By Yang Cheng-yu and Jason Pan / Staff reporters
People aged 65 and above have reached 18 percent of the nation’s population, the Ministry of the Interior’s (MOI) Department of Household Registration said, citing the latest data from the end of August.
MOI officials said that the figures indicated that Taiwan is currently an aged society and would in the coming years pass the threshold to become a “super-aged society,” meeting the accepted UN definition for a society at over 14 percent and over 20 percent respectively, on having age groups at 65 and over, which is 7 percent at the outset for an aging society.
Officials said that starting in 2017, and with added funding support programs in recent years, government agencies have launched a “Long-term Care Plan 2.0” (Plan 2.0) program to meet the needs of elderly groups and mitigate family caregiver burdens by setting up an affordable and accessible care system for senior citizens.
Photo: Liao Chen-huei, Taipei Times
It has resulted in a higher budget allocation and increased “running expenses” for the special state fund dedicated to supporting Plan 2.0, which has steady long-term revenue sources, although it is also vulnerable and would require more careful financial planning according to a recent Legislative Yuan Budget Center report.
The financial support for Plan 2.0 is stipulated in Article 15 of the Long-Term Care Services Act (長期照顧服務法), in which the central authority “set[s] up a special fund for providing long-term care services… augmenting long-term care service capacity, promoting the development of long-term care-related resources, improving service quality and efficiency… balancing services and human resources, and subsidizing various budgets.”
Taiwan’s national budget in 2021 included a social protection expenditure of NT$2.4121 billion (US$74.39 million at the current exchange rate), of which 98.7 percent was allocated to social benefits, with those over the age of 65 receiving 46.4 percent of the social benefits, Directorate General of Budget, Accounting and Statistics (DGBAS) data show.
Budget center officials said the central government would continue to implement policies for Plan 2.0 and “Programs to meet the needs of a super-aged society” by allocating budget funds for next year at NT$82.818 billion and NT$25.063 billion respectively.
The total spending for social benefits going toward elderly groups jumped from NT$419.8 billion in 2001 to NT$1.105 trillion in 2021, at a rate of increase of 163.22 percent during the past two decades, Budget Center data show, as related benefits included retirement pensions, living allowances for elderly people, home care services, senior care center placements, consolation money, emergency relief and social welfare benefits.
The main reasons for increasing monetary figures of elderly social benefits in recent decades is due to the launching of the “New Labor Pension System” and “National Old Age Pension Insurance” plans, which include long-term care for elderly and disbursed living allowance for low-income seniors. As society continues to age, more people are collecting retirement pensions, and there is a rising need for higher capacity and expanded coverage for elderly care services, officials said.
In the report, it said that the government had established its “Long-term Care Services Development Fund” on June 3, 2017, and initially had portions of expenditures listed under other national budget items. More spending was then needed for new requirements as more years have passed. The fund had its first allocated budget set at NT$16.279 billion, with gradual annual increases until it reached NT$82.818 billion the following year.
Under this fund, the longer-term care program, with yearly “running expenses,” would go up to NT$44.229 billion for the next year, with a rate of increase of 146.55 percent compared with 2017.
The report also pointed out that long-term care and other benefit programs for elderly people, once started, could not be cut back, as it was prone to expansion and required more services, although the main revenue under the Long-Term Care Services Act (長期照顧服務法) is derived from adjusted property taxes, increased tobacco and alcohol taxes, health and welfare surcharges from cigarette sales, gift taxes, donation income and other sources, which have long-term vulnerability.
Therefore, careful evaluation of long-term care programs is needed, suggesting implementation of financial support and funding models of other related public service programs, such as Taiwan’s National Health Insurance system, and the implementation of a comprehensive assessment and planning to generate stable revenue and scope expansion, thus sustaining the fund in the long run, as recommended by the Budget Center report.
The report also stated that last August the National Development Council (NDC) had projected that by 2070, Taiwan’s population would have a youth and adult population slightly larger than the number of elderly people aged 65 and older.
Under the NDC’s scenario, Taiwan would have a large decline in its working population and labor force, while also having a huge increase in national budget expenditures for a super-aged society at that time. Thus, the report recommended adjustments to the income tax structure and making changes to National Health Insurance and pension scheme premiums and deductions based on income levels to expand tax revenue that would ensure the long-term sustainability of the nation’s social welfare programs and elderly care services.
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