Population Ageing and the Well-Being of Older Persons in Thailand ...

Section 6: Policy and Programme Responses
million employees. Members will receive tax exempt
lump-sum payments at the time of their resignation
or retirement (Krongkaew 2007). The RMF was
established in 2001 by Securities and Exchange
Commission licensed mutual fund management
companies. To encourage private savings for
retirement, the government provides tax benefits for
the investment in the RMF of up to 300,000 Baht
per year. However, investors must invest at least once
a year for five years with at least three per cent of
earnings or 5,000 Baht which ever is lower and are
not allowed to withdraw funds before reaching the
retirement age of 55 without tax penalty.
Given that two thirds of the labour force, who are
mostly farmers and own account workers, do not have
any old age financial security and the weaknesses of
the existing pension systems, the Thai government is
in the process of developing the so called National
Pension Fund (NPF) to cover the majority of the Thais
(Krongkaew 2007).
6.4 Welfare allowances and tax breaks
Allowances. In 1993 the Department of Public
Welfare initiated a programme to provide monthly
subsistence allowances for indigent persons age 60 an
over in rural areas. The programme has since expanded
and the allowances have increased from 200 to 500
Baht. At the start of the programme, about 20,000
elderly received the monthly allowance. According
to official statistics, the number who received the
monthly allowance increased steadily to 440,000 in
2003 and then more sharply 1.8 million in 2007. The
latter figure would account for almost one-third of
Thai elderly which is somewhat above the 24 per cent
who reported receipt of allowances in the 2007
Survey of Older Persons (as discussed in Section 3).
The substantial increase in the number of recipients
is in part due to the rapid growth of the elderly
population. Even more important, however, has been
a shift towards a more populist policy that relaxed the
criteria for eligibility. This has been facilitated by the
supplementation of central government funds by the
local organizations administering the programme,
some of whom have broadened eligibility criteria
considerably and a few even aim for near universal
coverage.
Tax breaks. As specified in the 2nd National Plan for
Older Persons, the government has implemented
measures to promote and facilitate children to
provide care support for their elderly parents through
tax incentives. Starting in 2004, adults who care or
support their parents or parents in-law are entitled to
the income tax deduction of up to 30,000 Baht for
each elderly parent under their care and support
(National Commission of the Elderly 2005). Health
insurance policies bought by children for their elderly
parents or parents in-laws are also tax deductable. Also,
persons aged 65 years and over have an income tax
exemption of 190,000 Baht and, to encourage
retirement savings, for persons aged 55 years or older,
interest of less than 30,000 Baht from saving accounts
is tax exempt (National Commission of the Elderly
2006).
6.5 Health programmes and free services
for elderly
A free medical care programme for disadvantaged
elderly was initiated in 1989 and extended to cover
all elderly in 1992. Under this programme, all
government hospitals and health centres provide free
medical services to persons aged 60 and over who
registered for an ‘elderly card’. It operated on a
referral system from lower level to higher level health
facilities. Free care for older persons continued after
universal minimal cost government health was
introduced in 2001. In 2007, free universal
government health care was established for all Thais
regardless of age.
Civil servants and state enterprise employees and their
dependents including their parents have been entitled
to health insurance for a long time that is superior to
programmes for the general public. Older persons
benefit as parents or spouses of these employees. Also,
in some cases benefits continue after retirement from
the civil service. The benefits do not depend on a
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