Social Pensions for Poor, Elderly Inadequate

In the past nine months the target population under coverage of the Imam Khomeini Relief Committee decreased by 7% as more people were empowered under a variety of programs, but those seeking welfare far outnumbered those removed from the support list, Seyed Parviz Fattah, head of the IKRC, told a  press conference in Tehran.

Social pensions given to the 1.6 million old or disabled people under cover of the committee are also inadequate, he maintained.

“Funds allocated to the IKRC by the government determine the social pension for the poor. If that increases, the hand-out will also be substantial,” he was quoted as saying by the local press.

A social pension (also known as a non-contributory pension) is a regular cash transfer to older people.

In the last economic, social and cultural development plan (2011-2016), the social pension amount was 50% of the minimum wage for a 4-member household, Fattah said.

The monthly minimum wage for the current fiscal year that ends in March was set at $208 (8,121,640 rials) by the Supreme Labor Council - a body affiliated to the Labor Ministry which determines the minimum wage for workers.

The amount at present is 40% of the minimum wage for a 3-member household, 30% of minimum wage for a 2-member household, and for households with more than four members, an additional 10% of the minimum wage is added for every extra member.

Fattah says the government had plans to discontinue cash subsidies under the Subsidy Reform Plan to households in the top three high-income deciles (about 15 million people) in the current fiscal year and give that money to the poor under coverage of the IKRF and the State Welfare Organization (SWO).

Such a move would have unlocked 81 trillion rials (over $2.2 billion). But so far, the government has managed to remove hardly 3.5 million people from the cash subsidy list.

An estimated 77 million Iranians get the monthly 450,000 rials from the government, which prominent economic experts says is “poison for the economy” and should be cut off in its entirety sooner rather than later.

“Unfortunately, the move (to slash the cash subsidy lost) has not made any progress,” Fattah said, expressing hope that the Majlis (parliament) that  convened last  May, would enact legislation in favor of plans to help the poor under coverage of the IKRC and SWO.

  6m Disabled, Elderly

As per official figures, there are six million disabled and elderly who live in poverty. The IKRC and the SWO last July were directed to provide a framework to identify the needy within six months and present a list to the government.

Meanwhile, a bill titled ‘six million people’ was proposed recently by lawmakers recommending that under the sixth five-year economic development plan (2016-2021), “high-income deciles of the population should be removed from the list of cash subsidies and the amount allocated to the SWO and IKRF,”  said Abolfazl Abutorabi, a lawmaker.

He added that the bill will be discussed in the Majlis Integration Commission, comprising members from the parliament’s specialized commissions.

Mohammad Baqer Nobakht, head of the Management and Planning Organization (MPO) and government spokesman says, “Currently, 77 million from the 80-million population receive cash subsidies. In other words, $874.2 million (34,000 billion rials) is paid every month to 96% of the population.

Nobakht said he is not aware of the “exact number of people who have been removed from the cash subsidy list” as each month newborns are also added to the over-burdened list.

  Poverty Data

Figures released by the Statistical Center of Iran (SCI) show that during the years 2004-2013 (corresponding with the 8-year tenure from 2005 to 2013 of the former president Mahmoud Ahmadinejad), food energy intake (FEI) poverty --which is defined as consumption below standard of daily calorie intake, that is 2,300 calories per person--increased 7-fold and 8-fold in urban and rural areas.

“Since the year 2005, the number of poor people has increased by more than 10%. In 2015, around 12 million people were under cover of IKRF and SWO,” Hussein Raghfar, an economics professor at Al-Zahra University had said earlier, as reported by Sharq.

He says that 30% of the poor live in Tehran Province, and Sistan-Baluchestan is another province with a high number of needy.

The SWO and IKRC are responsible for empowerment of the underprivileged and each year, 10% of the poor under their coverage are expected to be empowered so that they can be excluded from their dole lists.

“However, the number of people in the queue to receive benefits have been always far more than those who have been empowered and removed from the list,” says Abolfazl Zolfaghari, a senior official at IKRC.