The Old Age Allowance (OAA) in Thailand is a government program designed to provide financial support to elderly citizens who lack sufficient income or savings to support themselves in old age.
Thailand's first pension system was introduced in 1902 and was initially designed exclusively for civil servants. In contrast, the Social Security pension scheme was introduced in 1991, to provide retirement benefits specifically for private-sector employees. Additionally, the Old Age Allowance program was created to ensure that all Thai citizens who do not qualify for these government pensions still receive some form of financial support in their later years.
In 2009, the Thai government broadened the reach of its social pension system to include elderly individuals who were not covered by other pension programs, such as the Civil Servant Pension. This expansion introduced a non-contributory pension scheme, which marked a significant shift from the previous Old Age Allowance program that only supported the poorest elderly citizens. Post-reform, the program now benefits over 5.65 million elderly people, covering around 80% of Thailand's older population [1].
| Program Type | Eligibility |
|---|---|
| Pension (1902-present) | Contributory: Government officials/ Civil Servants |
| Social Security program (1991-present) | Contributory: Private sector employee |
| Old Age Allowance (1993-present) | Non-contributory: All Thai citizens excluded from the pension and social security program |
Eligibility Criteria
- Age Requirement: The primary eligibility criterion is age. Thai citizens aged 60 years or older are eligible for the OAA.
- Income and Wealth Assessment: The allowance is primarily targeted at low-income elderly citizens. Those who are already receiving a pension or other forms of regular income support from the government might not be eligible.
- Residence: Applicants must have Thai citizenship and be a resident in Thailand.
Allowance Amount
The amount provided by the OAA is determined by the age of the recipient:
- 60-69 years old: 600 THB per month.
- 70-79 years old: 700 THB per month.
- 80-89 years old: 800 THB per month.
- 90 years and older: 1,000 THB per month.
Despite the allowance providing much needed financial support, research suggests the following:
OAA was not necessarily associated with a decline in non-monetary intergenerational support for the parents. Findings reveal that older persons whose main income source was OAA were less likely than others to report income adequacy and positive psychological well-being, suggesting that the scheme may have little impact in dampening inequality among older Thais. [2]
Application Process
- Application Submission: Eligible citizens must apply in person at their local district office or through the local administrative organization.
- Required Documents: Applicants need to submit several documents, including their Thai ID card and house registration.
- Review Process: The application is reviewed by the local authority to ensure the applicant meets all eligibility criteria.
Challenges and Issues
Governmental Challenges
The Old Age Allowance (OAA) program in Thailand is burdened by several challenges from the government's perspective. Primarily, there are budgetary constraints that limit the program's effectiveness.
The 2009 expansion of the scheme aimed to cover more beneficiaries, but shifting from a targeted to a universal approach has stretched the budget thin, raising concerns about long-term sustainability. As the aging population grows, the government faces pressure to allocate more funds, which could exacerbate public debt if revenue generation doesn't keep pace.
Additionally, the current political instability in Thailand, characterized by shifting political alliances, creates significant challenges for the development of a long-term pension strategy.
Furthermore, the instability can lead to delays in necessary reforms or the implementation of policies that are only short-term solutions, rather than addressing the structural issues that affect the sustainability of the pension system. As a result, there is a risk of increasing public debt and economic strain, as the government may struggle to provide adequate pensions to all eligible citizens without a coherent and stable policy framework.
Beneficiary Challenges
For the recipients, the OAA presents its own set of challenges. The insufficient monthly allowance fails to cover basic living costs, particularly for those without additional income or family support. This amount, often the primary source of income for many elderly, is inadequate for maintaining a decent quality of life.
Low program awareness in remote areas means that many eligible elderly are unaware of their entitlements, further limiting the program's reach and effectiveness. Those without younger family members to assist them may struggle to understand the process due to a lack of education. The unbanked may be excluded entirely, as they may not know how to access the Old Age Allowance (OAA) outside of the banking system.
In Summary
The Old Age Allowance (OAA) program in Thailand is undoubtedly a vital financial safety net for the elderly, particularly for those who do not have access to other pension schemes.
While the program has achieved significant success since its reform, enabling millions of older Thais to receive some form of financial assistance, it is also clear that challenges remain, with many arguing that it needs to be expanded or supplemented to better meet the needs of the country's aging population.
By examining both the program’s achievements and its limitations, policymakers and stakeholders can better address the needs of Thailand's aging population, ensuring that the OAA continues to evolve and effectively supports the welfare of the elderly in the long term.
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References:
1. Pensaengon, K. (2023). The Development and Challenges of the Old Age Allowance Program in Thailand After the Policy Reformation in 2009. Silpakorn University, Thailand. Retrieved from https://papers.iafor.org/wp-content/uploads/papers/acss2023/ACSS2023_68601.pdf
2. Teerawichitchainan, B. (2021). Expansion of Thailand’s social pension policy and its implications for family support for older persons. International Journal of Social Welfare. Retrieved from https://onlinelibrary.wiley.com/doi/full/10.1111/ijsw.12481