The Ageing Population in Mauritius

1. Discussions

   1. Impact of aging population in Mauritius

The first objective of this study aims to provide a thorough understanding of the actual impacts of aging population in Mauritius. Since old people retire from their jobs, the incomes they generate are reduced and thus they have to rely on pensions or insurances. Consequently, the aging population is very often faced with income security and poverty. Among the 80 questionnaires that were distributed, there were 18.5% of the respondents were above 65 years. This was a very significant number and was the second larger percentage after the age group of 20-35 years. Moreover, the Mauritius Statistics forecasts that 20% of the Mauritian population will be above 65 years by 2025.

One of the main impacts of an aging population is that it increases the dependency ratio. There are relatively more people claiming pension benefits and less people working to pay taxes. With the ever-growing aging population in Mauritius, it is probable that this will cause problems in the future. Though 14.8% of the respondents still live with their grand-parents and 12.3% of them still help their grand-parents financially, the dependency on the pension benefits do not seem to decrease.

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Another impact is the increased Government spending on health care and pensions. In UK, the old age pension is currently £113.10 per pensioners per week (Population Ageing Statistics, Rutherford) as compared to Mauritius, where the pension fund is Rs5, 000 per pensioners per month. Since the percentage of old age is said to increase to up to 25% by 2025, the Government spending will increase even more. Presently, the budget for old age health problems amounts to approximately Rs9.7 billion per year and with a promising and significant growth in the number of old people in the future, Mauritius is likely to face serious budget issues. As such, as demonstrated in table 4.5 in the previous chapter, 56.8% people have that working people should pay a token for the elders’ medical services. This gesture can remove a huge burden from the Government expenditure since people are not prepared to remove old age pension funds even if an alternative, such as building homes for the elderly with all their required needs, is given to the old people as shown by the majority of people who voted ‘No’ to the suggestion.

Moreover, an aging population directs to a shortage of workers in a country. Since the old people retire and live on pension, and there are lesser number of new-borns to eventually work to pay taxes, the country faces a lack of workers. Mauritius is not far behind from a shortage of workers. In this effect, 48.1% of the respondents thought that encouraging Mauritians to reproduce will solve the problem whereas 50.6% of them thought it would be better to hire immigrants to work here.

Furthermore, since Mauritius will be putting a higher percentage of income into pension funds in the future, due to the increasing amount of old people, it could reduce the amount of savings available for more productive investments. Thus, leading to lower rates of economic growth.

1. Impact of security budget on aging population

The second objective emphasizes on the impact of security budget on aging population. With greater number of old people, comes greater expenses in terms of security. As of now, the Government is spending approximately Rs27.1 billion on social security solely in the year 2015 and as per our research conducted by the questionnaire, 38.3% people feel concern about this amount of expenditure only on social security.

76.5% of the respondents agreed that the well-off should be cut off from pension facilities. This is a considerable idea because the Government is spending way too much money on old people and getting nothing-in terms of finance-in return.

Though many people (approximately 75.3% of the respondents) thought that the newly elected Government was right to increase old age pension from Rs3, 600 to R5, 000 in December 2014, a significant percentage (61.7) agreed that it was merely a political technique to gain votes. This increase in the pension fund has resulted in an increase of over 50% in the Government expenditure as compared in 2014.

Over 186, 000 people benefit from the universal pension. The National Monetary Fund (IMF) has already sounded the alarm about the aging population of Mauritius that could jeopardize the national pension fund. The financial institution recommends an urgent review of the payment of this social benefit formula.

As concluded by a Working Paper of the IMF entitled Pension Reforms in Mauritius; Fair and Fast Balancing Social Protection and Fiscal Sustainability, Mauritius’ old age pension situation is considered unsustainable in the long term. While now it amounts to 5% of the Gross Domestic Product (GDP), funding for different pension schemes should reach 11% in 45 years.

The aging population is putting strong pressure on public finances. The number of people over 60 years will be 50% in 2050, whereas they represented 13% of the population in 2013. The result of expenditures on pension benefits, especially the non-contributory pension scheme will be exacerbated (Takoor, Petri, and Martin).

If major reforms are not undertaken, the pension funds could cause a shortfall and could eventually be liability for the state especially when 79.0% of the respondents said they are not ready to further sustain the social security financially, besides their contributions in VAT and NPF.

1. Problems faced because of gender in an aging population

According to a study made by the UN organisation, women make up a significantly larger share of the older population. This is because women tend to live longer than men and thus rendering them more dependent on health care facilities and pensions schemes provided by their country. In 2014, Mundi calculated the ratio of females to males above 65 years old to be 66, 643: 45, 145 of the total population. The elderly dependency ratio was calculated to be 12.8%.

Also, the UN found that older women experience some of the lowest literacy rates in the world. Average levels of illiteracy for women aged 65 or over are as high as 78% in Africa and 53% in Asia, compared to 58% and 29% respectively for men in these regions. This seriously impacts on the lives of the older women, preventing them from accessing health services, securing incomes, and moving out of poverty.

Moreover, the fact that women’s life expectancy is greater than men’s means that health problems that increase with age, such as disability, affect a greater number of women worldwide. It is anticipated that the overall prevalence and severity of disability among older women will continue to increase, in line with the growing aging population and the higher proportion of women in the old age groups. For example, older women are more likely to suffer from blindness than older men, especially in low-income countries where 44% of cases are caused by cataracts. The greater the number of older women, the greater is the dependency on health care services.

Furthermore, despite increased awareness of abuse, discrimination, and violence against women, concerns over the situation of older women have largely been ignored. Data on violence against women over the age of 60 is severely limited and research focusing on abuse of older women tends to be confined to developed countries and based on small sample sizes.

1. Impact of sustainability on the level of protection of the old age

The challenge for the future is “to ensure that people everywhere can grow old with security and dignity and that they can continue to participate in social life as citizens with full rights”. At the same time “the rights of old people should not be incompatible with those of other groups, and reciprocal intergenerational relations should be encouraged.”(United Nations, World Population Ageing 1950-2050, Population Division)

Social protection of the old age approach has addressed the multiple interlinked global challenges of poverty eradication, environmental sustainability, and economic equity, and gender equality, equitable distribution of resources, human rights, and inequality.

In Mauritius, though about 50% of old people do not take public transport, the latter is still free for people above 60 years old. However, about 21.0% find that this system should be abolished.

Basic income security for people in old age is considered as necessary to avoid poverty among the old age. However, approximately 49.4% of Mauritians find that Rs5, 000 is a risk factor to the life of the elders. This amount of money is considered to be too much and can put the life of the elders at stake.

1. Conclusion

This chapter has discussed the various objectives of the research work together with the data that was obtained and calculated in the previous chapter, data analysis. As shown, some data obtained were in line with the objectives of this study. The next chapter will talk about the proposed recommendations.

1. Recommendations and Conclusion

1. Introduction

In this chapter we will propose a list of recommendations of how the impacts of aging population can be minimised. We will also recommend ways in which the security budget can be controlled, how gender equality and equity can be ensured, and how to ensure a sustainability in the aging population of Mauritius.

1. Housing for seniors: Elder friendly housing

Specific measures can be taken to facilitate the development of retirement housing by the private sector, in particular, varying the length of land leases to lower land costs, to facilitate elders’ needs in terms of housing. Also, through a review of the Code on Barrier-Free Accessibility, the Government can consider introducing guidelines for the provision of accessibility and safety features in the homes for the elder people so that they have a more elder-friendly environment to live in. in this way, the elders will more likely have a healthy lifestyle and thus lessening the health expenditure for the Government.

1. Stretching the workforce and working hours

The participation rates of women and elderly people in the workforce should be increased to ensure more contribution is being brought economically to Mauritius. According to the Organisation of Economic Co-operation and Development (OECD), 49% of the people aged between 60 to 64 years old in USA are still gainfully employed. There are many ways in which a higher participation of the ‘young’ seniors (aged between 60 and 65) can be achieved. Among them, the most important are to correct the inducement of early retirement, reduce the period of entitlement to unemployment benefits, and eliminate high severance payment, extensive job dismissal protection as well as seniority principles.

Also, by implementing new child-minding arrangements and more creative working time models and speeding up organisational reforms, the participation of women within the workforce can be increased.

Additionally, the annual working and/or average weekly times can also be increased such that fewer workers have to work for more hours in order to compensate for a negative demographic effect on potential growth. Thus, a higher share of women will be put in the workforce and a greater number of part-time jobs will be switched to full-time positions. It will also require an increase in collectively agreed weekly working times.

1. Migration

Immigration can help to slow down the process of aging and shrinking of the population and mitigate its negative economic consequences. The younger, more flexible and better qualified the population, the more favourable the outcome will be. Mauritius should promote migration and set suitable migration policies where the policies do not only stop at identifying suitable immigrants but also help them integrate well into the society. It is also very important for Mauritius to promote harmonious race relations-which is not very difficult, considering the fact that we are ourselves a multi-racial nation.

1. Better use of existing resources and adoption of new technologies.

We can help people to stay active, healthy and autonomous by building age-friendly cities and “smart homes” that deploy a range of monitoring and supportive devices to help older people manage life more effectively. We can re-engineer health systems to focus on disease prevention and early screening, rather than on expensive intervention. With these measures, we will contribute to creating better quality lives for older people: lives that are also inclusive and sustainable.

1. Preventing falls strategies

Given the magnitude of this public health problem, policymakers should elevate falls prevention as a priority and support policies and programs that aim to reduce risk factors among older adult populations. This may be accomplished in multiple ways. For instance, increased funding may be provided to Area Agencies on aging for broader implementation of community-based falls prevention programs. Certain falls prevention strategies, such as home safety assessments, could also be integrated into existing senior outreach services and programs, such as Meals on Wheels.

1. Enhance opportunities for physical activities among older adults

It is recommended that policymakers enhance the opportunities for physical activity among the elders. Especially, they should implement policies and targeted strategies that support active living for seniors. This involves identifying and addressing the barriers that currently prevent seniors from participating in physical activities, ramping up education and outreach efforts, and promoting community-based programs that incorporate strength, endurance, balance, flexibility training programs. Some communities for elders offer other social benefits, such as peer interaction and support. This should be put into practice by all the communities for the elderly.

Additionally, policymakers should support a broad continuum of programs, ranging from low to high intensity levels, available to people of all abilities, cultures, and ethnic backgrounds.

6.7 Additional benefits for additional years worked

Some countries offer financial incentives to workers who keep on working even though they have reached their retirement age. Normally, the incentives are calculated on the basis of contribution period, for example, an additional day, month, quarter, or year worked after the retirement age. They can come be in the form of a single bonus payment or a percentage increase in the final pension. If Mauritius were to adopt this system, it will ensure more people working and thus more people paying the taxes.

1. Encourage employers to retain and recruit older workers

The Government should encourage employers to retain and recruit older workers. One way in which this can be achieved is for the Government to directly contribute to the consts of employing older workers (Gineste, 2012).

1. Reducing unemployment benefits for older people

Reducing unemployment benefits and lowering pensions could be an incentive to work longer. If the elders have lower pensions and reduced unemployment benefits, they will be more keen to work for longer periods of time so that they achieve a more satisfying and comfortable lifestyle for the time when they are not able to work at all.

6.10 Conclusion

This research work has tried to highlight the impacts of the aging population and appraise what is being done the Ministry of Social Security, National Solidarity, and Reform Institutions to bring about a sustainable development in the aging population of Mauritius.

With the decrease in fertility and mortality rates, life expectancy at birth has increased drastically. And despite this rapid aging population, it can be said that the Government, along with the concerned institutions, are striving to keep the population an economically productive and healthy one.

To conclude we have also tried to formulate some suggestions which can be implemented in order to ensure that the aging population process stays in control and that Mauritius does not suffer or at least suffers the minimum impact of such a population.