Uganda to raise age for elderly welfare benefits to 80

Uganda plans to increase the minimum age for elderly people to join the country’s welfare benefits scheme by 15 years in the next financial year, in a drastic move that threatens to lock out many poor and aged people.

The minimum age for Social Assistance Grant for Empowerment (Sage), will be increased from 65 to 80 in the 2019/20 financial year, even as serious questions surrounding the impact of inflation against monthly benefits have also emerged.

A pension industry report published last month by the Uganda Retirement Benefits Regulatory Authority (URBRA) shows how the change in the minimum qualification age will affect potential beneficiaries in new districts targeted for inclusion in the scheme in the next financial year. However, the change will not apply to existing beneficiaries.

The Sage scheme is a social welfare programme whose pilot was launched in 2010. It is intended for poor and elderly people who lack stable sources of income, family support structures and live below the poverty line.

The scheme currently offers beneficiaries a monthly upkeep allowance of Ush25,000 ($6.7) in 57 districts.

In 2010, scheme beneficiaries received a monthly allowance of Ush23,000 ($6), while seed funding was provided by the British government, official records show.

The amount caters for food and other living expenses.

The overall number of districts in Uganda has grown to roughly 131 but the total value of funds received by beneficiaries over the past eight years remains unclear.

Efforts to verify the actual amount disbursed with relevant government ministries and agencies had not succeeded by press time.

The number of Sage beneficiaries stood at 190,466 people by the end of March 2018, URBRA data shows.

Whereas changes in the qualification age point to growing financial pressures faced by the Sage programme, this radical move is bound to leave many old, needy citizens between 65 and 79 years of age out in the cold, with no access to monthly benefits to purchase food and other personal items.

A rise in the number of poor, elderly persons is likely to swell the country’s poverty levels. It is estimated that more than eight million Ugandans live below the poverty line out of a total projected population of 37.7 million people as at the end of 2017, according to government data.

Findings generated from the 2014 census revealed that only 2.7 per cent of Uganda’s population are elderly people aged 65 and above.

Higher death rates

The rise in the numbers of the poor could also escalate risks of early death, observers say.

“Raising the minimum qualification age for the Sage scheme beneficiaries will reduce the number of eligible people, but it does not solve the vulnerability question facing this country,” argued Julius Mukunda, co-ordinator of the Civil Society Budget Advocacy Group.

Mr Mukunda blames the government’s inability to take care of the elderly poor partly on prioritising high expenditure political projects at the expense of more deserving sectors, and wastage.

For example, the National Agricultural Advisory Services programme receives Ush2.5 billion ($669,333) every year, but 40 per cent of the amount is lost through purchase of poor quality seeds distributed to local farmers.

Despite steady upkeep allowances paid to selected elderly people, strong inflation pressures experienced since 2010 have diminished purchasing power levels associated with Sage benefits.

Prices of household products, kerosene, basic medicines, clothing and transport fares have increased steadily over time, leaving little or no room for additional spending among poor, elderly citizens.

For example, the cost of sugar has risen to around Ush4,500 ($1.2) per kilogramme while a litre of kerosene sells for Ush3,500 ($0.9) on average. One Panadol tablet currently goes for an average of Ush200 ($0.05), while one kilogramme of tilapia fish sells for Ush25,000 ($6.7).

“Inflation pressures related to medicines are probably the biggest worry for many elderly people living in the rural areas; food driven inflation poses a lesser headache because it usually registers negative outcomes on the economic charts,” said Joseph Areu, a retired finance manager formerly employed by the International Finance Corporation, the private sector financing arm of the World Bank Group.

Other retirees are equally disturbed by the state of Uganda’s social welfare system.

“The local village council system should be used to identify elderly, needy people who are not eligible for Sage benefits but are helpless. Such individuals can be looked after by well to do, charitable people in their communities,” said Fred Tumwesigye, a retired employee of British American Tobacco Uganda and a non-executive director at the company.

There is also the argument that some elderly people can be taken care of by their families instead of the government.