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
Photo: Flickr