The Alliance For Change (AFC) calls on the Minister of Human Services Priya Manickchand to post on the web the names and addresses of the 44,000 pensioners said to be in her Ministry’s Old Age Pension database to allow citizens to scrutinise the list with a view to ascertaining its accuracy. It is only through this exercise that the issue of phantom pensioners could be properly resolved, unlike the charade displayed by the Minister when she took a few hard copies of the database into the Parliamentary Chambers and invited members to peruse them for a brief moment.
Government’s Propaganda Machinery Gone into Overdrive
Something stinks to high heaven about the Old Age Pension Scheme if Minister Priya Manickchand considered it necessary to cast aside appropriate parliamentary conduct when she responded to my analysis of the scheme. Why else would the Guyana Government consider it necessary to put its propaganda machinery into overdrive to distort and misrepresent what I said on the matter in the National Assembly? This is what I said – based on an analysis I did of the Scheme, it would appear as if some 17,000 phantom pensioners are in the system; and concluded that if these were removed from the Pension database, the monthly sum now being paid to pensioners could virtually be doubled for legitimate pensioners.
Explanation of the Old Age Pension Analysis
Some months ago I requested and received from Minister Manickchand the number of persons who were in receipt of Old Age Pension for the period 2002-2009. In answer to this parliamentary question, she supplied the information to the National Assembly. One significant observation noted in the data she supplied was that the rate of change in the number of persons receiving Old Age Pension revealed a rather peculiar phenomenon. Over the period 2002 to 2006, the number of pensioners was virtually static (33,000 to 34,000 individuals). However, between 2007 and 2009 the numbers increased by an alarming 30% approximately. The situation is further complicated as a result of revelations that came out from the Performance/Value for Money Audit undertaken by the Auditor General for the period January 2008 to 30 September 2009. It is important to note that the Population census figures for Guyana compiled in 2002 shows that the population of individuals 65 and over was 32,030 which was less than the number of persons in receipt of pensions during that year (33,325).
Auditor General’s Observation & Qualifying Criteria for Old Age Pension
While a number of serious deficiencies were discovered by the Auditor General and appropriate recommendations made to improve the system, it is noteworthy that the audit also determined that approximately 24 percent of persons 65 years and older were not recorded in the Ministry’s database and were, therefore, not in receipt of Old Age Pensions. This is understandable bearing in mind that the criteria for the receipt of an Old Age Pension include that the person must be 65 years or older; must be a citizen of Guyana for at least 10 years; and they must have been RESIDENT in Guyana for 20 years prior to applying for this facility. It is reasonable to expect that ALL individuals in Guyana in this age group will not meet these criteria.
The implications of these revelations are two fold:- one; an increase in the population of Old Age Pensioners by approx 30% over a three year period implies that the life expectancy in Guyana has increased by a corresponding percentage over the same period. Therefore, assuming the life expectancy in Guyana was 70 years in 2006, this would now have improved by some 21 years to 91years, which is most unlikely.
Alternately, it would also mean that the population of Guyana would have increased by a similar percentage – both scenarios being unlikely bearing in mind the country’s high emigration rate. The fact that only 76% of persons 65 years and older are in receipt of Old Age Pensions also indicates that in 2002 the pensions of approximately 8,000 persons of the 32,030 identified by the Census in that age group, were being diverted elsewhere, and this number has increased exponentially since 2006.
The financial ramifications of this are extremely troubling. It indicates a monthly difference of over 68 million dollars in 2009 and an annual difference in excess of 824 million dollars that appears to have been diverted from the system.
Given these facts, the number of ‘phantom’ pensioners would have increased by 2010 to 17,640 (44,000 – 26,360). The monthly haemorrhage from the fund would therefore be over $116 million or $1.3 billion annually which, if made available to bone fide pensioners would increase their stipend of $7,500 in 2011 almost two-fold. Could this be evidence of corruption? It is necessary to state that had the Auditor General in his review of the Old Age Pension Programme taken into consideration the census figures rather than rely solely on the figures presented by the Ministry of Labour, Human Services and Social Security, this situation would have been properly investigated and old age pensioners would have been able to receive thousands of dollars more than they are now receiving.
An investigation into possible deficiencies in the Old Age Pension arrangements in Guyana
The Old Age Pension Programme in Guyana dates back to 1944 when the Old Age Pension Act was enacted. The programme is administered by the Ministry of Labour, Human Services and Social Security and provides financial support and other benefits to Guyanese senior citizens based on eligibility criteria which qualify them for receipt of a monthly pension. The eligibility criteria include inter alia:
- The person must have attained the age of sixty-five (65) years.
- The person must have been a citizen of Guyana for at least ten (10) years, and
- The person must have been ordinarily resident in Guyana during twenty (20) years immediately preceding the claim for pension.
According to the Guyana Population and Housing Census 2002, the number of individuals 65 years and over was 32,030 and had risen proportionately from 3.9 percent of the population in 1980 to 4.3 percent in 2002. However, the number of individuals in receipt of Old Age Pensions over the period January 2002 to September 2009 according to the data provided by the Ministry of Labour, Human Services and Social Security, is shown in the following table:
| TABLE 1: Old Age Pension information for the period January 2002 – September 2009 | |||||||||
| YEAR | No. of PENSIONERS | RATES PER MONTH | TOTAL EXPENDITURE | ||||||
| $ | ANNUALLY $’000 | ||||||||
| 2002 | 33,425 | 1,728 | 654,884 | ||||||
| 2003 | 34,485 | 1,820 | 753,152 | ||||||
| 2004 | 33,107 | 1,910 | 758,812 | ||||||
| 2005 | 33,492 | 2,005 | 805,818 | ||||||
| 2006 | 33,438 | 3,500 | 1,414,396 | ||||||
| 2007 | 36,813 | 3,675 | 1,623,453 | ||||||
| 2008 | 40,389 | 6,000 | 2,908,008 | ||||||
| 2009 | 43,398 | 6,300 | 2,419,162 | ||||||
| 2010 | 44,000* | 6,600 | 3,484,800* | ||||||
*Estimated | |||||||||
| TABLE 2: Population of persons 65 years and over according to the Guyana Population Census | |||||||||
| YEAR | TOTAL POPULATION | % change | AGE GROUP 65+ YEARS | % change | |||||
| Nos. | Nos. | ||||||||
| 1980 | 759,567 | 29,684 | |||||||
| 1991 | 723,676 | -4.7 | 29,402 | -1 | |||||
| 2002 | 751,223 | 3.8 | 32,030 | 8.9 | |||||
An analysis of the rate of change in the number of persons in receipt of Old Age Pensions over the period reveals a rather peculiar phenomenon. Over the period 2002 to 2006, the numbers were virtually static (33,000 to 34,000 individuals). However, between 2007 and 2009 the numbers increased by approximately 30% as shown in the following table (3):
| TABLE 3: An analysis of the change in persons receiving Old Age Pensions 2002 – 2010 | ||||
| [Increase/decrease in numbers vis-à-vis the total population of eligible persons over 65 ] | ||||
| YEAR | No. of PENSIONERS | INCREASE/DECREASE | %CHANGE | % CHANGE |
| from 2002 | ||||
| 2002 | 33,425 | |||
| 2003 | 34,485 | 1,060 | 3% | 3.2% |
| 2004 | 33,107 | (1,378) | -4% | -1.0% |
| 2005 | 33,492 | 385 | 1% | 0.2% |
| 2006 | 33,438 | (54) | 0% | 0.0% |
| 2007 | 36,813 | 3,375 | 10% | 10.1% |
| 2008 | 40,389 | 3,576 | 10% | 20.8% |
| 2009 | 43,398 | 3,009 | 7% | 29.8% |
The situation is further complicated as a result of revelations emanating from a Performance/Value for Money Audit undertaken by the Auditor General of Guyana for the period January 2008 to 30 September 2009. While a number of serious deficiencies were discovered and appropriate recommendations made to improve the system, it is noteworthy that the audit also determined that approximately 24 percent of persons 65 years and older were not recorded in the Ministry’s database and were, therefore, not in receipt of Old Age Pensions.
The implications of these revelations are twofold:-
- An increase in the population of Old Age Pensioners by approximately 30% over a three year period implies that the life expectancy in Guyana has improved (increased) by a corresponding percentage over the same period. Therefore, assuming a life expectancy in Guyana of 70 years in 2006, this would now have improved by some 21 years to 91, which is probably among the highest in the world. Alternatively, the population of Guyana would have increased by a similar percentage both scenarios being unlikely bearing in mind the country’s high emigration rate.
- The fact that only 76% of persons 65 years and older are in receipt of Old Age Pensions also indicates that in 2002 the pensions of approximately 8,000 persons of the 32,030 identified by Census in that age group were being diverted elsewhere, and this number has increased exponentially since 2006. This is illustrated in Table 4 along with the financial ramifications thereto appertaining. This indicates a monthly difference of over 68 million dollars and an annual difference in excess of 824 million dollars that appear to have been diverted from the system.
| Table 4: An analysis of the number of persons who SHOULD be receiving Old Age Pensions according to the Auditor General’s REVIEW OF THE OLD AGE PENSION PROGRAMME IN GUYANA (76% of population over age 65) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assuming an annual growth in the population of persons over 65 in keeping with growth trends over the previous 11 years prior to 2002, the number of persons eligible for Old Age Pensions would more likely be as follows over the period 2002 through 2010. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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*Estimated
In this scenario the number of ‘phantom’ pensioners increases to 17,640 (44,000 – 26,360) and the monthly hemorrhage from the Old Age Pension fund is over $116 million or $1.3 billion annually.
It is apt to observe that had the Auditor General in his review of the Old Age Pension Programme in Guyana took into consideration the census figures and not rely solely on the figures presented by the Ministry of Labour, Human Services and Social Security, this situation would have been properly investigated.