Older people and social protection in response to COVID-19

The COVID-19 pandemic has affected all segments of the population. However, as the pandemic continues it has become apparent that older people and those with underlying health conditions are at higher risk of infection and are more likely to have severe complications, and mortality is disproportionately higher among older people.

Older people have also experienced a significant loss of income as a result of lockdowns and other responses introduced by governments to control the pandemic. Most older people in low- and middle-income countries are already living in poverty or in vulnerable conditions and the crisis has worsened their situation. Older women tend to face a greater risk due to a lifetime of accumulated impacts of inequality. The situation is particularly worrying for the Asia and Pacific region, which is home to around 60 per cent of older people globally.

Income in old age in these countries is usually drawn from family support and work, and to a lesser extent from pensions. However, the pandemic has reduced families’ ability to support older people as they struggle to cope with the impacts. For example, analysis by UNICEF in May 2020 indicates that 40 per cent of households in Sri Lanka have lost their incomes entirely and another 32 per cent have experienced a fall in income.

Most older people work in the informal sector with limited or no protection. They are more likely to lose their jobs during the crisis and take longer to get new jobs. Access to pensions is limited; where they exist, the benefit is often inadequate. The World Bank estimated that there will be an additional 71 to 100 million poor people as a result of COVID-19, and older people will certainly constitute a significant part of that number. Analysis of the Life Cycle Deficit (LCD – the gap between income and expenditure throughout life) in older age cohorts in Bangladesh indicated that the elderly LCD may increase by around 15 per cent from pre to post COVID-19, implying a growing gap between older people’s incomes and expenditure needs.

Various measures have been introduced by governments in response to the pandemic, and social protection benefits are one of the major components. However, most of this investment has been in high-income countries. Spending in low- and middle-income countries in this region has ranged from only 0.02 to 0.8 per cent of GDP, which is too small to be effective in responding to such a large crisis.

While older people are disproportionately affected by the crisis, few government responses specifically target older people. As of May 2020, around 35 per cent of global social protection responses to COVID-19 targeted older people, and 15 per cent were from countries in this region. The most common form is some type of adjustment through pension systems.

Pensions face many challenges, particularly in low- and middle-income counties, including low coverage and the inadequacy of benefits. Nearly half of older people in the Asia and Pacific region do not have a pension and it varies across the region with only 23 per cent coverage in South Asia. The average benefit level is around 12 per cent of GDP per capita, which means the protection is limited – even in normal times.

During the past few months of the pandemic, it has been observed that countries with existing social protection schemes including pensions are in a better position to respond, particularly those with more comprehensive, universal coverage. Poverty-target programmes, which are usually characterised by high exclusion rates and low coverage, are less effective in responding to a larger crisis like this pandemic.

The pandemic, therefore, highlights the need to invest more in social protection to expand coverage and increase benefits. Analysis by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) shows that progress in poverty reduction that is undermined by disasters can be regained by investing in key sectors such as infrastructure, health and education, but the greatest benefits result from social protection. The COVID-19 pandemic is a good reminder to invest more in social protection, including pensions, to ensure that both women and men are sufficiently protected in both normal times and during crises. To achieve this, social protection has to be shock responsive: able to respond to sudden shocks that affect a large number of people, as well as being gender and age-sensitive.

Written by Usa Khiewrord, Regional Programme Adviser (Social Protection), HelpAge International