The government decision on Wednesday to lower the eligibility threshold for elderly allowance to 65 years from 70 years is set to increase the burden on the already strained state coffers by billions.
Everyone 65 years or older apart from those who are being remunerated or receiving pension from the government will now get Rs 2,000 every month. The threshold earlier was 70 years and around 900,000 were receiving elderly allowance, according to Director at the Department of Central Registration Khil Prasad Subedi.
The number of recipients is projected to rise to around 1.50 million after the new announcement. The number of Nepalis aged between 65-69 years was 627,000 in the year 2073 that ended in mid-April 2017, according to the Central Bureau of Statistics (CBS). The CBS has projected an annual growth rate of 8-12 percent for the age group.
Not all of them will be eligible for the elderly allowance. But former deputy director general of CBS Rudra Suwal, who was coordinator of the Census 2011, says that the maximum proportion of that age group who may already be on government payroll or receiving pension can only be 10 percent.
That means at least 550,000 more will receive elderly allowance correcting for that 10 percent. This means that the government, that is already paying Rs 21 billion to around 900,000 annually, will have to pay R s 13.20 billion more after the latest decision.
Director Subedi revealed additional Rs 4 billion has already been demanded after Rs 36 billion allocated for all kinds of social security allowance for this year proved insufficient. This means the total burden of social security allowance will now rise to Rs 53 billion from Rs 40 billion.