Older people in Bolivia are celebrating the introduction of a new non-contributory pension of Bs200 (about US$25) for all those over 60 years of age.

The new pension, called the Renta Dignidad, was approved by the Bolivian National Congress yesterday (28 November) and replaces the Bonosol (the current non-contributory universal pension).

Improvement on Bonosol

The new pension is an improvement on the Bonosol, a once a year payment of Bs1800 (US$220) for all people aged over 65, paid on the recipient’s birthday.

Not only is the payment an increased amount, but the age of pension recipients been also been lowered. The new payment is likely to be a more regular cash transfer (either monthly or three-monthly) and is expected to come into force from 1 January 2008.

Those already receiving a private pension will be means-tested and accordingly receive a reduced amount.

“Renta Dignidad will reduce poverty by 2%”

The new law Renta Dignidad (Social Pension for Old Age and Dignity) was introduced by President Evo Morales.

The Minister for Planning and Development, Gabriel Loza, says that the introduction of the Renta Dignidad will reduce moderate and extreme poverty by 2%, and help the Bolivian Government to achieve the Millennium Development Goals.

According to the Social and Economic Policy Unit (UDAPE) almost 60% of the population of Bolivia live in moderate poverty. The government’s National Development Plan (NDP)aims to reduce this figure to 44% by 2015.

The implementation of the Renta Dignidad will reduce this figure further to 42%. Likewise, the number of those reported to be living in extreme poverty (35% of the population) in 2005 will drop to 20% by 2015. The Renta Dignidad will make a major contribution to these ambitious aims of the Government of Bolivia. For more on the NDP visit http://www.planificacion.gov.bo/BANNER/PARA%20PAG%20WEB/pnd1.html (in Spanish).

Listening to poor older people

The new law has been based on petitions presented to the Bolivian Government by older people’s representatives. Older people got together at meetings and workshops sponsored by the Horizontes Foundation, HelpAge International’s partner in Bolivia, to set out their demands.

The first step was to reach a consensus among representatives from various organisations of older people. Discussions were held, led by ANAMBO (the National Association of Older People in Bolivia), to define a legitimate agenda for action for older Bolivians.

Older people also took part in round table discussions with specialists from other organisations and government bodies. This provided further impetus to the government to launch the new law.

Ensuring sustainability

The new universal non-contributory social pension will be financed with resources from the hydro-carbon tax. This has created problems as it will result in a reduction of national spending in other areas, such as departmental and municipal governments, who have suggested finding different sources of funding for the Renta Dignidad as it will affect their planned activities. This debate is ongoing.

HelpAge International’s regional office in Latin America is seeking to participate in further discussions to strengthen the new law to ensure that it is implemented in a sustainable and effective way.