Transcript Sylvia Beales - Overseas Development Institute

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How cash transfers can support the poorest
older people and children
Sylvia Beales
June 2005
HelpAge International
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The case for cash transfers and social protection
 Social protection is a right; regular cash supports access to health,
education and nutrition
 Cash transfers reduce absolute poverty and hunger and support MDG
achievement
Evidence shows:
 Cash transfers helps poor households manage risk, including that of
HIV/AIDS
 Cash transfers enhance assets and more secure livelihoods
 Regular cash supports family cohesion and life chances of children
 Poor (older) people prefer regular transfers of cash to other interventions
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Development policy, social protection and cash transfers
 Call for better and more effective aid – as well as increased aid – to
reach the billions still trapped in poverty
 Recognition that targeting the poorest is required for MDGs
 Greater emphasis is needed on frameworks for equity & redistribution to
reach the poorest
 More equitable and rights based poverty programmes deliver better
development outcomes
 Outcomes of the Commission for Africa report; all African countries to
have social protection strategies for 2007, a rights and inclusion framework
to support them and predictable funding streams
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Targeting the poorest
The poorest include both children & older people (CPRC, World Bank)
 Estimates of poverty rates by age groups generally conclude that poverty is
higher among the young & the old
 Later life poverty is increasingly difficult to escape with increasing age
 Older people tend to live in households with less potential for economies of
scale
 Older women and men are often children’s primary carers
 Approx 100 million older people live on less than US$1.00 a day
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Rationale for cash to support HIV/AIDS affected households
 Across SSA an average of 30% of households are headed by a person aged
55+
 Over 65% of older-headed households have at least one child under the age
of 15
 In southern Africa 59% of double orphans live in an older-headed household,
compared with 30% of non-orphaned children
 Although a growing concern, numbers of orphan-headed households remain
very low, with less than 1% of orphans being a household head
 Households headed by older women are twice as likely to include orphans as
households headed by older men
 80% of older people who are primary carers do not receive a regular income
(Source: UNICEF/HAI 2004)
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Intergenerational approaches to poverty reduction
Recognise and support existing interdependence, contributions and
reciprocity; and help us recognise issues of difference, the dynamics of
power relations and how decisions are made
 in households
 between carers and dependants
 within and between age groups
 within & between formal & informal support networks
They foster mutual support and accountability at community and
government level.
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Intergenerational approaches to poverty reduction: examples
Brazil and South Africa – established pension schemes
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Poverty headcount would be 5.3% larger in Brazil, 1.9% larger in South
Africa
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Poverty gap would be one-third larger in Brazil, two-thirds larger in South
Africa without the non-contributory pension

A non-contributory pension recipient reduces the probability of household
poverty by 21% in Brazil, 11% in South Africa
(Source: Barrientos et al/HAI 2003)
Zambia; Pilot scheme, Kalomo District, monthly cash transfers of US$6-8
to 1,000 households
 Improved school attendance, clothing and appearance

Positive changes in self esteem, social status, assessment of livelihood
security and hope for the children

Disabled, sick and children benefit over the average
(Source: Bernd Schubert, advisor to Kalomo scheme.
Email: [email protected])
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Lessons from Kalomo on identifying and targeting the poorest
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Absolute poverty in Zambia already estimated at 73%
Pilot scheme is attempt to reach the chronically poor – lowest 10%
– affected by HIV/AIDS
Conventional poverty measurements did not suffice for targeting
poorest 10% of households
Food poverty line chosen – this was determined at 1800kcal
Extreme poverty line (hunger) calculated at 1400 kcal and under –
illustrated by one meal a day, begging, destitution
Typical households under this line have children and older people
with no ‘able bodied adult fit for productive work’
Typical households also have older people caring for orphans
(HIV) and other vulnerable children; the children also support sick
and disabled older people
(Source: B Schubert the Pilot Social cash transfer scheme Kalomo District CPRC Working Paper 52)
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Reflections from Kalomo: ‘The poor are not irresponsible, and
grannies are excellent economists’
Use of transfers: US$6 a month without children, US$8 a month with
children
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Food (maize)
Soap, blankets, clothing, school items, transport to health facilities
Investments in animals seed and labour
Support to others – ‘chilimba’
Children and sick and disabled benefit more than others
Beneficiary household composition
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84% of households headed by older persons and females
50% of households are HIV/AIDS affected
60% of household members are children
71% of the children are orphans
(Source: B. Schubert, presentation to DFID 3.6.05)
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HAI/DI Survey of attitudes to social protection and cash transfers in
Africa
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Social transfers -in the form of child and foster care grants, school
support programs and social pensions for older carers - are
already recognised as effective mechanisms to support
households dealing with increasing poverty and the impact of
HIV/AIDS
Regional institutions and national governments described
enhanced social protection - and cash transfers - as components
of a strategy to combat social exclusion and deliver rights, which
they are profiling as important in overall poverty reduction
National governments are concerned that social protection and
cash transfers lack donor profile and funding
Greater support, financing, capacity building and recognition is
needed for Social Welfare Ministries
A number of African countries are introducing and developing
social protection strategies
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The case for a universal cash transfer paid to those 65 and
above
 Is transparent
 Simplifies administration
 Removes stigma
 Reduces opportunities for corruption
 Minimises work disincentives
 Is gender-neutral
 Is affordable (2-4% of GDP – ILO 2005 estimates)
 Protects against risk
 Is a right
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Old age and disability pensions at US$0.50 per day are affordable within a
social protection package of education, health and child benefit
Tanzania: Base case
Basic social protection expenditure in percent of GDP
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
2005
2009
2013
2017
2021
Universal pensions
Child benefit
Basic health care
Administrative expenditure
2025
2029
2033
Basic education
Source: Pal, K., Behrendt, C., Léger, F., Cichon, M. and Hagemejer, K. 2005. Can low income countries
afford basic social protection? First results of a modelling exercise, SOC/FAS Discussion Paper, Geneva:
International Labour Office.
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Basic social protection is affordable if countries and donors commit
to social protection as an essential tool of poverty reduction
Tanzania: Base case
Option 1 (based on 2003 fixed proportion of projected govt. expenditure)
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
2005
2009
2013
2017
2021
2025
2029
2033
Required External financing in % of GDP
Government financing in % of GDP
Source: Pal, K., Behrendt, C., Léger, F., Cichon, M. and Hagemejer, K. 2005. Can low income countries
afford basic social protection? First results of a modelling exercise, SOC/FAS Discussion Paper, Geneva:
International Labour Office.
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What is needed
Greater Political Will; enhanced social protection and cash transfers are
possible and affordable
Donors and national and international NGOs can
 Support developing country governments to explore options, and support
national political debate and expenditure to target the poorest
 Support the scaling up of pilots such as Kalomo, Zambia and new pilots
(Tanzania) to build experience
National governments can
 Identify Social Protection and cash transfers in policy and funding
mechanisms, including PRSPs and donor budget support
 Explore impact of SP through social budgets and PSIAs
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Questions for discussion
 How to measure social protection benefits as well as the costs?
 Should we be measuring the costs of not extending social protection
and cash transfers?
 How do universal cash transfer schemes fit with existing provision
(e.g. contributory schemes) and informal savings schemes?
 How can administration – delivery, records - be supported?
 How to target effectively and minimise corruption?
 How to secure community engagement including monitoring?
 How to secure donor policy and funding engagement to support
national social protection schemes?
 Conditional as opposed to universal transfers?
 Are the poor to be trusted?