Tag: Old age pension

MPs debate raising state disability benefits

Parliament began preliminary debate today on an amendment submitted by Adhaalath Party MP Anara Naeem to the Disabilities Act to raise the monthly allowance provided by the state to persons with special needs from MVR2,000 (US$150) to MVR5,000 (US$324).

Presenting the legislation to the Majlis floor, the MP for Makunudhoo said persons with special needs deserved the same “care and protection” provided by the state to the elderly, referring to the current administration raising old age pensions to MVR5,000 a month in March this year.

Anara suggested that MVR2,000 a month was not sufficient to cover the expenses of children with special needs, who require special care and attention.

“I believe it is very important in the Maldives to determine allowances to the neediest in an equal manner. That is because sometimes a person’s means are not considered when subsidies are given [and] we see subsidies given to rich or well-off people,” she said.

Anara also referred to Article 35(b) of the constitution, which states, “Elderly and disadvantaged persons are entitled to protection and special assistance from the family, the community and the state.”

In some cases, she continued, if medical treatment is provided to children with special needs at infancy, they could “grow up as normal children.”

However, specialised services for children with special needs – such as speech therapy and physiotherapy – were not available in the Maldives, she added, while parents sent children to the special needs school in the capital “only to fill time.”

Debate

While all MPs who spoke in the ensuing debate supported the amendment, Jumhooree Party MP Ilham Ahmed suggested that the government could dismiss a few deputy ministers and coordinators – who he claimed earn MVR35,000 (US$2,269) a month – and use the savings to send specialised teachers to islands.

Progressive Party of Maldives MP Ali Arif noted that there were 5,100 persons in the national registry on persons with special needs, concurring that the monthly allowance should be raised to help parents of children with special needs as they were often forced to stay home to care for the child.

Opposition Maldivian Democratic Party MP Abdul Ghafoor Moosa argued that persons with special needs as well as single parents should receive the same monthly allowance as the elderly.

Ghafoor also urged the government to consider introducing unemployment benefits and a minimum wage, which he suggested should not be lower than state benefits.

In May, hundreds of people gave testimony to the Human Rights Commission of the Maldives’ (HRCM) ‘National Inquiry on Access to Education for Children with Disabilities’.

Parents spoke of the state’s failure to provide medical services and education to children with special needs whilst private services were costly. A single diagnostic assessment costs MVR5,000 and an hour of therapy costs MVR500, neither of which are covered by the ‘Aasandha’ health care scheme.

According to the HRCM, statistics from 2009 indicate that, out of 2250 children with disabilities, only 230 were attending schools at the time.

Citing a 2010 report by the HRCM and the UNDP, the US State Department’s 2013 Human Rights Report on the Maldives noted that “most schools accepted only children with very limited to moderate disabilities and not those with more serious disabilities.”

“Children with disabilities had virtually no access or transition to secondary-level education. Only three psychiatrists, two of them foreign, worked in the country, and they primarily worked on drug rehabilitation. No mental health care was available in Malé. There also was a lack of quality residential care,” the report stated.

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Bill proposed to raise disability benefits to MVR5,000 a month

MP Ibrahim Muttalib has submitted an amendment to the Disabilities Act to raise the monthly allowance provided to persons with special needs from MVR2,000 (US$150) to MVR5,000 (US$324).

The MP for Fares-Maathoda – who failed to win re-election in last month’s polls – stated in the draft legislation (Dhivehi) that its purpose was to provide financial assistance to families with persons with special needs to seek medical treatment overseas.

While treatment for disabled persons was covered in the government’s ‘Aasandha’ health insurance scheme, Muttalib stated that securing Aasandha in hospitals abroad was difficult for families.

The first reading of the bill took place at today’s sitting of parliament, after which the amendments will be tabled for a preliminary debate.

The Disabilities Act (Dhivehi) was passed in July 2010 to provide financial assistance and protect the rights of persons with special needs whilst a national registry was compiled in 2011 with more than 4,000 active members.

Citing a 2010 report by the Human Rights Commission of Maldives and the UNDP, the US State Department’s 2013 Human Rights Report on the Maldives noted that “most schools accepted only children with very limited to moderate disabilities and not those with more serious disabilities.”

“Children with disabilities had virtually no access or transition to secondary-level education. Only three psychiatrists, two of them foreign, worked in the country, and they primarily worked on drug rehabilitation. No mental health care was available in Male. There also was a lack of quality residential care,” the report stated.

State benefits

Meanwhile, in March, the government raised the old age pensions from MVR2,300 to MVR5,000 a month to fulfil a campaign pledge by President Abdulla Yameen and the ruling Progressive Party of Maldives.

While the government insists that enough funds to provide the increased benefits could be generated by investing in pension funds and financial instruments, critics have argued that, with a MVR1.3 billion (US$84.3 million) deficit budget, the move will plunge the country further into debt.

“These are loans, and taking loans is acceptable to invest in to increasing productivity. But this is not such an investment, this is something the government is spending. Eventually people will have to bear the burden of this,” former Economic Development Minister Mahmud Razee told Minivan News last month.

A World Bank report at the end of 2013 urged the government to reduce spending in order reduce the “unsustainable” public debt which currently stands at 81 percent of GDP, and could rise to 96 percent by 2015.

“Maldives is spending beyond its means and financing the budget risks affecting the real economy,” the report said.

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Government pension plans reliant on MVR1 billion investment return

The cabinet’s economic committee has announced President Abdulla Yameen will hand out the promised MVR5000 (US$ 324) to an estimated 17,000 pensioners starting in March.

Tourism Minister Ahmed Adeeb told the media during a press conference this afternoon: “I announce the happy news that the elderly will receive MVR5000 instead of MVR2000 at the end of this month.”

The government had allocated MVR470 million (US$ 30.5 million) in the state budget to give out an MVR2,300 (US$ 149) in cash handouts to individuals over the age of 65. These funds will now be invested in the retirement pension fund or in financial instruments such as T-bills to generate the monthly MVR5000 stipend, Adeeb said.

The government will need to generate an ambitious MVR1 billion (US$64.9 million) from investments this year to sustain the venture.

Although the government has not yet begun investments to generate the additional income for pensions, it will begin disbursing MVR5000 at the end of February as it is “certain” the required funds can be generated through future investments.

In the meantime, money will be redirected from within existing budgetary resources using “innovative methods” to pay out the pension this month, Minister of Fisheries and Agriculture Mohamed Shainee told Minivan News.

“This will not require additional expenditure from the budget. This will be done through investments made outside of the budget,” Adeeb told the press today.

“When we invest in the pension fund, this allowance will be given out without any breaks in the next five years. Even in the worst-case scenario, we will be able to generate that money. We can do this without any issues,” he said.

The cabinet’s economic committee is to meet tomorrow to discuss the most viable method of investment, Shainee told Minivan News.

Former President Mohamed Nasheed introduced the old age pension in 2008, while President Yameen pledged to increase the pension during last year’s presidential election campaign. On assuming office, Yameen said the government would not give cash handouts, but would provide the promised money through an insurance scheme.

The People’s Majlis subsequently passed a record MVR17.95 billion (US$ 1.6 billion) budget for 2014 with a deficit of MVR1.3 billion (US$84.3 million).

The deficit is expected to grow after the People’s Majlis failed to approve revenue-raising measures as proposed by the Ministry of Finance and Treasury.

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Government reneges on cash handouts for pensions, offers insurance scheme instead

The government will provide the previously pledged old-age pension of MVR5000 per month (US$325) through an insurance scheme rather than in cash handouts, Finance Minister Abdulla Jihad has told the People’s Majlis Budget Committee.

However, individuals over 65 will continue to receive the current monthly pension of MVR2300 ($149) next year, a Finance Ministry official told Minivan News.

In addition to raising the pension from MVR2300 to MVR5000, President Abdulla Yameen had made last minute promises including “unlimited” health care under the state’s health insurance scheme Aasandha, designating a general practitioner to each family, creating 94,000 new jobs, providing MVR10,000 (US$650) for fishermen regardless of fish yield, and MVR8000 (US$518) for farmers.

Speaking at a Budget Committee meeting, Jihad said: “I do not think the current budget includes elderly benefits. The president has decided to do that through an insurance mechanism.”

In November, Fisheries Minister Dr Mohamed Shainee said the government will not be handing out cash to fishermen, but would introduce an insurance scheme whereby fishermen will be asked to pay a monthly premium of MVR500 (US$ 32) during the fishing season to gain MVR10,000 (US$ 650) during the off-season.

“There is a lot of support for the policy from fishermen. This will incentivise the fishermen. They catch more than MVR10,000 on good fishing days. But if the weather is bad or if the catch is low, there is a degree of despair. We are providing an incentive to overcome this despair to get ready for the next fishing season,” Shainee told local media.

The government will need to start a roster of fishermen, and divert funds from the MVR100 million (US$6.5 million) fuel subsidy to set up the insurance scheme, he added.

The insurance scheme offers come amidst a looming financial crisis. The World Bank has warned the country’s economy is at risk due excessive state expenditure. Further, the government is pursuing untenable financing measures that pose “macro-risks” including possible devaluation of the rufiyaa, the World Bank said.

At present, public debt stands at an “unsustainable” 81 percent of GDP, but is projected to reach 96 percent by 2015, the World Bank said.

Despite promising to curb state expenditure on assuming office, Yameen has only made modest cuts such as halving the presidential salary and reducing the salaries of state and deputy ministers.

Further, the government on Tuesday proposed a record MVR 17.5 billion (US$ 1.1 billion) budget with a projected deficit of 2.2 percent. Over 70 percent of the budget accounts for recurrent expenditure.

Of the MVR 17.5 billion, only MVR 500 million (US$ 32 million) will be spent on new development projects while MVR 400 million (US$ 26 million) will be spent on fulfilling Yameen’s presidential pledges, Jihad told the budget committee.

The government plans to plug the deficit by borrowing from commercial banks. The government has proposed obtaining a US$25 million from the State Bank of India to finance the projected deficit of MVR886,622,881 (US$ 57,201,476).

The parliament’s Finance Committee last week recommended the Majlis approve a US$29.4 million loan from the Bank of Ceylon for budget support for the current year.

The loan which carries a grace period of one year is to be paid back in monthly installments of US$ 490,000 at an interest rate of 8 percent.

Quoting the saying “beggars cannot be choosers,” Jihad said the Maldives has no choice but to borrow from commercial banks at high interest rates.

“We could go to Bank of New York, but they will not lend to us. The best bet now is Bank of Ceylon,” he said.

“The risk factor is high in the Maldives so some parties are increasing the interest rates. So if we have political stability in the Maldives, it is possible [the interest rate] may decrease. It will not happen all of a sudden but it will get better when that risk decreases in the future,” he added.

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