1. MITIGATING VULNERABILITIES
& PROMOTING RESILIENT GROWTH
Sequencing, cost-efficiency and fiscal-sustainability of social
protection– Policy Dialogue
Yos Vajragupta
Senior Researcher
Thailand Development Research Institute
November 1-2, 2012

2. Outline
1. Thailand’s basic data
2. Social protection in Thailand
o Social assistance
o Social insurance
o Social service
3. Social investment
4. Future challenges
5. Fiscal sustainability
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3. Thailand’s Basic data (2011)
GDP growth 0.1% (2011) and 4.2% (Q2/12)
Population 67.6 Million
GDP Per Capita $ 4,972
Dependency ratio 12.9%
Labor force 39 Million
Unemployment
rate
0.7%
Gini 0.37 (2012)
Poverty 6.3% (2012)
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4. Social Protection in Thailand
Social Protection
Social Service
Social Social
Healthcare Education
Assistance Insurance
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5. Social Assistance
• Social assistance programs in Thailand started in 1941.
• Target groups are disadvantaged people such as children, seniors,
disabled individuals, women, low-income persons, and people suffered
from natural disaster.
• Social assistance programs focus on cash transfer,
counseling, training, in-kind assistance, and
emergency accommodation.
• Cash benefits are provided to elderly, disabled person, and HIV infected
person (500 baht or $14.5 per month).
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6. Social Assistance
• Before 2009 and 2010 the cash assistance programs for elderly and
disabilities are not universal respectively. The decision for providing
benefits was decentralized and selected by local government.
• Since October 2011, elderly pension changed to graded or progressive
pension
Age range Amount
60-69 600 baht per month
70-79 700
80-89 800
90 and older 1,000
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7. Social Assistance
• Funeral allowance of 2,000 baht ($58) for senior citizen aged 60+
years.
• Monetary assistance has been low since the Ministry
of Social Development and Human Security received small budget
(less than 1% of government budget).
• Besides the cash transfer, government also provides assistance
through government-run nursing homes,
elderly care centers, care home for disabilities and disadvantage
children.
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8. Social Insurance
Pension for Government Official
• A retired government officials who started their job with government
before March 1997 can choose between receiving a lump sum
payment or a pension from the government.
• After March 1997, new government officials must be a membership of
the Government Pension Fund (GPF).
• GPF: 2nd pillar under the World Bank’s Multi-Pillar system.
• GPF member can contribute between 3 to 12 percent of salary while
government contributes only 3 percent plus another 2% for post-
reform compensations.
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9. Social Insurance
Social Security Fund (SSF)
• The SSF was setup under the Social Security Act in 1990.
• 1st pillar under the World Bank’s Multi-Pillar system.
• There are three types of insured persons: article 33, 39 (formal workers) and
40 (informal workers).
• Since 2008, the SSF provides seven types of benefits, i.e. sickness, maternity,
invalidity, unemployment, death, old-age benefits, and child allowance.
• The SSF for article 33 is financed through employer (5%)
, employee (5%), and government (2.75%) contribution. While article 39 is
contributed by employee (288 baht) and government (120 baht). Article 40 is
paid solely by employee amount 3,360 baht per year.
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10. Social Insurance
Provident Fund
• Provident Fund Act 1987.
• 3rd pillar under the World Bank’s Multi-Pillar system.
• Objectives: to encourage long-term saving for private employee
and state-enterprise employee and to provide income security for
retired employees.
• The provident fund is financed by employer and employee
contribution.
• Employee’s contribution rate must be between 3 to 15 percent of
salary and employer pays not less than employee.
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11. Social Service
Healthcare
• Three healthcare schemes are Civil Servant Medical Benefit Scheme
(CSMBS) , Universal Healthcare Coverage (UC) and Social Security
Scheme (SSS).
• The first two schemes are non-contributory while SSS are copayment
by employee, employer, and government.
• Although the government contribute to all schemes but the quality of
CSMBS is a lot better than the rest.
• Government has spent tremendous expenditure on CSMBS for
government officials and their dependants. The scheme covers about
5 million people (10%), but consumes 62 billion baht ($1.8 billion) in
2009, which was about 30% of total healthcare expenditure.
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12. Social Service
Thailand healthcare system
Scheme CSMBS UC SSS
Start 1960s 2001 1990s
Everyone does not
Target Government employee, Private sector
beneficiaries dependents and retirees covered by CSMBS nor employees
UC
Coverage 10% 74% 12%
Funding Government budget Government budget Tri-parties
Payment to health Fee-for-service Capitation Capitation
facilities
Source: Reproduced from National Health Security Office’s Presentation and Chalermpol Chamchan .
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13. Social Service
Education
• The education system in Thailand covers the kindergarten level (early
childhood education), the primary and lower-secondary level (compulsory
education), the upper-secondary level (basic education, both in general and
vocational), and the university level and above (higher education).
• On August 2009, 15 years free education policy (kindergarten to high school)
was initiated with the aim to lessen the financial burden of parents. Other
than the education fee, the policy also cover expenses for books, utensils,
uniform, school equipment, and extra-curricular activities.
• Besides free education policy, government also subsidies school lunch and
milk expenses for kindergarten to elementary school and provides loan for
poor family for upper secondary/vocational.
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14. Social Investment
1,500
1,400
1,300
Billion Baht
1,200
1,100
1,000
900
800
2010 2011 2012 2013 2014 2015 2016 2017
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15. GDP and Government Revenue
4000 18
16
3500 14
12
3000
Trillion Baht
10
Billion Baht
8
2500
6
2000 4
2
1500 0
2011 2012 2013 2014 2015 2016 2017
Government revenue GDP
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16. Social Investment
(% of GDP and Government revenue)
60% 10.5%
50% 10.0%
40% 9.5%
30% 9.0%
20% 8.5%
10% 8.0%
0% 7.5%
2011 2012 2013 2014 2015 2016 2017
% of Gov. revenue % of GDP
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17. Future Challenges
Moving to Ageing society
• more dependent people
• less labor force
Coverage: Universal vs. Targeting
Quality of welfare
Financial constraint
• more social expenses
• source of fund: less tax payers
• SSF: defined benefit
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18. Fiscal Sustainability
Tax reform
• Increase VAT (from 7% to 10%)
• Expansion of income tax base
• Property tax
• Reduce tax privilege
• incentive from Board of Investment
• tax allowance on stock investment (LTF, RMF)
Welfare society
• CSR, Social enterprise
• informal safety net (community, social network)
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