Elderly Poverty in Estonia
Estonia, the northernmost Baltic state, is a member of the European Union that was formerly part of the Soviet Union. After gaining independence in 1991, newly recognized Estonia embarked on a series of political and economic reforms. Many now commonly refer to the country as one of the Baltic Tigers alongside Latvia and Lithuania because of its rapid economic growth. Today, Estonia is a developed, high-income country that consistently ranks high in quality of life, education and digitalization. Despite this, Estonia still lacks in other indicators of development. The road to capitalism increased inequalities in Estonian society that did not exist under communism. Citizens lost some of the safety nets they previously had. Elderly poverty in Estonia remains a significant issue that demographic trends and a fragile pension system exacerbate.

The Estonian Pension System

As of December 2020, 41.4% of Estonians over the age of 65 are at risk of poverty, which is one of the highest rates across the European Union. This percentage has significantly increased since 2011 when it stood at 13.1%. When the Estonian government modernized the economy and pension system after independence in 1991, young people benefitted more because they had more time to collect into their pensions. Those approaching old age or already receiving pensions suffered, evident in the high elderly poverty rate today. When people reach retirement age in Estonia, they receive a pension based on the time they spent contributing to the labor force. In addition to this, Estonians can opt into two other pension pillars, one based on their income and one based on voluntary contributions.

  1. State Pension. The first pillar of the pension system is mandatory for all Estonians. It aims to guarantee a standard of living above the absolute poverty line. Social taxes that the government collected fund this pillar. Citizens receive a pension based on the number of years worked.
  2. Wage-based Pension. Estonians can participate in this pillar by contributing 2% of their salary to a pension fund. This pillar used to be mandatory but is voluntary as of 2021.
  3. Supplementary Funded Pension. This pillar, which insurance companies and banks managed, allows people to make extra payments into their pensions.

With the aging population, the number of pensioners is quickly rising, putting pressure on pension sizes. The Estonian population is aging and the number of working-age people is decreasing. The social tax revenue that funds pensions is likely to decline. The media has criticized the reforms that made the second pension pillar voluntary for their potential to destabilize the economy and increase poverty among the elderly.

Gender and Elderly Poverty

Elderly women are especially vulnerable to poverty in Estonia. According to the OECD, 42.8% of women over 65 in Estonia live in relative poverty, compared with 21.4% of their male counterparts. Women also have a much higher life expectancy than men in Estonia. They are living on average 8.4 years longer than men.

This could mean that women often end up widowed and lose their husband’s source of income. This only compounds the financial problems elderly women may already face because of low pensions. 

Looking to the Future

Despite this, the Estonian government has made efforts to combat elderly poverty. Recent reforms adjusted the retirement age to increase every year with the life expectancy. A higher retirement age means people work longer, contributing more to pension funds that Estonia will need in the future. The Estonian government wants to ensure that the pension gap between men and women does not grow. To do that, it is calling for measures to reduce the gender pay gap. The measures include increasing the Labor Inspectorate’s supervision of wages and promoting gender equality curricula in schools.

The government has not yet analyzed the effects of this plan as it extends into 2023. On a supranational level, the European Union proposed legislation in early 2021 that would require companies to report on pay disparities between males and females. The wage gap has dropped from 22.5% in 2013 to 19.7% in 2020 and projects to drop another percentage point by 2023.

To address elderly poverty in Estonia, various organizations are working on regional, national and European levels. The European Anti-Poverty Network has a commitment to eradicating poverty across Europe and placing the fight against poverty and social exclusion at the top of the EU agenda. It has partnered with the Estonian Association of Pensioners (EPUL), which cooperates with government agencies to protect the rights of the elderly.

Its primary activities are advocacy-focused and help bring elderly voices to the forefront of Estonian politics through public events, lectures and lobbying meetings. In 2018, EPUL signed an agreement that formed elderly councils in the Tallinn city government to involve the elderly in decision-making. The organization also gives free legal aid to the elderly and provided 817 hours of free legal help in 2018.

Though the effect of the COVID-19 pandemic on elderly poverty in Estonia is not certain. However, trends in the years leading up to 2020 are favorable. The relative poverty rate is slowly decreasing, as is the gender pay gap that affects old-age pensions. With NGO work and strong national policies, Estonia is on its way to alleviating and eradicating poverty among its most vulnerable population, the elderly.

– Emma Tkacz
Photo: Unsplash

Elderly Poverty Rate in Romania
The elderly poverty rate in Romania is a challenge to not only the elderly population but also the country itself. Romania’s poverty rates for retired individuals and elders over the age of 65 have increased drastically from an already high level.

The Issue

Romania’s elderly at-risk poverty rate reached a record high of 25.1% in the year 2020, whereas it was previously 14.4% in 2012. Additionally, 24.5% of elderly women in Romania are under the poverty line with a pension, comparable to the record high of 25.7% in 2016 and a record low of 22.1% in 2010. Comparably, males with pensions reached a record high of 18% in 2020 and a record low of 7.9% in 2012.

These statistics present an evident truth; as the years pass in Romania, the elderly poverty rate is quickly rising. This leads poor elders to search for work to make enough money to survive, which they often do not have the qualifications for. In the end, impoverished elders rely on pension payments, which some do not even qualify for, while others struggle to survive below the poverty line.

Romania’s Health Care System

Romania has a dual health care system. Similar to countries such as Australia, it has both a private and a public health care system. However, its system differs from others when it comes to the government’s involvement. Romania’s government spends an average of 4% of the country’s GDP on health care, which is one of the lowest rates in the EU. The government does not fund private healthcare, thus leading those in poverty towards government-funded health care, which has proven to be inadequate. Furthermore, those who do pay for private health care do not always get a better deal. Since the government is uninvolved financially, private hospitals can overcharge patients exorbitant amounts for as little as a consultation.

Also, since the year 2007, about 15,700 Romanian medical experts from both private and government-funded institutions left the country to pursue a better salary in other European countries. With a sub-par salary for Romania’s government-paid doctors (some specialists receive as little as $350 a month), Romanian doctors often resort to bribery, in which they charge patients additional fees for even the simplest consultations.

In terms of the elderly poverty rate in Romania, it is clear that either of the two options for health care in Romania can be costly, and their physical health frequently undergoes neglect. As of 2020, only 23.4% of Romanians over the age of 65 would rate their health conditions as “good” or “very good,” while the EU average is almost double this, at 41.1%. Additionally, 66.7% of these people reported issues with walking, and 51.9% with vision problems, which they cannot treatments for. In comparison, only about 40% of adults over the age of 65 in the United States have a disability.

The Pension Problem

Romania’s pension system is likely to face challenges due to the country’s aging population. Romania is facing a demographic challenge, with a population decline of approximately 25% from 21.4 million in 2008 to approximately 15 million in 2050. Though Romania will most likely face additional challenges as a result of the projected population drop, one major issue could be pensions.

Furthermore, the proportion of elderly people in Romania could reach 29.9% by 2050, subsequently leading to a strain on the pension system. With an aging population, more people will require pensions, putting the government in a dilemma about whether to pay the full amount necessary. As proven with the health care system that the Romanian government provided, the corrupt country will not be eager to allocate so much money to pensions.

Having said that, Romania does have a solid pension system in place, which is based on citizens’ contribution to the economy over a minimum contribution period of 15 years. However, a growing elderly population could cause the country’s pension system to crash according to projections, potentially impacting the elderly poverty rate in Romania.

Lastly, another issue with the Romanian pension system is the fraud that seems to consistently reappear throughout the years. One of the greatest scandals occurred in 2009, in which Romania reported $7.15 million in pension fraud. Resolving an issue like this would require stronger pension security and a potential re-evaluation of the pension granting system.

People Against Poverty

People Against Poverty is an NGO that works in six countries, including Romania, to reduce poverty levels. It has been working to reduce poverty in Romania since 2003 and has hosted a variety of projects, including an Agricultural Project which provides resources for people in Romania who live in rural communities. NGOs like People Against Poverty are extremely important when considering poverty reduction in entire countries, and the implementation of its programs can help in solving Romania’s elderly poverty issue.

Elderly poverty in Romania has been an increasing problem within the past decade, and will likely continue to be one into the future. It remains in the hands of the Romanian government to solve this problem before the elderly population reaches a peak. However, hope exists that the population will regulate itself, or that the economy will open more jobs for impoverished elders. With the help of NGOs like People Against Poverty and the growing economy in Romania, there is certainly hope that the elderly poverty rate will decline over the upcoming years.

– Andra Fofuca
Photo: Unsplash

Baked Goods Against Poverty 
There are more than 15 million senior citizens over the age of 65 who are at or below the poverty line. They often struggle to pay their health and mortgage bills, and they frequently have a lack of access to transportation or have experienced job loss. Not to mention, older women are more prone to experience poverty than men because of wage discrimination and their roles as caregivers. Luckily, in some parts of the world such as Austria and India, organizations are using baked goods to fight poverty. Here is some information about some of these organizations and what they do.

Eat My Cake

Saloua Sahl, a French graphic designer, started Eat My Cake in Pondicherry, India to provide local women employment and space to build confidence. Sahl moved to Pondicherry to volunteer at a special needs school when she first decided she wanted to give back. The local women in this town experience poverty and toxic male masculinity. When Sahl came up with her idea for the bakery, she knew that the local women grew up in the kitchen, so pastries were not an issue for them to learn how to make. Sahl recounted a situation of abuse when a worker did not show one day because her husband bashed a coconut on her head. Stories such as these are what inspire Eat My Cake to keep going because it gives women the opportunity to garner incomes.

Sahl said, “We don’t have the solution. … The fact that you can have an income, send your children to school … this is the start of the solution.” With the use of personal funds and donations, Eat My Cake opened in December 2016.

Vollpension BakAdemy

Vollpension BakAdemy is using baked goods to fight poverty, specifically elderly poverty in Austria. It does this by employing seniors to host baking courses so they can provide for themselves and rise out of poverty. Since October 2020, Vollpension BakAdemy has provided more than 100 online courses headed by elderly teachers to more than 500 students. Starting on October 15, 2021, the program began offering international courses. For these courses, seniors receive a care package including schedules and hardware before they begin.

The Reason These Organizations Are Important

In Austria alone, poverty affects approximately 226,000 seniors while 542,000 are single seniors. Furthermore, every third person over 65 lives alone.

According to Vollpension, “The [U.N.] increasingly observes poverty and interdependencies in particular in older women in richer countries, as well, due to outdated pension systems, missing credit periods, etc. This is the reason why old-age poverty is becoming an increasingly bigger problem in OECD [Organization for Economic Co-operation and Development] countries.”

The idea to use baked goods to fight poverty not only helps people living in under-resourced communities such as Pondicherry, India, find jobs but also restores their self-confidence. Additionally, through using their love for cooking and sharing their secret recipes, many impoverished people in Austria and around the world are lifting themselves out of poverty.

– Dayana Garcia
Photo: Flickr

Elderly Poverty in BoliviaBolivia is one of the most impoverished countries in South America with about 37% of the population living in poverty in 2019. More than 63% of elderly people in Bolivia live in poverty and Bolivia’s elderly population is growing rapidly. This elderly poverty in Bolivia involves circumstances such as food insecurity, limited livelihood possibilities, abandonment by family members moving to urban areas and discriminatory policies.

Developing a Solution

Despite being one of the most impoverished countries, Bolivia ranks above many Eastern European countries in terms of the well-being of senior citizens. The global population of the elderly is growing and it is expected to reach two billion by 2050. Out of these two billion people, 80% will live in low to middle-income countries with few people receiving income support.

Latin American countries are addressing the issue of elderly poverty by raising pension schemes in addition to their strong traditions of international healthcare. Pension schemes act as future investments. These investments take the economic burden of looking after older family members off of younger generations. These investments also allow the elderly more independence, and in turn, increases spending power and the ability to save. Bolivia introduced its universal pension, Renta Dignidad, in 2008. Households eligible for Renta Dignidad have seen a 14% lower poverty rate compared to ineligible households.

The Success of Renta Dignidad

Since the introduction of the non-contributory old-age pension Renta Dignidad, Bolivia has closed coverage gaps and achieved universal coverage. Renta Dignidad only costs about 1% of Bolivia’s GDP and is financed by “taxes on oil and gas production” as well as dividends from state-owned companies. Renta Dignidad has been very successful. Beyond the 14% reduction in poverty across eligible households, the pensions scheme has increased household income and consumption rates.

Child labor is more than 50% less prevalent in households receiving these pension benefits. Because many households no longer require children to work to contribute to household income, many children can now go to school. As such, the Bolivian school enrolment rate is almost 100%. In addition to reduced child labor, households receiving pension have 8% higher school enrollment rates than households without. Renta Dignidad reaches 91% of the population older than 60, and in 2013, had a monthly benefit of 250 bolivianos or $35. Renta Dignidad is the first, and currently, the only, universal pension program in Latin America.

Benefiting Rural Areas

Rural areas experience much more extreme poverty than urban areas. More than 80% of the rural population is unable to meet their basic needs. Additionally, the proportion of undocumented older people is much higher in rural areas. In order to administer Renta Dignidad, the military and national banking system is assisting the Ministry of Economy and Public Finance to deliver benefits. The involvement of the military is crucial in ensuring that remote rural areas reach high coverage rates. Military mobile units utilize mobile satellite dishes that allow beneficiaries to collect their pensions anywhere in the country.

The registration campaign conducted by the program also allows people living in rural areas more access to obtaining personal identification documents. The increased number of people with personal identification documents combined with the increased local demand for goods and services in rural areas due to pensions have helped formalize the rural economy and reduce elderly poverty.

Overall, Renta Dignidad is improving elderly poverty in Bolivia, ensuring that the oldest and most vulnerable population is taken care of.

Jacqueline Zembek
Photo: Flickr

Combatting Elderly Poverty in EthiopiaThough Ethiopia has one of the fastest-growing economies in its region, it remains one of the poorest nations in the world with a per capita annual income of $883 in 2019. Along with many inevitable health and wellness concerns that come with old age, a rising concern for seniors is deepening poverty.

Elderly poverty in Ethiopia poses a major threat to the well-being of older people, leaving them particularly vulnerable to economic insecurity in countries without social protection systems that offer high coverage and adequate benefits. However, important developments have been made in Ethiopia to support the aging population and combat elderly poverty.

Gender Dynamics within Elderly Poverty

Gender inequality manifests in elderly poverty, with older women being at much greater risk to experience poor living conditions than older men. The U.N. outlines multiple factors that contribute to this phenomenon, arguing “women’s lower labor force participation, the large number of women who are self-employed, and the fact that women often have shorter and interrupted careers due to childbearing and rearing” contribute to older women being particularly vulnerable to poverty.

Pension coverage is also often significantly lower for women because there is a gender-pension gap. The gender pension gap refers to several factors that contribute to fewer women receiving pensions than men. This is indirectly impacted by gender discrimination built into the pension system itself, “including the disproportionate exclusion of women from being automatically enrolled into a pension scheme.” In comparison to the 287,666 men who received civil servant pensions in Ethiopia in 2018, only 31,222 women received the same pension.

Policy Progress

In 2018, only 15% of Ethiopia’s older population received any kind of social protection. As stated by HelpAge, “Older persons have virtually no access to either formal or informal savings and loans opportunities. Unless supported by civil society, poor older Ethiopians are unable to engage in regular saving activities.” Given the large coverage gap in social protection for the elderly, many argue that the nation should explore a dedicated social pension to combat elderly poverty in Ethiopia.

Despite its flaws, Ethiopia has made notable progress in the world of social protection interventions in the last few years. Two World Bank-funded projects have been instrumental in laying the groundwork to support seniors: the Ethiopian Rural Productive Safety Net Program, which launched in 2005, and the Urban Productive Safety Net Program (UPSNP), which launched in 2016.

The Ethiopian Rural Productive Safety Net Program is designed to support the Government of Ethiopia in improving its rural safety net systems. There is a specific focus on nutrition and food security, flood and drought risk management, and rural infrastructure and service delivery. Expanding the safety net in rural Ethiopia is central to supporting the lives of the thousands of seniors who live outside a city center and need social programs and systems to maintain a liveable quality of life. The UPSNP is designed with similar features but targeted towards poor households in urban centers.

Moving Forward

HelpAge outlines a few key recommendations to improve elderly poverty in Ethiopia, including increased advocacy from citizens toward local government and more awareness around the issue itself. Moreover, the organization argues an increased focus on older women is necessary, especially widows, in social protection interventions.

There is a long road to dismantling elderly poverty in Ethiopia, but the creation of necessary systems to support the aging population has proven to be a viable start. Knowledge, advocacy and cooperation with the government to address systemic issues within pension plans can definitely move the needle forward to alleviate poverty within the elderly community.

– Alysha Mohamed
Photo: Flickr

Elderly Poverty in GermanyFrom 2006 to 2016, elderly poverty in Germany (people older than 55 years old) increased from 4.5 to 5.6 million people. According to the German Institute for Economic Research (DIW), the percentage of people who face poverty while receiving retirement money could increase from 16.8% to 21.6% by 2039. In other words, one in five German pensioners could face impoverished conditions by 2039. Germany intends to combat elderly poverty with a basic pension plan.

Elderly Poverty in Germany

People who receive “less than 60%” of their average working salary from their retirement funds are currently considered at risk of facing poverty. This equals a monthly retirement income of less than €905 or $997. The percentage of people depending on other financial government assistance may also rise from 9% to 12% by 2039. These people would have monthly retirement incomes of no more than €777.

3 Main Pension Systems

A German pensioner can choose from three main pension systems. The German pension apparatus consists of a “pay-as-you-go system,” which is combined with other supplemental plans. The supplemental pension plans intend to provide funds in addition to the state pension that pensioners already receive.

  1. State Pension. This pension plans awards about 70% of net income to people older than 65 who have been working in Germany for at least five years. Enrollment in the state pension plan is mandatory for everyone working in Germany.
  2. Company Pension. The company pension plan is a plan workers can monetarily contribute to via the employer. The plan intends to augment the state pension plan and has become the most popular retirement plan in Germany.
  3. Private Retirement Scheme. This plan is established through insurance organizations and banks. The German government promotes these plans through tax incentives and bonus benefits.

Despite the three main pension plans that Germany has implemented, those working for a lifetime in Germany still struggle to make ends meet after retiring. This is especially relevant for those employed in low-earning careers.

The Basic Pension Plan

Since the amount of state pension given to a pensioner depends on their net income, those who participated in low-earning jobs are at increased risk of facing poverty. To address this, Germany recently decided to implement a new basic pension plan, which ensures that those who have been working in Germany for a significant amount of time will receive a basic amount of pension.

In January 2021, the German federal government enacted the basic pension plan to combat elderly poverty in Germany. This plan guarantees that individuals who have contributed to the German state pension system for a minimum of 35 years receive a basic pension in addition to their original state pension. The additional basic pension ensures that the pensioner has enough money to pay for fundamental necessities. No application is necessary as the government utilizes an automatic system for these basic pension benefits.

According to German legislator Malu Dreyer, more than 1.4 million people will benefit from the basic pension plan. Furthermore, a significant portion of women will benefit from the plan as four out of five beneficiaries will be women. The plan also rewards those who took time off work for familial caretaking as long as their total employment time meets the minimum requirements.

Looking to the Future

In hopes of decreasing elderly poverty rates, Germany implemented the basic pension plan, which aims to provide its low-earning citizens with enough funds to secure their basic needs after retiring. The state pension only provides the pensioner with 70% of their net income, which can be problematic for citizens who spent their lives working in low-paying positions.

The German government estimates that the plan will benefit more than 1.4 million people, providing hope that more than a million elderly citizens will not live the remaining years of their lives in poverty. Overall, the German government presents a clear path ahead for combating elderly poverty in Germany.

Lauren Spiers
Photo: Flickr

Elderly Poverty in Belarus
As it spends around $5 billion yearly on pensions, Belarus, a landlocked country in Eastern Europe, has seen a significant reduction in elderly poverty in the past two decades. Experts estimate at least a 25% reduction in elderly poverty in Belarus since 2002. Pension programs in Belarus contribute to lower rates of elderly poverty in the country.

Pension Programs in Belarus

Belarus has various social pension programs, including veteran and survivor pensions. However, the program with the most recipients is the old-age pension. The direct transfer of wealth through the old-age pension began in 1990, with men 60 and older and women 55 and older becoming eligible for pensions. The average pension is $150 per month. If the elder served in a war, has a disability, has more than five children or earned an above-average income, the elder must meet fewer qualifying conditions, but will still receive no more than around $300 a month.

In 2019, 5% of the Belarusian population lived under the poverty line. Elders, or people 50 and older, represent 20% of Belarusians and are roughly 3% less likely to fall into poverty than the general population. Elders remain vulnerable to falling into poverty, and many continue working past retirement age. Nonetheless, Belarus has achieved overall success in combating elderly poverty in recent decades.

Economic Growth Despite the Financial Crisis of 2009

During the years leading up to the 2009 financial crisis, Belarus began outperforming the Europe and Central Asia (ECA) region in terms of the $5/day poverty metric. In 2001, Belarus’s $5/day poverty rate was roughly the same as the ECA average. However, by 2009, Belarus had a significantly lower $5/day poverty rate than the ECA average.

Furthermore, between 2006 and 2011, Belarus’s rate of growth of expenditures in the bottom 40% of the population was 9% per year, the highest rate in Europe. Most European countries registered negative expenditure for the bottom 40% of incomes as they were recovering from the financial crisis. Belarus’ superior economic growth resulted largely from favorable energy pricing from its neighbor Russia and the resulting strong trade relations between the two countries.

Strong, reliable economic growth led to the expansion of sectors such as manufacturing and agriculture and enabled high levels of employment. Manufacturing and agriculture exports increased by 85% and 90% respectively from 2001 to 2008, with average wages increasing 10%. Therefore, the state budget grew and the funds set aside for pensions grew as well. Growing sectors offered increased employment opportunities for capable elders. As pensions and employment rose, elderly poverty dropped.

Growth in Both Urban and Rural Areas

From 2003 to 2008, the majority of elderly poverty reduction in Belarus occurred in urban areas such as the capital city, Minsk. However, from 2008 to 2015, the greatest change occurred in rural areas, which saw a 75% reduction in poverty between 2003 and 2014 while poverty decreased by 54% in cities.

Rising Demand for Pensions

With the country’s economy on a positive trajectory for more than two decades and the poverty rate falling, the average elder in Belarus receives a $150 monthly pension. In addition, increased exports spurred growth in agriculture and manufacturing, which provided job opportunities for elders seeking to increase their income during retirement. While the country is currently recovering from the 2014 recession, strong growth must persist in order to maintain low rates of elderly poverty as Belarus’ population is aging and the demand for pensions will continue to rise.

Max Sidorovitch
Photo: Unsplash

Elderly Poverty in Canada
Canada has an excellent track record when it comes to decreasing elderly poverty. Between 1976 and 1995, the rate of elderly poverty in Canada dropped from 36.9% to just 3.9%. Yet in the past two decades, elderly poverty in Canada has grown.

Current Elderly Poverty Rates in Canada

According to Ryerson University’s National Institute on Ageing, the rate of low-income older Canadians had increased to 14.5% by 2016. The situation is even more severe among certain groups, a recent study found. The nonprofit Social Planning Toronto and the research center Well Living House published a study in August 2020 finding that, as both a direct and indirect result of colonization, more than 90% of Toronto’s Indigenous seniors live in poverty. Poverty rates are higher among Indigenous Canadians because colonization has diminished Indigenous power and social structures.

Meanwhile, Toronto’s “racialized” and immigrant seniors live in poverty at double the rate of their counterparts. Discrimination leads to lower pay for racialized Canadians and immigrants, leaving them with less to live on when they retire. Additionally, immigrants may have less time to accrue assets and savings in the country before retirement.

Seniors Falling Through the Cracks

According to the National Institute on Ageing, Canada’s Retirement Income System stands on three pillars: government assistance, pensions that employers provide and seniors’ personal retirement plans, including tax-free savings accounts and non-registered assets.

However, in recent years, pensions have become a less common resource. Only about a third of working Canadians had registered pension plans from their employers in 2016, the National Institute on Ageing reported. Furthermore, even those with pensions still risk losing part of their pensions if the companies they work for go bankrupt.

Moreover, the most reliable and lucrative type of pension, a defined benefit (DB) pension, is becoming scarcer. Healthcare of Ontario Pension Plan, a defined benefit plan, explained in a 2017 report that DB pensions “are paid for life, and, for some, even rise along with inflation.” In contrast, with other types of pensions, which are becoming more prevalent, income is not guaranteed and may fluctuate over time.

Furthermore, saving for retirement is not possible for all Canadians, as the Healthcare of Ontario Pension Plan report notes. Those without pensions are in a particularly difficult position. The report indicated that the median retirement savings among pensionless Canadians are just $3,000.

Recent Steps to Combat Elderly Poverty

In early 2021, the government acted to address elderly poverty in Canada. In May 2021, Prime Minister Justin Trudeau announced that he would include several provisions in the 2021 budget to aid seniors. Under this new budget, the government’s Old Age Security Pension for seniors will increase. The budget states that the government will give full pensioners $766 more in the first year of the change and will adjust the amount based on inflation in future years.

About 3.3 million Canadians 75 and older will receive increased pensions under the 2021 budget. They will also receive a lump sum of $500 in August under the 2021 budget. Acknowledging that “too many seniors are worried about their retirement savings running out,” the government expressed its commitment to supporting seniors’ solvency in retirement.

However, the new budget has also received criticism for not doing enough. The Canadian Federation of Pensioners castigated the budget in a press release for failing to keep defined benefit pensioners from losing pension money when companies go bankrupt. Another organization dedicated to seniors, C.A.R.P., explains that pensioners of bankrupt companies “are not automatically able to negotiate their terms when assets are divided,” while other creditors are. As a result, if companies go bankrupt and cannot pay pensions, pensioners receive only part of what they should.

Changing Non-Guaranteed Pensions and Bringing in Bill C-253

C.A.R.P., the Canadian Federation of Pensioners and a third organization called the National Pensioners Federation have teamed up to change the system of non-guaranteed pensions. The organizations have suggested a government pension insurance program for federally regulated pensions. They are also pushing Canadians to contact their government. The Canadian Federation of Pensioners, in particular, encourages Canadians to ask their representatives to support Bill C-253, which will help prevent pension reduction when companies go bankrupt. A committee took the bill to the House of Commons as of June 6, 2021. The bill’s passage would be another step toward bringing down elderly poverty in Canada.

Victoria Albert
Photo: Pixabay

alleviate Elderly Poverty in GreeceIn December 2020, Trade Economics reported that 13.20% of Greeks older than 65 are vulnerable to poverty. Poor economic conditions in Greece during the past decade resulted in declining wages for citizens in their early 50s. Many believed they would be in a better financial situation by retiring early, especially since pension benefits for Greeks are higher than in other EU member countries. However, elderly poverty in Greece is on the rise. According to Reuters, Greece has a larger older population, and therefore, a rise in early retirements hurt its economy. As a result, the government reduced retirement benefits to help keep people in the workforce for longer. However, the reduction in retirement benefits and additional taxes imposed contributed to higher elderly poverty rates. Organizations aim to alleviate elderly poverty in Greece.

Efforts to Alleviate Elderly Poverty in Greece

In The Guardian, Jon Henley reported in 2015 that 45% of retired Greek senior citizens lived in poverty. Unemployment rates were high among the older and younger populations. Therefore, many elderly citizens had to contribute to their family finances, which negatively impacted their own finances. According to The National Herald, 75% of retired Greeks struggled to pay for food and afford medical expenses in 2017.

Desmos, a nonprofit organization, helped provide financial aid, including food, to those experiencing elderly poverty in Greece. As of 2018, Desmos was able to assist 2,000 older people and provide charities with other essentials to help more people. That same year, Trading Economics announced that the elderly poverty rates in Greece were at 11.6%. This is its lowest rate in the past decade.

Programs Assisting Those in Need

Other organizations and the government have stepped in to help alleviate elderly poverty in Greece. In her article for the Huffington Post, Danae Leivada introduced Life Line, a nonprofit offering food services to those experiencing elderly poverty in Greece. Life Line began assisting elderly citizens in 2011 and has been able to serve up to 900 people a month. Life Line includes a service operating 24 hours a day to those who are in urgent need of food.

Leivada introduced another NGO called 50+, which relies on funding from the EU and has been operating since 2005. This organization advocates for the rights of senior citizens. It also provided resources to help them become more active in society. In addition, 50+ also advocates for a domestic policy to address and prevent elderly poverty.

Pension Issues

According to the European Neighborhood Instrument Cross-Border Cooperation Med Program (ENI CBC MED), the government offers financial aid to senior citizens that do not receive pension benefits or insurance and have a financial need. The financial aid also includes assistance with rent to those who cannot afford housing. Also, the Department of Social Insurance and Control offers financial assistance to those with underlying health conditions.

The ENI CBC MED indicated that retired citizens who are 67 and older and previously worked in the agriculture industry can receive a pension from the Agricultural Insurance Organization (OGA). OGA has provided pensions since 1961 but has changed eligibility requirements on numerous occasions. The current requirements are that senior citizens must show that they have a financial need and do not have insurance.

The ENI CBC MED mentioned that the state does not provide financial assistance to elderly care centers. However, the state has two public programs that provide services to senior citizens. One of these programs offers facilities that operate as an elderly daycare, looking after the older population and assisting them with their needs.

Taking Back Their Pensions

According to Pension Funds Online, the retirement benefits Greeks receive depend on whether they worked for the government, private companies or freelanced. The benefits senior citizens can currently obtain are a contribution rate and an additional pension. The Associated Press reported that the government initially intended to continue reducing the number of retirement benefits beginning in 2019 to focus on paying off its debt but decided not to do so.

ABC News stated that in July 2020, many retired Greeks took the matter to a higher court. The court evaluated whether the 2015 government reduction of retirement benefits was legal. The court ultimately determined that the pension benefit cuts were unconstitutional because the government did not use the appropriate legislative process necessary to implement such measures.

The court even determined that the government needed to reimburse citizens for the reduced pension benefits, but did not indicate whether all retired Greeks or just the appealers of the case would receive the money back. The government shared that it would evaluate the court’s decision before deciding how it would reimburse benefits.

The Effect of COVID-19

According to the ENI CBC MED, Greece went on lockdown for the first months of the COVID-19 pandemic. As a result, various organizations created online systems to help look after the elderly. These organizations also allowed senior citizens to call when in need of food and medicine.

According to Reuters, the International Monetary Fund (IMF) stated that Greece’s strong response to COVID-19 helped put the country in better financial standing in 2021. The IMF also projects that Greece may experience further economic growth in 2021.

The Greek government has implemented public programs and measures to help alleviate elderly poverty in Greece. Greece’s recent economic recovery and the court’s decision to uphold rights to pension benefits serve as indicators that things could continue to improve, both for senior citizens and Greece as a whole.

Cristina Velaz
Photo: Flickr

Elderly Poverty in Greece
Elderly poverty in Greece is growing at an alarming rate. The government has been unable to address this issue. As a result, nonprofits are stepping up to alleviate some of the burdens carried by the elderly. Here are eight facts about elderly poverty in Greece.

8 Facts About Elderly Poverty in Greece

  1. Austerity Measures on Relief: Recent government measures in the past two decades have resulted in lower pensions for senior citizens. Pensions greater than 1,000 euros became continuously cut throughout the years, with pension bonuses completely removed from government-provided relief. This has led to serious challenges for seniors. Many had retired or were close to retiring when these changes were implemented. As a result, there was no time for seniors to adjust their savings plans or extend their careers.
  2. Poverty Often Increases with Age: Seniors above the age of 75 are more likely to experience poverty than seniors ages 55 to 75. This is often due to health issues and medical expenses. Additionally, for many seniors, retirement savings are difficult. For individuals who are already struggling with poverty or who are living frugally, there is little room for retirement savings. Those who do save for retirement do not end up saving enough to live in an increasingly expensive world. When health issues also arise, they create unexpected medical bills that may not be covered completely by health insurance. In some cases, seniors do not even have health insurance to help with financial burdens.
  3. Lack of Immediate Support: Most seniors don’t have years to wait for policy change or government action to address poverty; they require assistance immediately. Finding the funding and resources to do this requires more than just government attention or even NGO attention. The issue can only be solved by joint action by the government, NGOs and other global poverty organizations.
  4. Increased Cost of Living: Most households calculate the absolute least amount they have to spend per month to be near 1,500 euros. Unfortunately, this is quantified as higher than what the government considers “extreme poverty.” As a result, there are many in the elderly population that need food assistance and other forms of relief but do not qualify. To solve this problem, the government must re-evaluate its criteria for aid.
  5. Rising Healthcare Costs: As seniors age, many begin to face health issues. Some possess health insurance; however, this does not guarantee that there will be no costs. Rather, it subsidizes some costs. Seniors face the challenges of affording medicines, treatments, hospital visits and routine checkups to keep up with physical health. Furthermore, seniors are more likely to undergo medical tests for symptoms that could be suggestive of other issues due to their age. This means potentially ordering numerous expensive tests that don’t lead to a diagnosis.
  6. The Need for Increased Pensions: Increased pensions will most directly help reduce elderly poverty in Greece. The current amount the elderly in Greece receive from their pensions is too low for a secure standard of living. The Greek government has tried to address this issue many times but has yet to find a successful plan in altering the pension. Instead, pension benefits have been cut, value-added tax has not been raised and the entire issue has been swept under the rug.
  7. Government Struggles: Greece has had difficulties figuring out how to address elderly poverty in Greece. The country currently spends more than any other European country on economic output on retirement funds. Unfortunately, this has been not enough, as the issue goes past just monetary funds. The government should focus on creating support systems for elders and providing better access to affordable healthcare in order to decrease expenses.
  8. Nonprofit Efforts: A prominent nonprofit that has been making strides in addressing elderly poverty in Greece is Caritas Hellas. This organization addresses poverty in Greece, but it has also been successful in helping alleviate some of the burdens of the elderly population. The organization distributes food and clothes and provides services of counseling and educational support to around 300 individuals. Furthermore, the organization works on strengthening family links to set up a lasting support system for the elderly.

The Way Forward

Only after substantive institutional changes have been made will the issue of elderly poverty in Greece decrease. Government officials should work in collaboration with nonprofits in order to address the needs of the elderly and set up long-lasting systems of support and aid to reduce the number of those suffering from poverty.

– Manasi Singh
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