Chapter 2: Pensions around the world.
South Africa
South Africa has a well-developed private pension system and a grant system. For a developing country, South Africa has an established social welfare system and a large proportion of social spending goes towards social grants. Sections 24 through 29 of the Bill of Rights in the South African Constitution recognise the socio-economic rights of citizens, including the right to social security. Over 17 million social grants are paid monthly. The social grants for pensioners are heavily criticised as being inadequate to the maintenance of a decent standard of living. Applicants for social grants must be South African citizens, permanent residents or refugees and currently living in South Africa.
2019: As the pension in South Africa provided by the state is a means-tested grant rather than contribution-based, you don’t have to have lived or worked in South Africa for any period of time to claim the South African pension. The SASSA Grant for Older Persons is available to South African citizens and foreigners who have gained citizenship or permanent residence status in South Africa. It is also available to those granted political leave to remain. To qualify for this South African pension, in 2019, you must have earnings of less than R 78 120 a year (or less than R 156 240 if living with a spouse) and have assets worth no more than R 1 115 400 (or no more than R 2 230 000 if living with a spouse){2}
You must:
What you should do Contact the South African Social Security Agency (SASSA) office nearest to where you live to get full details of what is required. Grants are paid by SASSA electronically, into the recipient’s bank account, by cash at the local SASSA office, or direct to the institution for those that live in care or residential accommodation. The current South African pension rates for the SASSA grant are a maximum of R1 700 per month, rising to R1 720 per month for those aged over 75.
Most South Africans use private pension funds to prepare for retirement if they can.
Britain
Pensions in the UK can be public, private, and collective, or come from individual savings.
The UK has a state pension based on the qualifying’ years of National Insurance payments a person has made. There must be at least 10 qualifying years on the National Insurance record to get any State Pension. The State Pension is around £164.35 per week. The pension is paid in arrears every 4 weeks into an account of your choice. You'll need 35 qualifying years to get the full new State Pension.
The UK has pension reciprocal agreements with:
Canada
Pensions in Canada can be public, private, and collective, or come from individual savings. The Old Age Security (OAS) program is the Government of Canada's largest pension program. It is funded out of the general tax revenues of the Government of Canada. OAS is funded out of general government revenues and individuals are not required to have contributed to receive it. It’s a non-contributory retirement pension. It is available to seniors aged 65 (this age is being raised to 67) and older, who meet the Canadian legal status and residence requirements. It is subject to a means test. The benefit is adjusted annually for inflation and depends on how long you have lived in Canada after turning age 18. Supplementary benefits under OAS include Guaranteed Income Supplement, Allowance, and Allowance for the Survivor. OAS benefits may be clawed back if your income exceeds a certain amount. For 2019, if your net income exceeds $77,580, all or part of your OAS pension is “Clawed Back”. Maximum monthly OAS benefit for January to March 2019 is $601.45.
Canada
The Canada Pension Plan (CPP) forms the basic state pension system except in Quebec. The CPP is really a defined benefit pension plan, which is not part of government assets. All persons who earn more than a minimum amount ($3,500 per year) must contribute to the Canada Pension Plan (CPP). In 2019, the CPP earnings ceiling was set at $57,400. The contribution rate on these pensionable earnings is 10.2% (9.9% for the base, or original CPP, and 0.3% for the CPP enhancement which began to be phased in on January 1, 2019), the contribution rate is split equally between the employee and employer. If you are self-employed, you pay the full 10.2%. Your contributions are based on your net business income (after expenses). Both base and enhanced contributions determine what the amount of the benefit will be. Ultimately this means when an individual reaches retirement age, his or her benefits are determined based on his or her 40 highest income-earning years. The benefit has a maximum limit. Maximum monthly CPP payment amount for 2019 is $1,154.58. The average monthly benefit is $664.41. CPP rate increases are calculated once every year using the Consumer price Index (CPI).The CPP can continue to a spouse through a CPP Survivor Pension. The surviving spouse must apply (it is not automatic) and the maximum combined CPP pension (personal CPP plus CPP survivor) cannot exceed the annual maximum benefit. Quebec, which has its own system which is very similar to the rest of Canada.
America
Social security and welfare assistance in the United States is only for those who are citizens of the country. It is based on income contributions via your taxes taken directly from the contributing person’s salary. The full retirement age is 67, although the monthly benefit will differ if a person accesses it earlier. You must be at least 61 years and 9 months old to apply for retirement benefits. There is a maximum placed on the benefit paid of $2,861 in 2019. Medicare is a preferential health insurance is paid to a pensioner with 66 years. For low-income retirees, additional Medicaid benefits apply. There are other programs such as food grants which the pensioner can apply for. Private pensions or Individual Retirement Accounts (IRA) are widely used - these will be the private savings of the person subject to certain restrictions which will affect the tax status of the fund. IRAs may only be accessed from age 59 or penalties are levied.
Europe
There are big differences in the way different EU countries have organised benefits, healthcare and other social security services.
New Zealand
Immigration Minister, Michael Woodhouse, has temporarily closed the parent category to new applicants, saying he is concerned too many migrants are not honouring their sponsorship commitments. Every year about 5500 parents of migrants come to New Zealand. About half who enter under the parent category are Chinese and around 20 percent Indian.