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The most dramatic ageing worldwide is projected to take place in low and middle-income countries. Traditional family-based care for the elderly has broken down in many developing countries without adequate formal mechanisms to take its place. For the elderly, inadequate transfers from either formal pension systems or from informal family and community transfers can severely reduce their ability to cope with illness or poor nutrition.

Old-age social pensions provide an alternative source of income for elderly adults who are not covered by contributory schemes. Social pensions cover close to 35 percent of the population ages 60 years and older in OECD countries and in the Europe and Central Asia, East Asia and Pacific, Latin America and the Caribbean, and South Asia regions.

Old-age social pensions are introduced on the basis of an economy’s needs and capacity, in particular to alleviate poverty, establish the main component of a pension system, or address a coverage gap in an existing pension system. The elderly in the poorest quintile have benefited the most from old-age social pensions, no matter the program design.

Last Updated: Mar 28, 2019

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