In the period 2013 to 2060, the share of people aged 80+ in the Maltese population is expected to grow from 3.7% to 10.4%. Life expectancy for those aged 65 is projected to rise from 17.0/20.2 years to 22.2/25.4 years.
Addressing a session at the 4th Annual Convention of the European Platform against Poverty and Social Exclusion, Tim Muir, representative of the Organisation for Economic Co-operation and Development (OECD), explained the social protection gaps causing poverty risks for dependent persons. Across the EU, member states offer different protection structures for informal long term carers. In the United Kingdom and the United States, the government offers support only to the poorest of people.
Mr Muir explained that in all sectors of society one can gain security through insurance, be it health, motor, home or travel, however long term carers are offered no means of protection. Social care protection is an essential service; however its costs are unpredictable, and can be of large amounts.
The lack of protection for long term carers is the cause of other issues in society. Relatives may reduce their working hours or stop working to care for their loved ones, which will, as a result have a negative impact on labour supply and economy. Unsatisfactory or poor quality long term care can lead to a poorer quality of life.
Across the globe, women are more likely to take responsibility of elderly family members. Estimates suggest that the economic value of informal care as a percentage of the overall cost of long-term care in EU Member States ranges from 50% to 90%.
Women's pensions and old age poverty
Across the EU, about two thirds of old age pensioners are women. However, in some countries, more than a third of women have no pension. In addition, a study published in 2013, revealed a 39% gender pension gap.
Addressing the convention, Angelica Salvi Del Perio, an economist at OECD, noted that women pensioners are more likely to be poor than male pensioners. Earnings and labour force participation intensity are the two main factors that lead to this. As an average, women earn 15% less than men. Participants questioned whether the pension system treats women fairly, and whether systems could lead to poverty. Pensions are subject to long term changes. Research in Germany has showed that women at the age of 65 receive a pension that is 60% lower than that of men. Pension gaps are wider than wage gaps, with women with children are the worst off. If one had to compare each woman with her own partner, the gaps are generally wider. In the last three decades, there has been a major reform of multi-pillar pension system.
Member states systems may combine pension pillars where different principles of benefit accrual apply. However, where pension systems are dominated by schemes that only cover those in formal employment, differences in labour market will determine benefits.
Participants of the session argued that there is the need for coverage in all pension pillars, having full inclusion of women in first pillar, by removing discriminatory rules and establish uniform contribution rates. There also needs to be full inclusion of women in the second pillar, reducing the risk of voluntarism.
The Commission's White Paper on Pensions put forward recommendations to help ensure that women receive more adequate pensions through adequate minimum pensions, care credits and pension rights splitting at divorce. This gender gap can also be the result of under-representation of women in policymaking and institutional resiliency. In some member states, it is difficult to overcome the idea that pensions are earned deferred wages.
About the convention
The 4th Annual Convention of the European Platform against Poverty and Social Exclusion is focusing on innovation in cities for better outcomes through entrepreneurship and policy reforms. The convention is bringing together 700 participants from EU member states. The European Platform against Poverty and Social Exclusion is a flagship initiative of the Europe 2020 strategy for growth and jobs, launched in 2010 to help achieve the target of poverty reduction by at least 20 million people by 2020. Every year, the convention takes stock of progress made towards this goal and focuses on the structural social policy reforms to be achieved.
The current economic crisis has increased the levels of poverty. In 2013, 122.6 million people, or 24.5% of the population, in the EU were at risk of poverty or social exclusion. Even despite a decrease compared with 2012 this means about 4.8 million more than before the starting of the crisis.
Therese Bonnici is reporting from Brussels