Social Pensions in Bolivia

Help Age International 

June 17, 2008

Bolivia

Doña Eulogia uses her pension to buy food, clothes for her grandchildren and schoolbooks.

In Bolivia, 59% of older people live on less than a US$1 a day.
The Bonosol, a universal social pension, was first introduced in Bolivia in 1996. It was replaced by the Renta Dignidad in January 2008.

Under the Bonosol, one annual payment of Bs1,800 (US$216.77) was available to all resident Bolivian citizens over the age of 65.

The new Renta Dignidad is a non-contributory pension of Bs200 (US$25) paid to all Bolivians over 60 years of age.

It is a vast improvement on the Bonosol. Not only is the payment an increased amount, but the age of recipients has been lowered. The new pension is paid monthly or as one annual lump sum.

Banks distribute the payments in urban areas, while the army helps with distribution in more remote rural areas of the country.

Identification documents are needed to register for the scheme. Those already receiving a private pension are means-tested and accordingly receive a reduced amount.

Cost

The Renta Dignidad is administrated by the Ministry of the Treasury. It is financed by 30% of the income sourced from the hydro-carbon tax.
Coverage

Around 489,000 people over 65 were claiming the Bonosol, according to the Department of Pensions, Insurance and Securities.

New data from the Ministry of Finance has shown that the number of claimants has risen to almost 676,000 under the Renta Dignidad scheme.

Some 562,000 of those receiving the Renta Dignidad are not retirees and without it would have no income at all. Under the new scheme, they receive Bs2,400 (US$ 326.50) a year.

Another 114,00 of those eligible are in receipt of a monthly retirement income. This is supplemented by an annual Renta Dignidad payment of Bs1,800 (US$216.77).

In spite of these improvements, however, pension coverage is still particularly low among women. This is because in general they are less well educated and often discriminated against in the labour market.

Impact

There have not been any impact studies since the introduction of the Renta Dignidad early in 2008. However, a recent survey of 50% of recipients of the Bonosol said that it was their only source of income.

The pension is mostly spent on household expenses and basic medication. While healthcare for over 60-year-olds is meant to be free of charge, medication is not covered.

A detailed breakdown of 427 older people revealed that the money was spent on the following basic items:
• 37% on food 
• 20% on healthcare 
• 10% on clothing 
• 5% on accommodation 
• 5% on utility bills 
• 23% passed directly to other family members.
The pension also provides older people with capital that they can choose to invest in income-generating activities or for younger generations. Not only does this have a financial value but also a social value, increasing their status within the family.

Helping older people get their pension

In Bolivia 16% of older people who are eligible for the Renta Dignidad do not have their identity documents, so cannot prove their eligibility. Many older people in rural communities have never had a birth certificate.

HelpAge International’s regional development centre in Latin America supports socio-legal centres in La Paz and El Alto. The centres help older people get birth certificates from the government registry office so they can receive the Renta Dignidad.

Don Albino’s story

Don Albino Vargas is 68 and lives in Tolata Cochabamba, a rural area of Bolivia. He says: "The Renta Dignidad is like manna from heaven, but it is not enough. Older people have a right to it. Even though it is a small amount, it helps when there is nothing else.”

Don Albino said that most of those who get the Renta Dignidad use it to pay for food and services.

He says that a lot of young adults have gone to the cities to look for work, leaving the children in their grandparents' care. This means that these older people have to make their annual pension payment stretch to provide for the whole family throughout the year.

Don Albino’s goal is to ensure that all older people enjoy their rights. He is working with older people to raise awareness of the benefits they are entitled to.

He says: “Above all the Renta Dignidad helps those living alone who are more vulnerable to poverty. So we must defend our right to it.”

Copyright © Global Action on Aging
Terms of Use  |  Privacy Policy  |  Contact Us