The Non-Contributory Pension programme in Argentina: Assessing the impact on poverty reduction

There is increasing acknowledgement of the need to extend the scope of social protection to those segments of the population that have traditionally been excluded from social security. Non-contributory pension programmes constitute an excellent alternative that merits examination. This report will describe and evaluate numerous aspects of the Non-Contributory Pension (NCP) programme in Argentina. The NCP programme — much like other social security programmes in this country — developed in a disorganized manner, involving the grant of various categories of benefits. These include assistance pensions for old-age, disability and mothers with seven or more children; auxiliary pensions (pensiones graciables) awarded by the national legislature; pensions for Malvinas (Falkland Islands) war veterans; pensions for families of persons who “disappeared” during the military regime (1976-83) and pensions granted through special legislation. The NCP programme developed in the context of a social policy characterized by a high degree of fragmentation between not only the national institutions (for example, the Social Security Administration and the Ministry of Social Development), but also between the various levels of government (national, provincial and municipal). The NCP programme accounts for 3 per cent of the aggregate social security expenditure and 0.2 per cent of the GDP. The number of direct beneficiaries with pensions is 350,000 persons, but if health coverage provided for the families of some beneficiaries is included, coverage may be said to extend to 450,000 persons. The average benefit is $153, which is 57 per cent of the average benefit in the contributory system. As regards the programme’s effectiveness in reducing poverty, for those families with a member who receives the benefit, the incidence of poverty is reduced by 31 per cent, while that of extreme poverty or indigence is reduced by 67 per cent. The effect would be greater if inclusion errors were reduced and if the scheme of auxiliary pensions (pensiones graciables) granted by legislators was reformed, or eliminated altogether. Furthermore, the programme must be adapted to the proposed reform of the social security system scheduled for 2002, which provides for the possibility of granting a “universal benefit” to persons over the age of 70 with no source of income or other financial resources.