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Thailand

Updated by Céline Felix , Myo Ghettalae , Hyung Kyu Jo , Alice Molinier on 04.11.2013

Thailand’s economic growth record in recent decades has been remarkable and has contributed to significant alleviation of income poverty. However, the benefits of growth have not been equally shared. The gap between the rich and the poor has increased, as indicated by the increase in the GINI coefficient from 0.42 in 2002 to 0.48 in 2010 (NSO).

The development of social protection has been fragmented to date. It has first been centered on civil servants and their dependants, and workers in the formal sector. The former, represents around 7% of the population, and benefits from comprehensive coverage through tax-financed schemes. The latter, who accounts for 15%, are protected against sickness, invalidity, death, maternity, child-allowance, old age and unemployment through contributory schemes managed by the Social Security Office (SSO).

Vulnerable and poor people had, for a long time, only access to ad-hoc means-tested programs. But Thailand has recently made a significant move towards universal basic social protection by introducing two major schemes that constitute the main pillars of the Thai social protection floor. The Universal Health Coverage Scheme (UCS) was introduced in 2001 to provide health care coverage to the majority of the population who were not covered by existing schemes. The package is comprehensive and includes general medical care and rehabilitation services, high-costing medical treatment, and emergency care. Secondly, a universal tax-financed 500 baht (US$ 18) scheme was established in 2008 to provide income security to the elderly over 60 (except for civil servants who have their own scheme). In 2011, the new government has approved the budget of THB 52 million to generate income for the elderly. From the fiscal year of 2012, the elderly whose aged between 60-69 years old will receive a monthly allowance of THB 600, between 70-79 years old will receive THB 800, and above 90 years old will receive THB 1,000 consecutively. 

The coverage of the informal economy workers and their families (76% of total population) remains one of the main challenges. Attempts to extend coverage include the provision under Social Security Act Art 40 of a voluntary package partly subsidized by the Government, which covers sickness, invalidity, death, old age pension (lump sum). However, only 1.68% of the target is covered so far. The National Savings Fund, a state agency instituted by Ministry of Finance (2011), is also being put in place to provide a pension. It will be accessible for Thai Nationals aged 15-60 who are not benefiting from government or Social Security Fund (SSF). Members will contribute monthly and benefit from a co-contribution from the government, depending on the amount they contribute and their age (with a ceiling of THB 600).

The need to mitigate the impact of the global  economic crisis in 2008 and respond to the  political unrest in 2010, focused attention on social protection as means of increasing economic resilience and reducing social and political tension.  The Royal Thai Government recognized that social protection carried the potential to promote a more balanced economy and address inequality. As a result, the expansion of social protection was included as key target of the 11th National Economic and Social Development Plan (NESDP) 2012-2016 with the objective to “create a more just society”.

To build a Social Protection Floor in Thailand, the government and other stakeholders involved will need to deal with other challenges, namely:

  • Providing a rights-based, systemic, adequate protection against poverty for all residents, especially the vulnerable groups (children, elderly, disabled...). For instance, the Universal tax-financed 500 baht (USD 18) scheme only represents one third of the poverty line

  • Managing the expansion of social insurance to informal economy workers

  • Harmonizing the different schemes to solve the issue of vertical inequality. For example, inequalities are felt in healthcare services between beneficiaries who contribute for their coverage to the Social Security Scheme and beneficiaries from the UCS, who enjoy a better coverage without contributing.

  • Ensuring financial and institutional sustainability of the system

  • Building capacities on social security and social protection at all levels.