IN a region where labour informality and social inequality often limit access to contributory pension schemes, Guyana’s non-contributory pension system stands out as a model of inclusivity and financial security.

According to the latest report on non-contributory pension systems by the Economic Commission for Latin America and the Caribbean (ECLAC), Guyana’s Old Age Pension (Universal) system not only provides comprehensive coverage, but also sets a benchmark for other Caribbean nations, in terms of spending and effectiveness.

Guyana’s Old Age Pension (Universal), which was established in 1994, is highlighted in the ECLAC report as a key example of how non-contributory pensions could evolve towards near-universal coverage.
This pension system was one of the earliest in the region to provide a regular income to older persons, regardless of their previous employment status.

UNIVERSAL COVERAGE AND HIGH EXPENDITURE
Over the years, this system has played a crucial role in reducing poverty among the elderly, particularly those who have not been able to contribute to traditional pension schemes due to informal or unstable employment.
As of 2021, Guyana has achieved what many nations in the region still strive for: Universal coverage of its non-contributory pension system.
The Old Age Pension (Universal) provides financial support to all persons aged 65 and older, regardless of their employment history.

The report highlights that Guyana is one of the few countries in the Caribbean where the coverage rate for non-contributory pensions is 100 per cent, ensuring that every elderly citizen receives the support they need.
This commitment is reflected in the country’s spending on non-contributory pensions.

The report notes that Guyana allocates over one per cent of its GDP to these pensions, a figure that sets it apart from many other Caribbean countries, where spending on such programmes remains minimal.
Alongside Trinidad and Tobago, Guyana is recognised for its significant investment in the financial well-being of its older population.
As of 2023, the report indicates that non-contributory pensions in Guyana have become a cornerstone of the country’s social protection framework.
The coverage provided by these pensions has helped to significantly lower the poverty rate among older persons.

This is especially important in a country where labour informality remains a challenge, limiting the access of many workers to contributory pension systems.

IMPACT ON POVERTY REDUCTION AND GENDER EQUALITY
The ECLAC report notes that the impact of Guyana’s non-contributory pension system extends beyond poverty reduction.
The system has also been instrumental in addressing gender inequalities. Given that women are often overrepresented in the informal sector and are less likely to have access to contributory pensions, the Old Age Pension (Universal) has provided a critical safety net for older women.
This has helped to reduce the gender gap in income security during old age.

Moreover, the report highlighted that the sufficiency of the pension amount, coupled with its wide coverage, has allowed many older persons in Guyana to live above the poverty line.
Despite these successes, the ECLAC report identifies several challenges that need to be addressed to ensure the long-term sustainability of Guyana’s non-contributory pension system.
The report suggests that Guyana’s experience offers valuable lessons for other countries in the region.

It highlights the importance of strong institutional frameworks and the political will to prioritise social investment in non-contributory pension systems.
As Guyana continues to develop its social protection policies, the focus will likely need to shift towards ensuring that the system can accommodate the growing number of elderly citizens, while maintaining the financial health of the programme.
Guyana’s non-contributory pension system is a powerful example of how targeted social protection measures can alleviate poverty and reduce inequalities in the region.

In just four years, the Irfaan Ali-led current administration has been putting measures in place to improve the lives of elders. One such measure is the old-age pension, which was increased to $36,000 this year, and is expected to rise to $41,000 next year.
In addition to these increases, in 2021, a one-off grant of $25,000 was paid to pensioners, providing them with an additional $1.6 billion back into their hands, and they were also given an additional $28,000 one-off cash grant in 2022.
Moreover, in 2023, pensioners across the country received a $25,000 bonus, which benefitted over 72,000 pensioners at a cost of $1.8 billion.

The payouts are among a number of measures that the government has been implementing since 2020 to improve the lives of pensioners across the country.
Aside from direct cash transfers, other measures that senior citizens have benefitted from, include the reintroduction of water subsidy which has benefitted over 27,000 pensioners and provided them with additional disposable income of $200 million per annum.
The government has also made it easier for pensioners to access their monthly pension through alternative payment methods such as direct bank payments, as well as direct payment to shut-in pensioners including persons living with disabilities and persons who do not have access to a post office.