Paraguay’s senior citizens are the most abandoned in the region, according to IDB

The pension coverage of the population over 65 years old is less than 60% in Paraguay, the lowest in South America and lower than the average of 68.8% in Latin America.

The IDB released these numbers at a time when the Executive Branch boasts of increasing social spending.

According to the Inter-American Development Bank (IDB) report entitled “Aging in Latin America and the Caribbean”, there has been a significant improvement in the quality of life of older people in recent decades.

However, challenges persist, mainly in the area of social protection systems.

As people grow older, pensions become the primary source of income.

To ensure income security, it is crucial to develop systems that offer high coverage and an adequate pension amount.

In this regard, the document points out that in Paraguay, pension coverage for the elderly – 65 years and older – is below the average for Latin America, which is 68.8%.

In this sense, our country does not even reach 60%.

Paraguay thus has the lowest pension coverage in South America, while Peru and Colombia have slightly higher incidences.

Bolivia is the best positioned, with coverage close to 100%, and Brazil, Chile, and Uruguay hover around 90%

Of this total, contributory pensions are at 20%, while non-contributory pensions are below 40%.

However, the Government boasts that at the end of the first quarter of this year, the execution of social services was G.6.9 trillion (US$968,342), representing an increase of 14.4% in the same period of 2022, but is still below the region.

According to the report of the General Budget Directorate (DGP), 62% was allocated to the payment of food pensions for older people.

LABOR FORCE

On the other hand, the IDB report shows that of the total Paraguayan population between 65 and 79 years of age, 47.6% still participate in the labor force, while the age group of 80 years and older participate in 10.4%.

It is worth noting that the average participation rate of older persons (65-79 years of age) in Latin America is 35.8%.

In comparison, among persons 80 years of age and older, the average is 10.9% in the region.

This places Paraguay in third place among the countries with more older people actively working, behind Peru, which has 57.4% of people aged 65 and overworking, and Bolivia, with 55% of older people still working.

In its report, the IDB also points out that, on average, pensions represent 42% of the value of salaries, with large variations among countries.

Among the highest values are Paraguay, El Salvador, Colombia, Uruguay, and Brazil, where pensions represent more than 50% of the average salary.

In Latin America and the Caribbean, 14.4% of people over 65 depend on care someone else provides.

This means that, in 2020, almost 8 million older adults will require assistance to perform at least one basic activity of daily living.

Paraguay has one of the lowest rates of functional dependency among the elderly aged 65 and older, with only 6% of all older adults being dependent, the second lowest rate in the world, after El Salvador, with 5.3%.

HEALTH COVERAGE

Publicly funded health and long-term care services are important components of income security for older people because they reduce out-of-pocket expenses, mitigating pressure on pension systems.

The multilateral agency notes that out-of-pocket expenses for health and long-term care represent a significant portion of the income of older people (especially people with low incomes) and, in some cases, can reach catastrophic proportions, increasing the risk of impoverishment.

The report also notes that in Paraguay, for example, the average annual out-of-pocket health expenditures of elderly households are equivalent to 19 days’ worth of food consumption.

For these reasons, the IDB argues that it is more efficient to develop good health and long-term care systems than to provide all potential users with a pension high enough to cover the costs of services should they need them.

With information from Marketdata