Anticipating the Growth of Elderly Population: Indonesia and Australia Promote Social Protection for the Elderly

23 May 2018

Indonesian and international aged care experts yesterday gathered at the Borobudur hotel to talk about the economic challenges that Indonesia’s elderly are facing, and to learn how other countries have successfully used social protection to tackle this problem.

Social protection – through cash transfers for the elderly - is becoming increasingly important globally to reduce poverty and inequality, not just for the elderly, but for all citizens. Old age grants in other countries have supported the elderly to engage in the labour force; boosted economic growth in local economies; and improved the dignity and economic independence of the elderly themselves. 

In Indonesia, the social protection landscape for the elderly is very limited. Civil servants and those in the formal sector receive contributory pensions, but the vast majority of the elderly - particularly those in the informal sector, who live alone and poor - are vulnerable to old age poverty.

“It is important for Indonesia to continue developing and reforming social protection programs and policies to reach more vulnerable populations, such as the elderly. At the moment, around 76 percent of elderly individuals from the bottom 40 percent have access to the National Health Insurance (PBI-JKN beneficiaries), and according to the latest publication by BPS in 2017 around 43 percent of elderly households have access to Raskin/Rastra program. We can certainly use this global evidence and experience, adapt it within the Indonesian context to formulate social policy and social protection programs directed towards the elderly,” said Suahasil Nazara, Head of Fiscal Policy Agency.

The elderly are at particular risk of falling into poverty, especially those who are economically insecure.  The likelihood of disability increases significantly with old age, thereby reducing people’s capacity to work.  More than half of Indonesian people over the age of 65 experience disability or physical limitations, but – in the absence of income security in old age - have to still engage in strenuous work to support themselves.

The problem will continue to grow as the elderly population increases. Around 6 per cent of Indonesia’s population will be 65 or over by 2020. This will rise to 8 per cent by 2030 and to 14 per cent by 2050. Furthermore, the highest rates of poverty are found among the elderly, where one in five are living below the national poverty line. Women, particularly widows, are more impacted than men.

Most elderly people are living with their children – but 80% of the population aged 65 years and above are living in households that earn less than 50,000 IDR a day and around 14% female elderly lives alone. This places a major financial burden on families. As Indonesia becomes an aging society, more investment in social transfers for the elderly is needed.

“We are happy to support Indonesia to share knowledge and learn from international experience on how social protection programs and policies can better respond to the needs of all Indonesian citizens, including the elderly,” said Fleur Davies, Minister Counsellor, Australian Embassy Jakarta.

This one-day conference is organized by the Secretariat of the National Team for the Acceleration of Poverty Reduction (TNP2K), in partnership with Indonesia’s Fiscal Policy Agency of the Ministry of Finance (BKF-Kemenkeu) and with support from the Australia’s Department of Foreign Affairs and Trade (DFAT). The conference convened international experts, academics, practitioners, and government representatives from South Africa and Thailand as well as Indonesia.


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