A social pension in Zambia: perceptions of the cash transfer pilot in Katete

The Government of Zambia, via its Ministry of Community Development and Social Services (MCDSS), has been running a set of pilot cash transfers to test which could best form the basis of a national social protection system. The pilot being run in the Katete district transfers money to everyone over the age of 60 years, thus creating a form of social pension.

This brief outlines the perceptions of recipients, their families and the community towards the pension, and the impacts which have been observed on areas such as nutrition, health, education and the local economy. It also outlines the practical benefits and challenges of implementing the scheme.

The report concludes that the Katete pilot has provided an important learning opportunity, and two key lessons stand out from the experience:

• the model used in Katete is administratively simple and cost-effective to implement. While technical details remain, these qualities are clear merits to the age-based model in considering how to implement cash transfers at a national scale
• the scheme is popular among the community as a whole, and there is widespread support for the targeting method. This appears to be a positive response to seeing a deserving section of the population being supported. But it is also linked to the benefits which the wider community has seen through an increase in economic activity, and a decreased need to divert resources to support older people. This popularity could be an important factor in building political will for a policy of this nature at national level

Considerations for scale-up:

• rolling registration There has only been one registration period for the beneficiaries of the pilot in
  Katete. The result is that some people have turned 60 but are still not receiving the pension. Further rounds of targeting have been planned. Another option to consider in scaling up would be the implementation of rolling registration to allow individuals to register when they reach the age of 60
• the  robustness of the system of national registration cards. Compared with other countries in the
  region, Zambia has a relatively strong system of national registration cards. But implementation has revealed that some people still have cards which have inaccurate information. In the process of any scale-up, the robustness of this system and the extent of errors would need to be assessed. An appeals system would also need to be developed for those refused access to the pension
• payment mechanism One of the biggest concerns raised by pay point managers has been the security risk of having to carry large sums of money. Countries across the region have been experimenting with different ways to deliver cash to remote areas and there is a growing body of evidence on best practice. Examples include the use of secure mobile payment vehicles, local
  shops and technology such as smart cards and mobile phones
• indexing the pension level. In order to maintain its support to older people and their families, this pension would need to be regularly adjusted in line with inflation
• complaints that the MCDSS often encounters delays in releasing funds for payment to recipients and that payments have come late would be a key area to address in scale-up
• one potential criticism of the age-based model is that wealthier older people are eligible. Although
  the proportion of non-poor older people eligible for the pension is likely to be small, international experience suggests that attempts to exclude the wealthiest from a social pension may decrease political buy-in, create disincentives to contribute to other pension systems and even increase the total costs..  But there are potential methods for reducing the benefits to the better off, for example, progressively excluding those with other pensions and clawing back money through taxation