region was not covered. Even no study has been done by either governmental or non-governmental organizations to reflect the actual conditions of these old age homes other than theses on the Pashupati Old Age Home, Kathmandu, and Sree Janaki Old Age Home, Janakpur, prepared by sociology students of Tribhuvan University. Thought pieces have appeared occasionally in national daily newspapers and magazines.
5.1.2 HMGN Policies and Programmes

HMGN for the first time presented a policy and program on old age homes in the Ninth Plan. The ongoing Tenth Plan has also put forth a policy for old age home.
5.1.3 Policy related to Old Age Homes in Ninth Plan

54

Provision for recreation, reading room, religious discourse in one old age home in every development region and establishment of senior citizens' club in villages and neighborhood and encouraging the private sector. Policy related to Old Age Homes in Tenth Plan Develop senior citizens' clubs Make appropriate provision for shelter for the senior citizens whether or not they have the feeling of social security in the family by developing and expanding model old age homes being run in the five development regions
5.1.4 Financial Support by Government

HMGN provides grants every year for fifteen old age homes. The names of these homes and the grants provided are given below:
Table 5.14-1: Government's Grant to Oldage Homes
Old Age Homes 1. Vishranti Griha, Dhanduta 2. Ramjanaki Bridhasram, Sunsari 3. Janaki Bridhasram, Dhanusha 4. Padma Bhubaneswari Bridhasram, Sarlahi 5. Matatirtha Bridhasram, Kathmandu 6. Nisahaya Sewa Sadan, Kathmandu 7. Gorkha Bridhasram, Gorkha 8. Devghat Bridhasram, Tanahu 9. Krishnapranami Bridhasram, Tanahu 10. Agrani Ama Bridhasram, Pokhara 11. Pokhara Bridhasram, Kaski 12. Bheri Bridha Asahaya Sewa Kendra. Banke 13. Bridha Sewa Samiti, Kailali 14. Tanahun Sewa Kendra, Tanahu 15. Mahesh Gurukul Sanyas Asram, Deughat
* building construction

Grant Provided by Years (in Rs '000) 1999 100 600 150 300 600 150150 2000 175 200 600+700* 225 300 50 675 -150 225 150 2001 300 200 600+800* 375 400 100 300 850 50 100 50 300 150 2002 300 150 600 200 350 100 850 45 60 150 300 40

HMGN has, in accordance with its policy of encouraging and supporting the old age homes established at collective or individual level, along with providing annual grants for them, declared an old age home each in four development regions as model old age homes. They are: a) Bishranti Mandir, Dhankuta b) Padam Bhuneshwori Briddhashram Sarlahi c) Devghat Old Age Home, Tanahun d) Bheri Old Age Home, Nepalgunj

55

The old age homes have to meet the following criteria to be declared as model homes: a) Must have land for constructing a permanent building and necessary infrastructures, b) Good arrangement of food for inmates, c) Provision for regular health check-up and treatment, d) Provision for recreation, reading room, religious discourse, etc, e) Facilitating the inmates to play the role of motivators in local decision making and social and economic activities, involving them in local courts, by coordinating at local level, f) Carrying out activities that use the knowledge, skills and experience of the inmates, g) Increasing the accommodating capacity from at least 10 inmates, h) Conducting income-generating activities according to the interest and capacity of the inmates, i) Must have open space, attractive garden, clean and healthy environment, along with a building, j) Access to informative descriptive materials, regular publications and information, k) Public support, support of local agencies, provision for tours to religious sites. Similarly, HMGN has, in accordance with the policy and programme of the Tenth Plan, started providing grants for all the five-daycare centers, collectively established in accordance with its policy of promoting daycare centers. The names of these centers and the annual grants received by them are: a) Welfare Association for the Adult, Kathmandu: Rs100,000 b) Thapathali Public Welfare Family, Kathmandu: Rs50,000 c) Children and Women Welfare Centre, Kathmandu: Rs100,000 d) Parents Service House, Kathmandu: Rs50,000 e) Chandrika Development House, Tanahun: Rs50,000
5.2 Methodology and scope of study

A field study of eight old age homes was carried out in four development regions as a part of field study to cover on social security of senior citizens of Nepal. The field study covers three types of old age homes, it is perhaps the first representative study of old age homes. The three types of home are: a) Old age homes operated in full ownership of HMGN, b) Old age homes established on social initiative that receive annual partial lump sum from HMGN, c) Old age homes that do not receive any grants or assistance from either governmental or non-governmental sector. One of the objectives of this study is to assess the available facilities in old age homes, understanding the objective(s) of the old age homes, mode of admittance, location and building, provisions for food, medical and physical care, recreation facility, management of staff, and so on.
5.3 Brief introduction to some old age homes

Although this study had the objective of studying an old age home of each of the three types mentioned above in each of the five development regions, the study had to exclude the Far West Development Region because there was no old age home there at the time of study. An old age 56

home in four development regions belonging to each of the three types was studied subject to their availability.
5.3.1 Old age homes operated in full ownership of HMGN

5.3.1.1 Pashupati Old Age Home, Kathmandu (estd.: 1965):

This is the only old age home in full ownership of HMGN. This old age home has 205 inmates: 124 female and 81 male. HMGN allocates Rs4, 677,000 to this home every year. This old age home, housed in an old and permanent building, provides boarding and lodging and other essential items free of cost for inmates. NGOs and INGOs support this old age home with financial and physical assistance from time to time. For recreation worships and prayers are regularly organized, and 15 TV sets have been provided. A health centre has been set up for providing health services for the inmates. A female auxiliary nurse midwife is working there. At present, 15 staff members are working in this old age home. The old age home has an endowment fund of Rs1, 50,000.
5.3.2 Old age homes established on social initiative that receive annual partial lump sum from HMGN

5.3.2.1 Bishranti Mandir, Dhankuta (estd: 1984):

A total of 20 elderly persons, men and women, have found shelter in this home. HMGN grants Rs300,000 every year to this old age home, established on collective initiative. This home has been declared as a model old age home in the Eastern Development Region. Those wishing to join this old age home have to pay minimum Rs2,501. Boarding, lodging and cloth are made available to the inmates free of cost. For recreation, television, radio, collective prayers and worships, visits and library have been provided. This old age home currently has eight staff members. It has an endowment fund amounting to Rs300,000.
5.3.2.2 Sree Janaki Old Age Home, Dhanusha (estd: 1986):

This old age home has been established exclusively for women on social initiative. Situated in the heart of the famous pilgrim site, Janakpur, this old age home currently provides shelter for 36 elderly persons. HMGN has been providing a grant of Rs600,000 every year. This old age home, which doesnt have a building of its own, is currently constructing a building at a cost of Rs4.3 million with Rs1,500,000 provided by HMGN and with the support of business community. This home currently makes available for inmates boarding and lodging, cloth, along with necessary items, free of cost. Although an annual amount of Rs50,000 has been earmarked for the medical care of the elderly inmates, according to the staff concerned, this amount was not enough. At present a doctor examines sick inmates free of charge. A television has been provided for recreation. There are currently nine staff members. There is no endowment fund.
5.3.2.3 Devghat Old Age Home, Tanahun (estd: 1986):

This old age home was established by the Devghat Development Committee. HMGN has been providing it a grant of Rs850,000 every year. This old age home has also been declared as the 57

model old age home of the Western Development Region. Owing to its location in a pilgrim site, many of its inhabitants are ascetics and hermits. In this old age home, along with boarding, lodging and cloth, necessary items are made available to the inmates free of cost. Primary treatment is provided within the home. If the illness is severe Bharatpur Hospital for treatment. Radio, collective worships and prayers, pilgrimages are provided for recreation. There are seven staff-members and there is no endowment fund, the patients are taken to the Bharatpur Hospital for treatment Radio, collective worships and prayers, pilgrimages are provided for recreation. There are seven staff-members and there is no endowment fund.
5.3.2.4 Bheri Old Age Home, Nepalgunj (estd 1996):

HMGN provides a grant of Rs150,000 every year to this old age home, established on collective initiative. HMGN has declared this old age home as a model old age home in the Mid Western Development Region. It provides boarding, lodging, cloth and other necessities for inmates free of cost. For recreation, it provides for a small library, yearly pilgrimages and prayers and worships. It has four staff members working here and has an endowment fund of Rs300,000.
5.3.3 Old age homes that do not receive any grants or assistance from either governmental or non-governmental sector.

5.3.3.1 Satya Sai Old Age Home, Rupendehi (estd. 1999):

This old age home has been established on the initiative of some Satya Sai Baba disciples. It has not received any support from governmental or non-governmental organizations. The disciples have been raising funds at the local level for running this old age home. Although it has a capacity for accommodating 30 inmates, it has currently only four inmates, male and female. It has five staff members and an endowment fund of Rs200,000.
5.3.3.2 Morang Old Age Home, Morang (estd: 2002):

This old age home was opened on private initiative. It hasnt received any support from any quarters. Owing to lack of funds, this old age home is on the verge of closure. At present it has only two inmates. No staff has been hired due to financial constraints. It doesnt have an endowment fund.
5.3.3.3 Prashanti Old Age Home, Surkhet (estd 1998):

There are two inmates currently staying in this old age home, established on collective initiative. It is spread over an area of nearly 9 ha, leased by the Department of Forest for five years. It hasnt received any support from any governmental or non-governmental organizations for operating this old age home, which is housed in two thatched huts and a wooden building. Initially started with ten inmates, on account of financial constraints, the inmates have either shifted to other old age homes or have been forced to live on begging in villages. The inmates currently staying here are provided with rice and vegetables by the Sai Centre, Surkhet. Unless supported by some individual or organization, this old age home will soon cease to exist.

58

5.4

An over view on old age homes

5.4.1 Types of Inmates

The following types of elderly stay in old age homes: a) Unmarried and childless b) Childless widows or widowers c) Social outcastes d) Those who have worked as cooks and as other servants for others for long periods of time and were admitted in old age homes in old age, and e) Those suffering maltreatment at the hands of their family.
5.4.2 Mode of Admission

Among the studied old age homes, the Bishranti Mandir, Dhankuta, charges a donation of Rs2,501 per person for admission. To be admitted here, one need not be helpless/invalid/dependent and old. However, barring this old age home, in other old age homes, the following conditions have apply: a) It must be certified by the municipality or the VDC that the applicant is helpless/invalid/dependent, orphan and poor. b) The applicant must be over sixty years of age. c) The applicant must not be blind, physically disabled or suffering from any contagious diseases.
5.4.3 Executive Committee

Every old age home, especially those established on collective effort, has formed an executive committee to smoothly run it and to mobilize financial resources to run it. The executive committee consists of social personalities, businesspersons, representatives of District Administration Office, etc.
5.4.4 Financial Resource Mobilization

Most of the old age homes are running with the collective efforts of the executive committee of the concerned old age homes. Only few old age homes are receiving the grants from HMG. The Pashupati Old Age Home is the only old age home run in full ownership of HMG. The financially supported old age homes are not getting grants comparative to the annual expenditure of the old age homes. Therefore, funds are mobilized locally. Even if the old age homes not receiving any grants from HMGN mobilize resources locally, because of lack of a regular source, they cannot provide even basic necessities to their inmates on a regular basis. Unless HMGN or other NGOs grant them funds, such homes may face closure in the near future.
5.4.5 Some Rules and Regulations

The surveyed old age homes have the following mandatory rules: a) The inmates must wash their dishes. b) They, except the helpless/invalid/dependent, must themselves wash their clothes and clean their room. c) They must take the permission of the authorities before going out of the old age home. d) Those visiting temples and other places have to return by 5/6 PM. 59

Those staying out of the old age home for long periods will have their names struck off.
5.4.6 Daily Activities

The daily activities of the studied and other old age homes are alike. The rules are as follows: a) Wake up at 5 AM b) Tea at 8 AM c) Meal at 10 PM d) Snacks at 3 PM e) Dinner at 7/8 PM (5 PM at Pashupati Old Age Home) f) Go to sleep by 9:10 PM
5.4.7 Provision of Food

No studied old age home, except the Pashupati Old Age Home, offers mutton to inmates. At Pashupati Old Age Home, mutton is offered to non-vegetarian inmates twice a month as a nutritious diet. Excluding this, the following are offered to inmates in the operational old age homes: a) Milk tea in the morning b) Plain meal (rice, curry, vegetable, pickle) at 10 AM c) Snacks (tit bits, beaten rice, biscuit, etc) at 2/3 PM d) In some old age homes, roti (home-made wheat bread), vegetable, milk or curry, rice, vegetable e) Curd, fruits, other nutritious diet depending upon the financial state of the old age home f) Meals on festivals according to festival.
5.4.8 Provision of Cloth

In the studied old age homes, bedding, cloth, footwear, etc are made available by the home. In all homes, cloth is provided twice a year depending upon the season. Other social organizations and believers also donate cloth from time to time, but it is not regular. In spite of the rule that bed and quilts have to be changed every two years at the Pashupati Old Age Home, they have not been changed for years. In some old age homes, quilts, anti-mosquito net, bed are in dilapidated condition.
5.4.9 Provisions for Health Check-ups

Among the studied old age homes, Pashupati Old Age Home has made provision for one auxiliary nurse midwife health volunteer. In other old age homes, a doctor has been provided for free check-ups. In addition, local hospitals are also visited. However, there is no proper provision for the treatment of chronic patients and those suffering from rheumatism. The inmates are forced to live with diseases.
5.4.10 Provision for Employment for Inmates

The inmates of the surveyed old age homes were not found to be engaged in income-generating employment. However, Bheri Old Age Home, Nepalgunj, engages its inmates, both male and female, in making sweets cartons. The inmates are remunerated for this on piecework basis. The 60

female inmates of all old age homes reported that they earned income by spinning prayer yarns. A female inmate of Sree Janaki Old Age Home even claimed that she had bought a tilahari (a kind of necklace) and ring with the money earned by spinning prayer yarns.
5.4.11 Provision for the Last Rites of Inmates

All inmates are given the same last rites. If they have any relative nearby, they are informed, and their last rites are performed according to the Hindu religion or according to their wishes.
5.5 Findings:

The strengths and weakness of different of old home is given below: Government-owned Old Age Home It shelters the biggest number of elderly. It receives regular funding from HMGN. It provides diet taken by a middle class family and that is nutritious. It has provision of a health centre and health volunteer. It has provisions for TV, pilgrimages, religious discourses and worships. It offers mutton for non-vegetarians inmates. Aspects Needing Improvement There should be provision for separate rooms and service for invalid and sick inmates. There is seepage of water in this building, which is old and dilapidated; it should be repaired immediately. The inmates are not served warm water; they should be served warm water. The physically able inmates are depressed; they should be given especially opportunity to participate in income generating activities. Special attention should be paid to the cleanliness of the old age home.
5.5.1 Old Age Homes Receiving Grants from HMGN

Strengths There's a feeling of social responsibility among the inmates. There's provision of two meals, lodging and cloth. There's provision of pilgrimages for recreation. Aspects Needing Improvement There should be regular health check-ups of inmates. There should be provision for separate rooms and service for the invalid and sick inmates. As there is no unity among the inmates, there should be discourses promoting unity among them. The staff should treat the inmates in a humane manner. The salaries of the staff are too low; they should be increased. The bedding, quilt, bedcovers, etc of the inmates should be changed regularly.

61

5.5.2

Old Age Homes Not Receiving Grants from Governmental or Non-governmental Organizations

Of the three old age homes belonging to this category that were surveyed, two are on the verge of closure. There are two inmates staying in this old age home and they are not being provided food regularly. Although the Satya Sai Old Age Home, Rupendehi, can accommodate as many as 30 inmates, there are currently only four inmates staying here. The reasons for much lower number of inmates than the actual capacity are, on the one hand, the rigid rules of the old age home and on the other hand lack of publicity of the home.
5.6 Major Problems and Suggested Solutions: Some problem in general as identified from the study with the likely solution to solve there problems are described below.

a) Although there are rules for admitting the elderly in old age homes, admission is guided by the acquaintance with the members of the executive committee and staff members. The rules for admission should be strictly enforced and only those elderly applicants who fulfil the criteria should be admitted. b) The old age homes receiving HMGN grants would collapse if the grant were ceased. Therefore, instead of allocating annual grants, the local government bodies should charge senior citizen security tax on local cinema halls and provide them for old age homes. This would ensure them financial sustainability and also integrate them with society. c) The staff members of old age homes do not treat the inmates properly. This has created disharmony in the relationship between the staff and the inmates. The reason for the ill treatment of the inmates could be lack of training of staff members. So, to improve the relationship between the staff members and the inmates, the staff members should be imparted necessary orientation and training. d) The inmates of old age homes have not been able to receive their social security allowance due to unnecessary bureaucratic paper work and hassles. Arrangements should be made for providing them social security allowance on the recommendation of authorized personnel of the home. e) The number of inmates from regions other than where the old age home is located far outweighs those from the region where it is located. Preference should be given to local inmates. f) The old age homes have not been able to cover the economically ultra poor class, middle and upper classes of society. The elderly belonging to middle and upper social strata do not want to stay in old age homes, despite maltreatment at the hands of their family members, for fear of losing family's prestige. So, there should be provision for paid service for the elderly belonging to upper and upper middle class families and all possible facilities should be provided for such inmates against certain charges so that they do not hesitate to live there. Plays and telefilms showing that such suffering elderly people can find human love and care as well as respect in old age homes should be broadcast. g) The so-called lower castes of Terai such as Chamar, Dusad, Halkhor, Musahar, etc, or those of hills, such as Damai, Sarki, etc, despite their poverty, do not want to stay in old age homes as they suffer humiliation at the hands of upper caste inmates. Special drive should be launched for attracting and admitting them in old age homes and efforts made for integrating them with other inmates of these homes. h) Physically disabled are not admitted in old age homes. This shows that they evade such senior citizens. Therefore, the old age homes receiving HMGN grant should also open their doors to differently able senior citizens and serve them. 62

i) Owing to financial constraint, the elderly inmates cannot be given proper treatment. So, HMGN should make provision for regular weekly check-ups by doctors of local hospitals and make available medicines free of cost on a mandatory basis. j) There is no provision of special service for the disabled and chronically ill inmates. Considering the lack of resources of old age homes, able-bodied inmates of homes should be encouraged to help such inmates and, if possible, they should be remunerated for this. k) Although HMGN agencies have registered a number of old age homes, the authorities do not have any information whether they are in operation or not. Also, there is no provision for inspection of old age homes from the central level. l) Senior citizens having children living are not happy staying in old age homes. Therefore, the homes should play a mediator's role in building a harmonious relationship between such elderly and their family members. Such elderly should be rehabilitated with their families as far as possible. m) Most of the old age homes lack recreation facilities for their inmates. Therefore, provision should be made for recreation, reading room, religious discourse in old age homes and senior citizens' club established in villages and neighbourhood. n) In view of the growing role of the private sector, this sector should be encouraged to play an active role in establishing and promoting old age homes. o) Leprosy patients are not accepted in our society. They are evicted from the family as well as society. They are compelled to live in jungle or cave. Hence, there should be collective efforts to rehabilitate the leprosy elderly patients.

63

Chapter VI: Need for Social Security for the Elderly in Informal Sector

At present social security benefits in one form or other including retirement benefits are made available to the regularly paid employees in the formal sector such as government, private enterprises, and others. There is no provision of such benefits in the informal sector. As a result a large segment of the labour force which is involved in the informal sector have to depend largely on themselves and their families for subsistence in the old age. (Nepal Labour Force Survey, CBS, NLFS, 1988/99). This may be one of the reasons for a high level of labour force participation rate of age group 60+ which is 63.2 percent, 75.1 percent for male and 51.2 percent for female . It will be appropriate to look into some of the facts and figures in order to further clarify the status and issues in this connection. According to the NCFS (1998/99) it is estimated that only 16 percent of labour force are engaged as regular paid employees in various sectors whereas 40.3 percent is engaged in self-employment. The proportion of unpaid family workers is very high at 43.3 percent of the total labour force. This is given in the following table(Table 6-1).
Table 6 - 1: Structure of Employment of Persons Aged 15 Years and Above
(in thousands) Structure Total Male Female Total employed 9,463 4,736 4,727 Paid employees 1,517(16.03) 1,153 (24.34) 365 (7.72) Government 245 212 33 Public enterprise 70 60 10 Private Sector 385 311 75 NGO/INGOs 26 21 5 Others 791 549 243 Self employed 3,819 (40.35) 2,463 (52.00) 1,355 (28.66) Agriculture 3,002 1,868 1,132 Non-agriculture 817 595 223 Unpaid family workers 4,100 (43.32) 1,103 (23.28) 2,997 (63.40) Source: NLFS, 1999. Note: 1. Figure in parentheses indicates percentage. 2. Percentage in terms of total employed persons, total employed males and total employed female.

As regards work force in formal and informal sectors the NLFS does not clearly demarcate formal part and informal part of the workforce in agriculture, and takes into account nonagriculture informal sectors only. It is estimated that altogether 73.3 percent of non-agriculture employment is covered by informal sector. Equally significant is the fact that 67.4 percent of the male and 86.5 percent of the female in non-agriculture employment are engaged in informal sector. As such, if entire agriculture is treated as informal sector economic activity, it is evident that the formal sector work force appears to be as small as 6.4 percent of the total labour force as shown in the following table (Table 6-2).
Table 6-2: Formal and Informal Employment of Persons Aged 15 Years and Above
Sector Agriculture Non-agriculture formal Non-agriculture informal Total 7,203 (76.1) 603 (6.4) 1,657 (17.5) Male 3,176 (67.1) 509 (10.7) 1,052 (22.2) Female 4,027 (85..2) 94 (2.4) 605 (12.8) Source: NLFS, 1999. Note: Figure in the parentheses is percentage of total workforce, of total male and total female.

64

It is evident that works in the informal sector are outside the formal system of social security. They are benefited only to a negligible extent through charity and welfare arrangements. As mentioned above the issues of old age security and health is largely handled within their family itself. There is however a gradual decline in the role of family as an institution in the process of modernization. The need for broad-based social security for elders is, thus, increasing more and more not only for the wage earners but also for the self-employed in general.

65

Chapter VII: Conclusion and Recommendations

The number of elderly population is increasing every year and is projected to double in the period of next two decades. Status and problems faced by them are also growing acute as evidenced in the course of this study from different sources including the field survey. This calls for appropriate measures in order to address the needs of the elderly. Based on these considerations an attempt has been made here to draw conclusions from this study and also make recommendations for further action as given below. 1. Pension constitutes an important element in the present social security programme for the elderly particularly in the government sector. This has gone a long way in helping the government employees to meet their basic needs after retirement from the service. This facility is also made available by a few banks and public corporations for their employees. There is however concern that as financial liability is increasing government is finding it difficult to sustain it, mainly due to the budgetary constraints. (a) In this context it will be appropriate to recall the recommendations of the Public Expenditure Review Commission, 2001, which states that funded pension scheme should be introduced for the new employees. As mentioned in the Budget Speech of 2000-01, His Majesty's Government is moving ahead in this direction. It is expected this will materialize in the near future. (b) Among the pension holders retired teachers have informed during the field survey that they are not receiving the amount of pension regularly in time. Distribution mechanism of pension in the case of teacher is not similar to the arrangement made for civil servants, army personnel and police. It is essential that adequate fund should be released to the District Education Office as required for distribution of pension to all the teachers. A rapid assessment of the current problems in this connection by the concerned government agency will be in order for remedial action. (c) As regards an institutional arrangement for pension the Public Expenditure Review Commission has suggested that the responsibility for operation and management of pension should be entrusted to an autonomous organization. The Citizen's Investment Trust has been suggested as an appropriate entity for this purpose. It will be appropriate to entrust the task of management and operation of the funded pension scheme to the Trust which will be in a position to invest the fund with an assured rate of return that will ultimately lessen the financial burden of the government. (d) It is noteworthy that Citizens Investment Trust has taken initiative to embark on retirement benefit schemes with the objective of broadening the coverage to include beneficiaries in the informal sector as well. Similarly, the pension scheme introduced by the Employees Provident Fund has been beneficial to all the members of the Fund, which comprise of employees both in the public and private sectors. 2 The social assistance programme of the government has its own significance which makes a provision to make available monthly allowances to the elderly persons above 75 years of age and helpless widows above 60 years of age and disabled persons. It has been noticed from the field survey that the programme has been beneficial to a large extent particularly to those who are in dire need of some financial help for their sustenance. There is widespread support for the continuance of the programme. Moreover there is need for enlarging the coverage of this programme as the beneficiaries at present are limited in number and confined to few districts. 66

3 Recently government has initiated a programme of providing a limited amount of medical expenses to the elderly who need help for treatment though this is in an early stage of operation. It will be desirable to pursue this programme at the local level with the community participation. In this context, it should also be emphasized that effort should be made to establish geriatric wards in various regional hospitals specially to cater to the needs of the elderly. Similarly, government should initiate to set up subsidized health facility, both on consultation fees and medicine to the elderly people. Public health facility should be provided to the elderly people via widely scattered health centers such as health posts, health centers and district hospitals. Similarly, provision should also be made for such types of facility in private run hospitals. 4 A number of old age homes has been established in different parts of the country with the initiative of individuals and NGOs. Some of them are receiving grants in aid every year from the government. Only one of these homes located in Kathmandu is fully financed by the government. Case Studies of some of these homes in the course of this study reveal that there is room for improvement and at the same time utilization of their full capacity. At present the number of elderly residing in such homes is very few. Effort should be continued to establish such homes and in all districts to the extent possible to benefit those who are destitute and homeless. It will be desirable to promote community participation and private sector in this area. 5 It has been realised that the current civil code does not provide adequate safeguard to the fundamental rights of the elderly persons in so for as it relates to their ownership of the assets earned by them. There are several cases of sons and daughters claiming their share in the property and leaving the elderly parents even homeless and destitute. Suggestions has been put forth in the course of discussion and also in the field survey that the elderly persons should be given the right to transfer their property as per their "will". Accordingly present civil code needs revision to include such provision.

6 With the enactment of the Local Self Governance Act 1998, the District Development Committee, Municipalities and Village Development Committees have been authorized to carry out programmes for providing social security to the elderly among others. It is essential that these local bodies should take into account the policies and programmes of the government on one side and consider the local needs in order to implement appropriate programmes for benefiting the elderly persons both in the urban and rural areas. 7 Elderly people can be given opportunities to utilize their skills, knowledge and experience in different ways. For example, they can be given opportunities in a number of the local development programmes like working as a member of the VDC, community level user's groups, school managerial committees, mother's group, local level development planning etc. Similarly, the retired teachers may be employed for the non-formal education programmes that are run by the government and NGOs particularly in the rural areas. In this context it will also be desirable to consider a mechanism for the transfer and promotion of traditional indigenous skills of the elderly to the younger generation in difference areas. 8 A spirit of philanthropy and voluntarism should be promoted in order to provide necessary support to the initiatives for undertaking different activities to benefit the elderly particularly at the local level. In this context old age homes and day care centres will constitute a 67

significant programme, which may be launched in all the districts that are still lacking such facilities. 9 It is evident that only a small percentage of elderly population have benefited with the social security programme in the formal sector although question of adequacy and coverage remains. A large part of them is devoid of any facility particularly in the informal sector. An important question is how to reach this segment of elderly population, which is at the lower rung from the economic point of view. The universal scheme of allowance for senior citizens and helpless widows addresses this question to some extent. However much more remains to be done to cater to the needs of the elderly above 60 years in age as a whole. A further detailed study to make an assessment of the status and needs of the elderly in the informal sector may be undertaken for this purpose.

10 It is generally felt that there is need for raising awareness with regard to the problems faced by the elderly segment of the population as a whole. It may be advisable, therefore to incorporate this subject in the social studies in the school level programme. Moreover efforts should be pursued to abridge the intergenerational gap by bringing the together the elderly and the younger generation in different activities at the local level. 11 Different ethnic groups/communities have their own customs and traditions to pay respect to their elders. In some communities special celebrations are performed to respect the elders when they complete 77 years, 84 years and 90 years. This symbolises a unique cultural tradition to honour the elders. Similarly, some communities have their own custom to respect their elders. This tradition of respecting elders is an important cultural heritage which needs to be preserved and further enhanced in the future also.

68

ANNEXES

Annex 1: Annex 2: Annex 3: Annex 4: Annex 6: Annex 7:

Selected Socio-Economic Indicators of Nepal UN Principles for Older Persons International Plan of Action on Ageing, 2002 Findings of a field Research on Elderly Projection of Elderly by 2025 and 2050 (included in hard copy) Map of Nepal: Survey Areas (included in hard copy)

Annex I: Selected Socio-Economic Indicators of Nepal Indicators Value

Population (in million), 2001 Population Density Life Expectancy at Birth (years) 2001 Total Fertility Rate (per women) 2001 Under 5 Mortality Rate Average Annual Population Growth Rate Median age, 2001 Dependency ratio, 60+ population Economically active population (10+ years) Rural Poverty, 2002 Population Below $1 per day Gini coefficient , 1996 Share of income (lowest 10%) Share of income (highest 10%) Adult illiteracy rate (% age 15 and above) 2001 Under nourished people (as % of total population) Population under age 15 (as % of total) 2001 Population aged 60 and above ( as % of total) 2000 Human Development Index (HDI) HDI rank, 2003 GDP, real at 1994/95 (in millions of dollars, 2001) GDP (real), growth rate GDP per capita (USD, 2003) Balance of payments on current account (million USD) Government expenditure (% of GDP) Total Government revenue (% of GDP) Total Tax revenue (% if GDP) Overall deficit of government budget (% of GDP) Total outstanding loan (% of GDP), 1998/99

23.15 157 60.8 4.1 91.2 2.24 20.1 12.0 63.4 44.0 38 36.7 3.2 29.8 53.7 23.0 39.4 6.5 0.480 143 2852 2.4 236 456.6 19 12 78 5.4 64.6

Source: 1.Fifth Asian and Pacific Population Conference: Nepal Country Report , Ministry of Population and Environment, August 2002 2. Population Perspective Plan for Nepal, An Approach Paper, Ministry of Population and Environment December 2002 2. Economic Survey: Nepal, Ministry of Finance, 2003

Annex II: UN Principles For Older Persons

The United Nations Principles for Older Persons were adopted by the UN General Assembley on 16 December 1991. Governments were encouraged to incorporate them into their national programmer whenever possible . Highlight or the principles are as follows: Independence Older persons should : have access to adequate food, water, shelter, clothing and health care through the provision of income, family and community support and self-help; have the opportunity to work or to have access to other income generating opportunities ; be able to participate in determining when and of what pace withdrawal from the labour force takes place; have access to appropriate educational and training programmes; be able to live in environments that are safe and adaptable to personal preferences and changing capacities; be able to reside at home for as long as possible

Participation older persons should: remain integrated in society participate, actively in the formulation and implementation of policies that directly affect their will-being, and share their knowledge and skills with younger generations; be able to seek and develop opportunities for service to the community and to serve as volunteers in positions appropriate to their interests and capabilities; be able to form movements or associations of older persons.

Care older persons should: benefit from family and community care and protection in accordance with each society's system of cultural values; have access to health care to help them to maintain or regain the optimum level of physical, mental and emotional well-being and to prevent or delay the onset of illness; have access to social and legal services to enhance their autonomy, protection and care; be able to utilise appropriate levels of institutional care providing protection, rehabilitation and social and mental stimulation in a humane and secure environment ;

be able to enjoy human rights and fundamental freedoms when residing in any shelter, care or treatment facility, including full respect for their dignity, beliefs, needs and privacy and for the right to make decisions about their health care and the quality of their lives

Self- fulfillment older persons should: be able to use opportunities for the full development of their potential; have access to the educational, cultural spiritual and recreational resources of society.

Dignity older persons should: be able to live in dignity and security and be free of exploitation and physical or mental abuse; be treated fairly regardless of age, gender, racial or ethnic background, disability or other status, and be valued independently of their economic contribution ;

Annex III: International Plan of Action on Ageing, 2002 The International Plan of Action on Ageing, 2002 The international Plan of Action on Ageing was adopted in the Second Qld Assembly on Ageing in Madrid in April 2002. This Plan of Action calls for changes in attitudes, policies and practices at all levels and in all sectors so that the enormous potential of ageing in the twenty-first century may be fulfilled. The aim of the Plan of Action is to ensure that persons everywhere are able to age with security and dignity and to continue to participate in their societies as citizens with full rights. Ths plan is intended to be a practical tool to assist policy makers to focus on the key priorities associated with individual and population ageing. There are a number of central themes running through the International Plan of Action on Ageing 2002 which are mainly as follows: (a) The full realization of all human rights and fundamental freedoms of all older persons; (b) The achievement of secure ageing, which involves reaffirming the goal of eradicating poverty in old age and building on the United Nations Principles for Older Persons; (c) Empowerment of older persons to fully and effectively participate in the economic, political and social lives of their societies, including through income-generating and voluntary work; (d) Provision of opportunities for individual development, self-fulfillment and well-being throughout life as well as in late life, through, for example, access to life-long learning and participation in the community while recognizing that older persons are not one homogenous group; (e) Ensuring the full enjoyment of economic, social and cultural rights, and civil and political rights of persons and the elimination of all forms of violence and discrimination against older persons. (f) Commitment to gender equality among older persons through inter alia, elimination of gender-based discrimination; (g) Recognition of the crucial importance of families, intergenerational interdependence, solidarity and reciprocity for social development; (h) Provision of health care, support and social protection for older persons, including preventive and rehabilitative health care; (i) Facilitating partnership between all levels of government, civil society, the private sector and older persons themselves in translating the International Plan of Action into practical action; (j) Harnessing of scientific research and expertise and realizing the potential of technology to focus on inter alia, the individual, social and health implications of ageing, in particular in developing countries; (k) Recognition of the situation of ageing indigenous persons, their unique circumstances and the need to seek means to give them an effective voice in decisions directly affecting them.

The commendations for action are organized according to three priority directions: Older persons and development; advancing health and well being into old age; and ensuring enabling and supportive environments. The priority directions are specific goal of successful adjustment to an ageing world, in which success is measured in terms of social development, the improvement for older persons in quality of life and in the sustainability of the various systems-formal and informal- that underpin the quality of well-being thoughout the life course.

Annex IV: Findings of a Field Research of NEPAN on Elderly

NEPAN with assistance from Help Age International conducted a field research to know the situations of elderly people in Nepal. The research conducted in 15 districts among Bahun, Chhetri, Dalit (Blacksmith, Ironsmith, Musahar), Limbu, Majhi, Rai, Tamang, Thakali and Tharu. The research derived information from 565 respondents (181 elderly male, 217 elderly female and 167 others). The following are some of its findings: Basic elderly requirements: The needs of the elderly people vary due to caste/ethnic, class and gender backgrounds. However, each elderly considers food, warm clothes, timely health care and family care and affection as their basic requirements. For a very poor and Dalit elderly such as Musahar, availability of wage work regular is very essential. Access to income: The elderly people consider a regular source of income very crucial both for a sense of security and dignity. For them not the amount but regularity matters greatly. Although it might be small for others, but such income gives them "a sense of dignity and security" because they can dispose it on their "own will". It is in this context that the old age allowance provided by the government to the elderly people has been highly appreciate. So is the case of pewa (women's personal belongings). Besides, pension assets (land, gold, silver), etc. are some other forms of income for them. However, the research reveals that a very limited number of elderly (mostly males) have access to such income. Gender division of labour: An analysis of gender division of labour of the elderly male and female reveals that the elderly women on an average work for 16 hours a day, while it is found 5 hours for the elderly men. The conventional division of labour based along the gender lines of gender applies to elderly people equally. The elderly women perform daily household activities including taking care of grandchildren, cattle raising, making food, cleaning utensils and doing prayers. Elderly men often congregate in common place and maintain their public life. Health issues: The major diseases that often affect the elderly people are asthma, joint pain, cough, etc. In addition, the elderly women suffer from uterus problem attributed to the lack of rest, malnutrition, pregnancy complications, etc. The research reveals that instead of modern allopathic medication the elderly people rather prefer domestic or herbal treatment, to which they have easy access. It is found that elderly with spouses are relatively better in coping with sicknesses. Awareness on elderly rights: The elderly people are not much aware about their legal rights. During discussion, most of them could only point to the old age allowance provided by the government. Some elderly people, especially the female ones, however, did not have the citizenship certificate, a prerequisite for legitimate claim on the allowance, so were denied from their rights.

Annex VI: Projection of Elderly by 2025 and 2050( included in the hard copy)

Annex VII: Map of Nepal: Survey area( included in the hard copy)

Economics of Pensions and Social security in Pakistan

1. Introduction The issue of assessing pension and social security schemes has gained great relevance in view of the increasing number of elderly population (defined as those aged 60 years and above) at regional and global levels. Policy makers across the world are striving to adapt their pension and social security system to the reality of their ageing population and tightening of budgets. The population ageing process is a more pronounced issue for the developed regions of the world which have already experienced demographic transition with consequences of rising proportions of elderly population and the related challenges of developing their social security systems. In many developing countries, on the other hand the process of ageing is well on its way due to declining trends in mortality and fertility levels and an increase in the average span of life. The effects of ageing population in these countries are becoming apparent in terms of increasing costs of health-care system, social security and old age benefits, problems of family relationships and changing social attitudes towards older people. 2. Ageing Process in Pakistan Though the proportion of elderly population is relatively low in some of the developing countries like Pakistan that have recently begun their demographic transition, they have substantial numbers in absolute terms because of their large population base. In Pakistan, the ageing of population with regard to its proportion and absolute growth in the volume is emerging as an important issue in terms of its social and economic implications. The proportion of elderly (aged 60 years and above) as enumerated in population censuses has ranged between 5.5 7 percent, their absolute numbers increased from 1.9 million in 1951 to 7.3 million in 1998. In view of the recent decline registered in fertility rate and rising life expectancy, this number is expected increase further. Table 1 shows changes in the size of population and proportion of elderly persons in Pakistan over the census years of 1951-1998.

Table 1 The Changing Population Size and Elderly Persons (aged +60) in Pakistan (million)

Year

Population

Elderly

Percent Elderly

Total 1951 1961 1972 1981 1998 33.740 42.880 65.309 84.254 132.35 2

Male 18.147 22.960 34.833 44.234 68.874

Femal e 15.593 19.920 30.476 40.020 63.478

Total 1.921 2.916 4.572 5.882 7.338

Male 1.030 1.676 2.628 3.398 3.990

Femal e 0.981 1.240 1.944 2.484 3.348

Total 5.694 6.800 7.000 6.981 5.544

Male 5.676 7.300 7.544 7.682 5.794

Femal e 5.714 6.220 6.379 6.207 5.274

Source: Ageing in Pakistan (A Situation analysis 2002), Social Welfare & Special Education, Government of Pakistan

Given the changing demographic scenario in Pakistan, the proportion of elderly population is estimated to increase from about 5-6 percent in 2000 to 15.7 percent in 2050. At the same time, the proportion aged 014 years is expected to decrease from 41.8 percent in 2000 to 21.9 in 2050. Hence, the dependency ratio between working age population and the population aged 65 and over will increase from 5.8 to 14.1 percent between 2000-2050. The United Nations projections estimates (medium variant) equally portray rising percentage of elderly in Pakistan from about 5 percent of the total in 2000 to 16 percent in 2050. As a result, less working age people will have to generate the fiscal resources to support the basic needs of the older people and to provide social security for more retired persons. With increasing numbers of elderly, there are not only implicit challenges and resource management demands at the regional and national level, but also social and economic concerns at the family and individual levels. With increasing trends of urbanization as a consequence of high population growth, and the fast eroding traditional family system in the wake of rapid modernization, the issues concerning the living conditions and quality of life of the elderly are increasingly realized. In this context, the mechanisms of social transfers are becoming a challenge in terms of pension, health care and social protection. However, the challenges of ageing population go beyond social security and health morbidity issues when assessed in terms of social participation, employment opportunities, protection from violence and abuse, physical and mental well-being. As such, ageing has to be a part of the overall development policy and research agenda in Pakistan with a view to link the socio-economic and legal conditions of the older persons and the protection of their social, economic and political rights. Moreover, reviewing and formulating fiscal, economic and social security measures, including access to pensions, insurance, health care and other types of social safety nets in order to reduce poverty and vulnerability of older persons becomes imperative. 3. Objective of the Study In the broad context, the present study aims to identify the modalities of a comprehensive pension schemes, their implications for the national exchequer and relative role of different agencies with particular reference to Pakistan. More specifically the main objectives of the study are:

1.

To examine the changing aging scenario

2.

To review the policies and programs for the elderly including social assistance and security programs

3. 4.

To review the role of the government financing and existing institutional facilities to provide services for elderly To undertake a sample survey to assess the living conditions and the magnitude and adequacy of various forms of assistance available to the elderly

5.

To suggest modalities of a comprehensive pension and social security scheme for the elderly who are in need of such assistance

4.Data Sources and Methodology The data for the study are drawn from both secondary and primary sources. The source of secondary data includes population census, labour force surveys, population projections and other reports and documents available in the public and private sector. To fill in the data gaps, a sample survey of elderly population has to be conducted through a structured questionnaire. The survey will be used to assess the social and economic conditions of the elderly population to identify their specific needs and problems, and to seek their views about the programs of the social assistance. The survey information will also identify specific needs and problems of the elderly people. These include financial, health, housing and related needs of elderly population with diverse socio-economic back ground. The findings of the study provide useful basis for formulating a comprehensive pension and social security programs in Pakistan that would contribute to reduce the economic dependence of deprivation among the elderly population. 5. a) Social and Demographic Characteristics of the Elderly Literacy and Education

The 1998 census provides a good source of information on the socio-economic and demographic characteristics of the elderly population. The results in Table 2 show that only 19 percent of elderly population is literate leaving about 81 percent (5.801 million) aged 60 and above as illiterate. The literacy ratio for the elderly males was 26.8 percent and for females only 8.7 percent. b) Economically Active Population

The labour force participation rates for the elderly population is estimated as 30.9 percent in the 1998 census. The age-wise participation rates show that persons aged 60-64 have the highest work participation (34.3%) and lowest among 75 years and above (24.9%). Table 2 Selected Socio-economic Characteristics of Elderly Population 1998

Literate

Labour Force Participation

Age Group 60-64 65-69 70-74 75+ Total

Literate Both 21.1 Sexes 20.6 17.0 15.6 19.0 30.7 Male 29.9 24.3 22.5 27.5 9.9 Fe9.5 e mal 7.9 7.5 8.9

Labour Force Participation Both 34.3 Sexes 32.6 29.6 24.9 30.9 62.4 Male 58.0 52.3 44.5 55.5 1.6 Fe1.7 e mal 1.4 1.2 1.6

Source: 1998 Population Census of Pakistan Analysis of data from Table 2 suggests that elderly population have a low literacy status especially among females. As for work participation, 55.5 percent of males are in the labour force, i.e. either working or looking for work and helping their families as unpaid workers. Compared with this, female work participation is reported as low as 1.7 percent. The census data on employment status of the elderly indicates that majority of them 79.4 percent were self-employed, 12.6 percent were private employees, 2.3 percent as government employees, 3.5 percent were unpaid family helpers and 1.3 percent were employers (Hashmi, 2003). c) Household Structure

The average household size, according to 1998 census is 6.7 persons. About 55 percent households were living as extended families and 43 percent as nuclear households. About 93.4 percent of households had males as household head and 6.6 percent were headed by females. About 83 percent of households were headed by persons below 60 years of age and only 17 percent had household heads aged 60 years and above (Population Census 1998). d) Health Concerns

According to 1998 census estimates, there were 3.29 million disabled persons in the country. Of these, 0.57 million were elderly which comes to about 8 percent of total elderly population. The disability was higher among males than females 64 VS 36 percent, respectively. The highest proportion of elderly disabled were in the age group of 75 years and above with the highest proportion being crippled (37.0%) or blind (12.0%). The increasing size of elderly population means an additional demand for health and medical facilities. In the absence of social security, the need for special wards in hospitals for health care needs of the elderly are required. For other studies focussing on major issues of ageing and the changes in living arrangements of and family support to the elderly have been conducted in Pakistan (Afzal, 1994 and 1999; Ali and Kiani, 2003; Hashmi, 2003; Irfan 2003). These studies, based on data collected in some selected urban and rural areas, give further evidence of the living conditions and socio-economic characteristics of the elderly. The major findings indicate that the average size of household continues to be high, slightly more in rural than in urban areas. Most of the household with an elderly persons represented extended families. As expected, the educational level of elderly and their spouse was in general lower in rural than urban areas. More than half of the elderly had some chronic diseases, and many had high blood pressure, diabetes,

arthritis and asthma. The inadequacies of health facilities, especially for the poor elderly, had a direct bearing on their working life and productivity. The studies suggest that the risks and duration of illness would certainly be reduced if the elderly have easy access to medical facilities and provision of medicines. About a third of elderly were earning or contributing money to the family either from their savings or earnings. Moreover, the higher proportion of widowed among the elderly females than males make them financially and emotionally dependent on their children. Special and practical measures are required to make them self reliant by involving them in some income generating activities. 6. Implications of Ageing

The social and economic transformations in an ageing population, involves an increased dependency of the elderly on the family and other working members. The large proportion of the elderly live on pension, social security benefits and savings. As women are less involved in the labour force during their active life, their pension benefits tend to be correspondingly lower than mens, and majority of women in Pakistan depend on their husbands pension at a reduced rate or have to depend on their close kins or children in the absence of social security schemes. The situation of the pensioners in Pakistan indicates limited coverage of their needs due to substantial reduction in income. In this situation, social security provides a ray of hope and comfort to the families as the benefits are available in the form of unemployment insurance, medical coverage and post-retirement social security coverage. Such schemes are rare and limited due to resource deficiency and constraints. The social security in Pakistan is a neglected area in literature with limited information available.

7. Social Safety Nets in Pakistan

The social safety nets are the safety valves which protect vulnerable groups against unforeseen circumstances. These measures provide a ray of hope to people having limited options for earnings. The need for such a system became more urgent with rapidly changing economic conditions of the poor. The social costs of adjustment in many countries have increased the vulnerabilities of the socially disadvantageous groups. Many countries adopted a range of compensatory measures to ease its impact, particularly the privatization and fiscal management of the poor and vulnerable. These social adjustment packages or social safety nets comprise policy and programme instruments such as general food subsidies, targeted income transfers, public works, school feeding, social funds (emergency funds, compensatory funds, employment funds and social investment funds), and small scale credit. Social safety nets are also used to deal with crisis situations (economic shocks, drought, epidemics) and periods: aftermath of war or conflict, are times when a particular section of the society needs assistance.

The aim of well-designed safety net is to protect individuals, household and communities from acute deprivation or inadvertent declines in income. These include formal and informal arrangements (public and private safety nets) to help lessen the adverse outcomes in welfare. Safety nets are now recognized as a key component of a poverty reduction strategy (World bank 1990, Graham 1994, Van de Walle and Nead 1995). These programmes usually

cover three types of vulnerable groups: the chronically poor, transient poor and the temporary poor. In Pakistan, social safety net programme in the form of food-based safety net was implemented in the 1950s. In the 1960s, rural works program was implemented through food aid received from United States under PL 480 programme for construction of rural infrastructure and creation of lean-season employment in the rural areas. In the past three years, revival of economic growth policy has been supported by direct social safety net measures consisting of four major elements (i) income generation and employment creation programmes through integrated small public works programe in both urban and rural areas, (ii) food support programme, (iii) revamping of social protection system, primarily through Zakat system, and (iv) expansion of micro credit facilities at the doorstep of the poor. There are feeling among workers community that the new tide of globalization is anti-workers because of more reliance on cheap labor without any voice. The businesses are adopting cost cutting techniques to compete in the international market on the cost of labour. The long term contractual jobs are dissipating and marginal jobs have started emerging from these developments. Many developing countries adopted those measures which were attractive for investors but detrimental for workers. The establishment of export-processing zones is one of the examples of such measures. In these zones investors were given number of incentives in the form of tax holidays but no legal protection was given to the workers to protect their basic rights. These developments have changed the employment relations at workplace and put working class at disadvantageous position. Majority of the workers is losing long-term contracts and the continuous stream of income associated with that. The economic insecurity of the working class increased due to such measured. In the welfare states of Europe and America, the working class is protected through social security schemes where benefits are available to the majority of the population in the form of unemployment insurance, medical coverage and post retirement social security coverage. The coverage is however limited in the developing world due to resource allocation. In these countries, only the most vulnerable groups of the society are protected through social security schemes. Although the social security benefits of these schemes are limited and amount of income is meager, it preserves the self-respect and economic independence of the poor. It is imperative to highlight the distinction between Social Security and Social Safety Nets, (SSN) currently in vogue. According to Ginneken (1999), the social security is characterized by the following basic elements

a) b) c) d)

People derive their rights from social security; Social security is provided through public or collective arrangements; Social security aims at protection; hence, promotion of employment and social services is not its major role. Social security is not concerned exclusively with cash benefits but also with basic needs (medical care, education, housing and nutrition).

The aim envisaged of the social safety nets (SSN) was to prevent individuals from remaining or falling below a specified minimum standard of living. SSN aim at:

a) b)

enabling the poor to better manage the risk; preventing poor from distress sale of their assets;

c) d)

a system of income insurance to help people through short term stress and calamities; and taking care of the long term disability.

Unlike Social Security, the SSN are not the right based instruments and designed to achieve certain goals of poverty eradication or providing some services to down trodden people. Social Safety Nets can be formal as well as informal, do not carry any legal guarantee and can be provided both by public and private sector.

In Pakistan, majority of people live in the rural areas and employed in the informal sector. The SSN are however, heavily favorable to the workers in the urban formal sector. This urban bias is the hurdle in the fair distribution of services and benefits to poor. There is no umbrella institution to coordinate the social services provided by government and non-government institutions to cater the needs of poor. A number of institutions providing for SSN include Government, Non Government Organizations, Mosques, Financial Institutions, and Private Transfers. Such programs which attack poverty directly were not adopted by various regimes rather, planners opted strategies to alleviate poverty through rural development and employment creation. A number of rural development programs such as - Village Aid in 1950, Rural Works Program, People Works Programs and other similar ventures, Construction of Dams and irrigation networks, and provision of social services education and health etc, and land reforms were mostly designed for development purposes but acted as SSN for rural poor. Other programs such as Zakat distribution, food rationing and provision of subsidies to consumers and small producers were also efforts of different regimes to provide social protection to deserving groups. The main reason for these limited programs and their coverage was the strong social system in the country where families, tribes and communities take care of the poor members of the society.

As far as social security schemes are concerned, a number of social security schemes are currently in place in Pakistan which provides some protection to workers. Unfortunately these schemes are never debated publicly to remove the bottlenecks and problems associated with them. The following section provides the overview of these schemes.

II. Social Security

The Social Security Phenomena is not the new one rather it originated more than two hundred years ago with the inception of industrial revolution in Europe. First social security insurance scheme was initiated in Germany in 1881. In United States and Canada it dates back to 1930s. In Less Developed countries, the social security program saw its beginning in the second half of the twentieth century [Hasan, 2000]. Social Security Schemes are now followed all over the world. To discuss different social security schemes, it is important to highlight the definition of Social Security for better understanding of the Schemes. There is no universally accepted definition of social security; however different world bodies have developed their own definitions. According to the United Nations Article 25 of the Universal Declaration of Human Rights adopted on the 10th of December, 1948, Everyone has the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control [Euzeby, 1987]. The number of workers covered in the list is limited and many groups who deserve to be included in the list do not qualify. International Labor Organization (ILO) adopted various recommendations and conventions

on social security which are approved by many countries. According to ILO: Social Security refers to the protection which society provides for its members, through a series of public measures against the economic and social distress that otherwise would be caused by the stoppage or substantial reduction of earnings resulting from sickness, maternity, employment injury, unemployment, invalidity, old age and death, the provision of medical care, and the provision of subsidies for families with children [ILO, 1992]. With this definition, the contingencies recognized under social security include Old age Invalidity Death Unemployment Sickness Maternity Occupational diseases Work related injuries

In nutshell, the objective of social security is the protection of health and the achievement of freedom from wants by means of benefits covering the principal common contingencies which deprive workers and their dependants of the means of subsistence. Once these schemes are in place, the society assures that nobody is left out to the economic vulnerability. The social cover is available to most of the vulnerable groups in the developed world where states are executing their responsibilities amicably. The problems are in less developed countries where protection is provided to the limited number of workers. The situation in south Asia is even worse. Not only the number of workers covered under these schemes is small, the benefits are also very limited. The information provided in Table shows India and Pakistan are the only countries of the region which covers all sorts of contingencies. The percentage of workers covered under these schemes is relatively higher than other countries of the region. Bangladesh is the only country which provides no coverage for old age, invalidity, and survivorship. . Table : Social Security Contingencies covered and types of schemes in South Asia

Scheme

Bangladesh
EL EL EL -

India
EL/SI EL/SI EL/SI SI NPF/SI NPF/SI NPF/SI 7,500,000

Nepal
EL EL EL NPF NPF NPF 300,000

Pakistan
EL/SI EL/SI EL/SI SI SI SI SI 1040,000

Sri-Lanka
EL EL NPF NPF NPF 30,00,000

Employment Injury Sickness Maternity Medical care Old age Invalidity Survivorship Beneficiaries

Source: Employees Old Age Benefit Institution, 1997-98. (EL = Employers Liability, SI = Social Insurance, NPF = National Provident Fund) Note: Dependants are entitled to medical care under the social insurance schemes.

III. Social Security Legislation in Pakistan

A number of social security schemes exist in Pakistan to provided benefits in kind and cash to workers under different laws. Pakistan inherited many of these laws from British India. The laws that cover these schemes are as follows: The Workmens Compensation Act, 1923. The Sindh Maternity Benefit Act, 1929. The Bombay Maternity Benefit, Act 1929. The Punjab Maternity Benefit Act, 1943. The West Pakistan Maternity Benefit Ordinance, 1958. The Provincial Employees Social Security Ordinance, 1965. The West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968. Workers Share in Companies Profits, 1968. Workers Welfare Fund, 1969. Workers Children Education Scheme., 1972. The Employees Old-Age Benefits Act, 1976

The Workmens Compensation Act, 1923 This law was introduced during the British Rule and it was very important milestone in the history of social security in the sub-continent. Pakistan adopted this Act in 1947 with the name, Workmens Compensation Act. The demand for such a law in the sub-continent was there long ago till its induction in 1923. The law has gone through many revisions since its inception however, the main principles of the Act or its important features were not changed. This law applies to establishments employing 10 or more workers and covers workers with monthly wages Rupees 3,000 or less. The law provides coverage to public and private sector employees. The government departments covered under this law includes railway, post office, telephone and telegraph. The law provides protection to the workers engaged on contractual basis and the employer bears the financial responsibility of the protection. The following contingencies are covered under this act. Partial invalidity due to employment injury Occupational disease Total invalidity Death

The compensation in case of partial invalidity is settled by the nature of invalidity and the rates specified in the law. The benefits (under the law) are provided to the workers in case of death, invalidity, or partial invalidity as a result of work injury or occupational disease. In case of death and full invalidity, a sum of Rupees 100,000 is paid to the affected families. The scheme does not provide any medical care in case of work injury, invalidity or occupational disease. Moreover, the payment of compensation is not automatic and in many cases through prolonged litigation. The law does not apply on establishments that are covered under the Social Security Ordinance, 1965. The employers get their workmen insured under this scheme with the State Life Insurance Corporation and the Postal Life Insurance. Pre-independence Maternity Laws

The maternity laws are beneficial and important due to the poverty and low standard of living in the country. The three maternity laws mentioned earlier were applicable in certain areas only. Under these laws, employer provide the full wage coverage to female workers six weeks before and after confinement plus a small payment for delivery charges. According to these laws a woman employee could not be removed from employment during maternity leave. The law however does not provide any pre or post natal medical care to woman employees. The West Pakistan Maternity Benefit Ordinance, 1958 The law enacted after independence was a major initiative on the part of government to provide social security to expecting mothers. This law included all the provision applicable in the province of Punjab and Sindh. This law extended the coverage to other two provinces but there was no change in the benefits provided under other maternity laws. The law covers all industrial and commercial establishments. This law does not cover the employees of the establishments that are covered under the Provincial Employees Social Security Ordinance, 1965. In this law, the financial liability stays with the employers and not with the government. The law provides full wage coverage to an entitled woman employee with maternity leave under this law for a period of six weeks before delivery and six weeks after confinement. The rest of the provisions are same as the services of women employee cannot be terminated during the period of maternity leave, if she is served with termination notice six months before her date of confinement without sufficient justification. Women employees are not permitted to engage in gainful employment during the period of maternity leave. The Provincial Employees Social Security Scheme, 1965 ( PESS) The PESS was applied to industrial and commercial establishments employing 10 or more employees. The coverage was provided to the employees of these establishments drawing monthly wages up to Rs. 3,000. The scheme was introduced in March 1967 and reorganized on a provincial basis in Sindh, Punjab and NWFP in July 1970. A Provincial Social Security Institution was established headed by a Commissioner with a Board of Trustees including the representatives of employers, workers, and Government. The contingencies covered under the scheme included: Sickness Maternity Work Injury Invalidity and Death (in case of work injury and occupational disease) Iddat Benefits (full wages with leave for a specified period)
[1]

There is no qualifying condition to draw benefits under the provision of injury and iddat.1

After the

promulgation of this law on any establishment, it comes out of the purview of the Workmens Compensation Act, 1923 and the West Pakistan Maternity Benefit Ordinance, 1958. In the beginning, the scheme was financed through monthly contribution of employers and employee. The employee was paying 2 percent of his wage while employer was contributing 4 percent of the employees wage. Sweeping changes were introduced in 1972 under the Bhutto government where not only the employer was made responsible for the whole contribution but the rate of contribution was also raised to 7 percent of the wage of an employee. The scheme covers the contingencies such as sickness, work injury, invalidity or death. The provision of services and benefits are provided with out litigation. Under the scheme, the dependents of secured

1[1]

Iddat benefit given to Muslim woman worker on the death of her husband.

workers are entitled to medical care.2

[2]

The information on number of covered workers under PSSS in different

provinces is scanty therefore a comprehensive picture does not emerge from the information given. The data in Table shows that the scheme covers about a million workers in the whole country employed in 41498 establishments. This means that a very insignificant proportion of wage employees are registered in these schemes.

Table-3: Provinces Sindh Punjab NWFP Balochistan Total

Coverage of Social Security Institutions and Facilities 1999/2000 Industrial/commercial units 12700 26299 2301 194 41498 Registered workers 198000 524000 234015 7234 963249 Dispensaries 37 127 17 4 185 Hospitals 4 8 2 N.A 14

Source: Ministry of Labour

The available information on medical facilities and health services show that the expenditure per covered employee on health services is a paltry sum as compared to the disproportionately huge per capita sums on the administrative expenditures (see Table ).

Table :Per Capita Administrative and Coverage Expenditure Year Expenditure on Covered Person Per Capita Administrative Expenditure

Punjab Sindh NWFP Balochistan Punjab Sindh NWFP Balochistan 1996-97 917.59 1246 1203 1740 51096 73803 52231 55453 1997-98 1130.59 1374 1256 1899 65302 80080 60780 65095 1998-99 1407.05 1463 1400 2339 64934 81866 61848 66569 Source: Report of the Task Force on Labour Welfare Levies. Finance Division, Government of Pakistan, Islamabad. May 2000.

2[2]

For providing medical care to the secured workers, the provincial social security institutions have a network

of hospitals, dispensaries, treatment centers, qualified doctors, para-medical staff, ambulances etc. The workers and their dependants are entitled to medical care from the first day of the employment. The dependants include wife or wives of needy invalid husband, dependant parent and any unmarried children up to 21 years. A secured worker for sickness benefits has to produce a certificate from employer that he has been working for 90 days. In case of death a secured worker should be receiving injury benefits, sickness benefits or medical care for death grant. A secured woman, in case of, maternity is entitled if contribution in respect of her, were payable not less than 180 days for cash benefits.

This clearly shows that the institutions of Social Security are benefiting other than those for whom these institutions were intended to establish. Justice (Rtd) Mohammad Afzal Lone who was heading the Task Force on Labour Welfare Levies also noted this anomaly and stated in his report that The figures disclose a marked difference between the administrative expenditure and the expenditure incurred on the Secured Persons which reflects that the objection of employers is not entirely ill-conceived and rather it tends to support their allegation that these Institutions are existing more for the benefit of the administrative set up rather than to promote the well being of the labour force who are the real beneficiaries identified by the legislature.

Excise Duty on Minerals (Labour Welfare) Scheme, 1967

This was a Federal enactment with Provincial implementation. The act was intended for the welfare of mine workers. This act was an extension of service provided under the Mines Act 1923 which guarantee the provision of health, safety and maintenance of shelter for workers to rest and a canteen. This new Act provided the benefits of health and education to the workers family and plots in housing schemes to the workers. Under the Act of 1967, a tax was collected on all minerals at the rates not less than Rs.1/- and not more than Rs. 5/- per ton. The information on receipts and administrative expenditure during 1996-99 for different provinces reported in the Table shows a higher percentage of receipts going to administrative purposes.

Table-7:

Receipts of Excise Duty on Minerals by Provinces Rs. In Million

Year 1996-97 1997-98 1998-99 Exp as % of Receipts Punjab 9.31 7.63 13.41 -

Total Receipts Sindh 17.00 NWFP 3.76 4.70 4.79 Balochistan 6.25 4.13 3.76 Punjab 4.40 4.06 4.07 30.3%

Administrative Expenditure Sindh NWFP 0.37 0.38 4.20 8.8% Balochistan 2.49 2.80 2.64 70.2%

Source: Report of the Task Force

A large number of people benefited from the enactment of this law. The information obtained on the beneficiaries of this act for the year 1998-99 shows that 1670 students were enrolled in different educational institutions, 48566 patients were provided treatment, 356 students received scholarships and 180 workers received plots in different housing schemes in Punjab.3[3] There are however allegations of misuse and non-transparency in the disbursement of these benefits.

The West Pakistan Industrial and Commercial (standing orders) Ordinance 1968 The purpose of the West Pakistan Industrial and Commercial Ordinance 1968 was to provide the gratuity and provident fund schemes to workers in establishments employing 50 or more persons. Under this ordinance, the Gratuity benefits were provided (by the employers) to the workers who either are retiring from the service or their services are terminated by the employer (other than misconduct). The gratuity was paid at the rate of 30

3[3]

The information on these benefits for other provinces is not available.

days wage for every year completed in the employment. In case of some contributory fund in the establishment, the employer was not liable to pay any gratuity. Workers Share in Companies Profit, 1968 This law was enacted in response to unrest among workers due to decline in real wages and deteriorating living conditions. Under the Companies Profits (Workers Participation) Act, 1968 workers were allowed a share in the profit of the company. The employees of the companies and industrial units satisfying certain conditions were covered by this Act. It included those establishments which: Employ 50 or more workers. Have the paid-up capital of Rs. 2 million or more and Have fixed assets worth Rs. 4 million or more.

In the beginning, the share of the workers in the company profit was set at 2.5 percent but in 1975, it was raised to 4.0 which is applicable now. The scheme covers workers drawing wages up to 3000 per month. A worker can receive a maximum amount up to Rs 3000 in a year as his share in the profit of his establishment under this scheme. For distribution of the profits, the workers are divided into the following three categories i.e. those drawing monthly wages up to Rs. 1800, between Rs. 1801 and Rs.2200, and those receiving wages between Rs. 2201 and 3000 per month. The maximum benefit was given to first category of workers who, under the scheme, receive four units of Rs 10 while second and third categories of workers get two and one units of Rs. 10 as their share in the profit. The surplus amount is transferred to Workers Welfare Fund. Compulsory Group Insurance Scheme 1968

This scheme made it mandatory for employers of the industrial and commercial establishments to insure all permanent employees against natural death, disability and injury arising out of contingencies not covered by the Workman Compensation Act, 1923, or the Employees Social Security Ordinance, 1965. The scheme does not cover non-permanent workers as well as permanent employees of establishment with less than 20 workers. In the changing employment environment, companies avoid hiring working on permanent basis therefore a vast majority is working as non-permanent employees and most of the establishments employ less than 20 workers. Due to the heavy cost of insurance premium set by insurance companies, many employers do not insure their workers to avoid this cost. Therefore the scheme does not cover a vast majority of workers. Moreover, the social security institutions and WWF also provide these benefits. The scheme therefore is left with very little scope to benefit workers and perhaps very little validity in its current form.

Workers Welfare Fund (WWF), 1969 In 1969, the federal government established Workers Welfare Fund (WWF), through an Ordinance with a grant of Rs. 100 million. The main purpose of the fund was to provide housing facilities to workers. The Workers Welfare Fund Ordinance was promulgated in order to provide regular source of income for this fund by levying a welfare tax, at the rate of 2 percent, on establishments, which produce, adapt or manufacture goods with the aid of any form of energy transmitted mechanically and earn more than Rs 100,000 annually. The fund is managed by the Provincial Welfare Boards and every year allocates money for the following purposes: Development of colonies, plots and construction of houses/ flats for the workers;

Construction of schools, dispensaries, polytechnic, community centers, play grounds, children parks, mosque, and hostels for working women; Scholarships for workers children. Establishment of kidney centers for workers; Rs. 15,000 each to 1,500 workers as marriage grant for their daughters; Distribution of 40,000 bicycles free of cost to low paid workers; and Distribution of free sewing machines to 10,000 families of workers;

The federal government collects the fund through CBR and maintains the records of the funds. In year 2000 CBR collected an income of Rs. 1 billion under WWF. The surplus income of the Workers Participation Fund was also transferred to WWF which amounted to Rs. 2 billion in the same year. To-date the Fund has an accumulated amount of close to Rs. 11 billion and Rs 6 billion in investment. The funds are lying with the Ministry of Finance but most of the operations are undertaken by the Provincial Workers Welfare Board (WWBs). The collection and actual release of the WWF for the 1994-99 period presented in Table reflects that release to WWF has been only 21% of the actual collection. Table-5: Actual Collection, and Releases of WWF Rs. Million Year 1994-95 1995-96 1996-97 1997-98 1998-99 Actual collections 957.8 1234.9 1531.9 1711.3 2458.5 Budgeted Release 650 650 650 650 650 Actual Release 650 650 423

Source: Ministry of Labour It is worth mentioning that federal government is not paying any benefits or interest on these huge sums which are lying with it for long time. The official running provincial Boards have little control over monitoring of the WWF. In 30 years of its operation, the fund has developed 35175 plots (1758/year), built 11577 houses (578 units/years), and constructed 4749 flats (237 units/years). Surprisingly in thirty years these schemes has benefited only 44860 or 1.1 percent of workers employed in the manufacturing and mining sectors. The expenditure on welfare related activities are not adequate as total welfare expenditure made by WWF from 1971 to 1999 in different provinces and at head-quarter are only Rs 7 billion. The distribution of these expenditure reported in Table shows that so far Sindh Board as successfully spent slightly above 2 billion rupees on welfare of the labour.

Table

: Distribution of WWF Expenditure by Provinces Rs. Million

WW Board Punjab WW Board Sind WW Board NWFP WW Board Balochistan

1612.6 2089.9 1285.6 1469.1

Head quarter

682.0

Source: Report of the Task Force on Labour Welfare Levies. Finance Division, Government of Pakistan, May 2000.

There are reports of widespread misuse, misappropriation and inefficient allocation of WWF. These reports are substantiated by investigation and subsequent prosecution of the Board officials in two provinces by NAB. Similar inquiries are underway against board members in other provinces as well. Workers Children Education Scheme, 1972 This scheme was conceived to provide free education to workers children through by levying a tax at the rate of 100 rupees per annum per worker on industrial establishment. Launched in 1972, this scheme covers the workers of the establishments employing 10 or more workers and drawing wages up to 3,000 per month. The establishment membership is permanent and cannot be cancelled even if its employment falls below ten workers or wage of the workers exceeds Rs. 3000. Under this scheme, two children of the entitled workers receive free education up to any level. The finances for the scheme come from the contribution of employers at the rate of Rs. 100 per worker per annum. In the past, Provincial Excise and Taxation Department was responsible of registration of establishments and workers but now it is managed by the PSSIs or any department nominated by the provincial government. The benefits are however distributed through the Provincial Labor Departments. Under the scheme Rs. 9 million were collected in the Province of Punjab and NWFP and benefited only 12000 students in these provinces. Information regarding other provinces is not available.

The Employees Old Age Benefit Institution, 1976 This scheme was launched in July 1976 to provide coverage to workers employed by industrial and commercial enterprises with ten or more employees, irrespective of their status. The maximum wage limit for payment of contribution and payment of benefits is Rs. 3000 per month. Under this scheme, the employees are entitled to the following benefits. Old age pension Invalidity pension (for causes other than work injury or occupational disease) Survivors pension Old age grant (to those not entitled to pension)

The EOBI scheme operates on a partially funded basis. Half of the finances for the scheme come from the contribution of employers (5 % of their payroll) and the other half comes from the government contribution by matching the contribution of employers. According to the existing rules, employers pay mandatory contributions of 5 percent of the first Rs. 3,000 of employees wages per month. The government had been contributing an equivalent matching grant until July 1995, but it withdrew thereafter. Old age pensions accrue at the rate of 2% of the final year wage (maximum of Rs. 3,000 p.m.), subject to a minimum of Rs. 630 per month (recently increased to Rs. 700 per month). Survivors pension (for spouses on death after retirement and on death in service after 36 months of coverage), invalidity pension, and old-age grants are also provided. These benefits are portable only between covered establishments. Normally workers become eligible to draw pension after reaching the age of 60 years (55 years for females) provided they complete 15 years as covered service.

The EOBI has blended its schemes with Islamic teaching and included old parents and young widows in its benefit entitlement.4
[4]

In EOBI rules, the parents of (both or the surviving one) an unmarried employee get the

pension from EOBI for five years in case of his (employees) death. In case of widow, if any employee dies after 36 month of EOBIs insurable employment then his widow gets survivors pension for the entire life. The benefits to the children of deceased employee continue even after the remarriage of his widow. The intension behind this benefit is the attitude of stepfather who may not provide the proper attentions to the needs of these children due to his personal reason. The data on registered beneficiary shown in Figure indicate a rising trend. The other indicators also show a remarkable progress of the EOBI. The total number of employers registered with EOBI was only 5447 in 1977 which increased to 43560 in 2000. There were only 8807 employees insured with EOBI in 1977 which crossed 1.5 million mark in 2000. An increase of almost 11 percent is recorded in the number of beneficiaries in just two years which is also commendable (see Table ). An estimated 10 million wage employees in the country, the EOBI coverage is not adequate which covers only a minor fraction in Pakistan. Table : Registered Employers, Insured Persons and Beneficiaries under EOBI

Registration
End 1999 End 2000

Employers
42632 43560 2.2

Insured Persons
1465087 1572014 7.3

Beneficiaries
164203 181547 10.6

Growth (%)

The EOBI was operating under the supervision of the State Life Insurance of Pakistan in the beginning. It started operating independently in 1981 with the appointment of the full time chairman of the institution. The EOBI takes care of all the functions including collection of contribution, investment of funds in profitable schemes and the payment of pensions to the pensioner. Besides income form employers contribution and governments matching grant, EOBI invests its fund in profitable projects and generate additional income for the welfare of workers. The information on its income and expenditures reported in table shows that the EOBI is also an inefficient institution and spends a big amount on administrative purposes. The administrative expenditures were recorded as high as 4.9% of total receipts and 20.7% of total contributions in 2000. These expenditures were much higher than the institutions in other countries. There is feeling that the amount collected by EOBI as compared to its coverage is not adequate and if the present contribution rate continues in future, it will be difficult to meet the cost of increasing pension expenditure. The estimates show that the Fund will start decreasing in next 20 years and get depleted in just a few more years under unchanging conditions. Table Year End 1997 Contribution (Million) 1276 Administrative Expenses (Million) 187.36 Admin Exp. As % of Total Income 3.9

4[4]

In teachings of Islam, old parents are the responsibility of their earning children.

End 1998 End 1999 End 2000

1337 1421 1534

211.53 228.16 318

3.8 3.5 4.9

Source: Ministry of Labour.

Sharp growth in EOBIs administrative expenditures is quite noticeable. These high establishment costs would exert downward pressure on the benefit level. The system is managed poorly and reportedly suffers from several governance and administrative problems. Procedures for monitoring of payments, filing of returns and assessment, and resolution of disputes are cumbersome. There are numerous complaints from employers and employees against harassment at the hands of the EOBI staff. Records are alleged to be poorly maintained and there is a lot of evasion and manipulation. Recent scam of Rs. 1 Billion is still shrouded in the mystery.

Finally pensions are not indexed and erode quickly due to inflation. The government has at times attempted to partially relieve this hardship by raising the minimum pension. But this relief has not been enough and even the minimum pensions have lost one thirds of their value in last 15 years. The erosion produces un-predictable effect on pensions, creates inequities between different age cohorts, and diminishes the effectiveness of the plan.