The Farmer Health Insurance (FHI) is an occupational social insurance and is the only social insurance that do not offers old-age benefits. In order to improve the life quality of elderly farmers, the government offered Welfare Allowance for Elderly Farmers (WAEF) as an alternative measure. However, most farmers reflect that it is still not sufficient to support them after retirement. Therefore, the 6th National Agricultural Congress (Sept. 7 to 8, 2018) reached the conclusion of elevating financial security for the elderly farmers. The resolution called for the government to integrate Farmer Health Insurance, Welfare Allowance for Elderly Farmers and other social insurance schemes. The goal is to establish the Farmers Pension System based on WAEF without compromising farmers’ interests, which stays in line with President Tsai’s political commitment of establishing an exclusive pension system for farmers.
The Farmer Pension Act was announced on June 10, 2020 and is scheduled to become effective from January 1, 2021. The Farmer Pension System (FPS) is comprised of monthly payments from farmers and the Competent Authority, which will be used as future retirement fund for farmers once they attain 65 years of age. It is part of the elderly farmer financial security system along with the WAEF. Farmer Health Insurance policyholders who are under 65 years of age and has not yet received any old-age benefit from other social insurance programs, may choose to make payments to the farmer pension fund on a voluntary basis. The monthly contribution amount by the farmer shall be calculated based on the monthly basic wage of labors announced by the Ministry of Labor, multiplied by payment ratio of the said contribution, which shall be decided by farmers between 1% and 10%. If a farmer decides to pay 10%, while the announced monthly basic labor wage in 2021 is NTD 24,000, then the amount to be paid by the farmer for January 2021 shall be NTD 2, 400. If farmers need to adjust their payment ratio, they can submit such application through farmers associations in May or November of each year.
The government encourages young farmers to make monthly payments into the pension fund, whereas the government will deposit the same amount into their individual pension account. The sooner and more the deposits are done, the more they will collect in pension in the future. For farmers who have paid for 25 years starting at the age of 40, they can collect a total of up to NTD 24,000 per month in WAEF and pension combined; while those who have paid for 35 years starting at the age of 30, are entitled to collect a total of up to NTD 37,000 per month, given the following conditions are set as base of calculation: current WAEF at NTD 7,550 per month, once-every-4-year adjustment of Consumer Price Index (approximately 4%), and the calculation conditions for the Farmer Pension System (monthly basic labor wage at NTD 24,000, average annual increase adjustment of 2%, fund income 3%, average remaining life of 20 years, and farmer contribution of 10%). This is to ensure that farmers who are willing to make savings through Farmer Pension scheme can enjoy the same standard of living and security as other occupations, and at the same time become a crucial pushing force that encourages young people to join the line of agriculture, adjusts agricultural labor structure, indirectly encourages elderly farmers to retire comfortably from farming, and invigorates farmland utilization.