Mon, Jan 01, 2018 - Page 6 News List

The aging population needs to be planned for

By Sophie Tsou 鄒筱涵

According to DATA from the Ministry of the Interior, as of October last year, people aged 65 and over accounted for 13.7 percent of Taiwan’s total population, and the nation is expected to become an aged society this year as the figure exceeds 14 percent.

Although this is lower than in neighboring Japan, it is estimated that one-third of the nation’s population will be elderly by 2046, due to a serious decline in the birthrate. This would cause a variety of elderly care problems and the government would inevitably face financial strain as a result of falling tax revenue and increasing social welfare expenditures.

This problem is not limited to Taiwan. In 1992, the UN noticed that the global population was steadily becoming more aged and called on all nations to deal with the issue. There has been little chance for Taiwan to participate in international affairs after its removal from the UN and the government has failed to squarely face the issue.

Fortunately, Taiwan will not become a hyper-aged society — meaning that 20 percent of the population is 65 and above — until 2026, giving it a nine-year adjustment period. The government must seize the opportunity provided by this transitional period.

Since the nation’s financial resources are limited, Taiwanese must start building mechanisms to relieve the financial burden an aged society will create. There are a few possible options.

First, Taiwan should increase the contribution rates for its pension programs. According to the spirit of the International Covenant on Civil and Political Rights, and the International Covenant on Economic, Social and Cultural Rights, a signatory state should pass legislation making it compulsory for its population to join an elderly pension program at a certain age.

Although Taiwan already has labor, civil servant and national pension programs, these programs will be paying out more than they receive in a few years due to low contribution rates.

The legislature should face the issue head-on and raise contribution rates. It should not protect early payers’ rights to receive a pension, while people who have started to pay in later receive nothing as that would neglect the rights of the majority.

Second, it should combine trusts with elderly care. The government is promoting a “house-for-pension” policy that is mostly handled by banks through their credit businesses. However, it is generally difficult for elderly Taiwanese to accept that the ownership of their property will be transferred to a bank.

However, by combining the use of trusts with elderly care at nursing homes, senior citizens who own real estate could have their houses registered in a real-estate trust and transfer the profits of the trust to their nursing homes to pay for their care. By doing so, they could keep their home while receiving proper care.

Third, the government should develop elderly finance systems to free senior citizens from the threat of fraud. Apart from their real estate, they could also have their savings registered in a trust, so that they could engage in inheritance planning for tax-saving purposes and protect their fortune from being taken by fraudulent organizations.

Fourth, the government should view e-commerce for the elderly as a business opportunity. New e-businesses for shopping, cleaning and outings services could be created.

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