Struggling to make ends meet, many Georgian pensioners end up relying on donations from charities or support from relatives or kind neighbours. Places in care homes are few and far between and even the state-run Soviet-era institutions are no longer taking in residents. The government is set to introduce a new pension contribution scheme but critics argue it doesn’t go far enough.

Eighty-one-year old Makvala Kebadze, who suffers from diabetes and has undergone heart surgery, spends ₾135 ($52) every month on medicine, leaving her with barely enough to pay the bills.

Georgia’s National Statistics Office calculates that Georgians spend 70% of their income on basic foodstuffs and 30% on non-grocery items such as medicine, transport, and utility bills.

The current age of retirement in Georgia is 60 for women and 65 for men. The state pension is just ₾180 ($69) a month, which many elderly people say is barely enough to cover basic necessities.

‘People’s goodwill is my only hope for survival’, Makvala says about Elderly Care, a local Facebook-based charity that collects money for the elderly.

‘I carry the weight of eighty one years on my shoulders, but the truth is […] I don’t want to die yet’. Makvala’s husband, a veteran of WWII, passed away last year. The couple had received the socially vulnerable family allowance, which ranges from ₾10–₾60 ($4–$23) per family member as well as  her husband’s state benefits as a veteran.

‘His body was still at home when the social worker came in and cancelled the allowance’. Makvala claims she was no longer entitled to the socially vulnerable allowance on the grounds that she owned her own home and therefore in theory, could have a potential source of income through taking in lodgers.

‘I could have moved in with my daughter, but she has enough trouble herself, and I don’t want to bother her with my problems’.

A spokesperson for the social services agency told OC Media that owning a property does not affect the allowance, but having a guardian or family support does.

This is why 78-year old Anzor Noniashvili, another beneficiary of the Elderly Care initiative, also does not qualify for social assistance — his granddaughter was capable of paying his mortgage debts.

Anzor and his 40-year-old son, Giorgi, now live in a single room in the front of their house. Former builders, both suffered work-related accidents, leaving Anzor with one arm partially paralysed and Giorgi bed-bound. Since Giorgi’s first surgery did not go well he’s been unable to sit up, and he requires a second operation on his hip.

‘The first [operation] cost over $6,000, and I went to Rustavi 2 TV [to appeal for funds]’, says Anzor. ‘They helped me with the announcement, and people transferred money. But now we need another $4,500–$5,000 and I’m ashamed to go there again’.

Only certain healthcare costs are covered by the state under Georgia’s health system, which often leads to families going bankrupt to pay for a relative’s care.

Anzor spends his time either caring for his son and trying to find additional funds. The two men receive benefits of ₾180 ($69) each, but Giorgi’s medical costs, together with food and utility bills add up to a lot more.

Anzor approached the district administration (gamgeoba) with a doctor-approved calculation of Giorgi’s needs, ₾290 ($112) a month — well above what he receives in benefits. The administration’s response was to send Anzor ₾120 ($46) and a note telling him not to appeal again for four months.

‘My only hope for [surviving] these four months is people’s kindness’, he says.

Retirement homes

‘Boarding house full of life’ — bold letters hang over the entrance to the Tbilisi State Home for the Elderly. In the hallways of this purpose-built three-storey care home from the Soviet era, you’ll hardly encounter a single person.

‘The residents spend most of their time in their rooms. They’re aged, you see’, explains Nana Gogiashvili, one of the carers, as she gives a tour. Although the building is half-empty, this retirement home hasn’t accepted any new residents for four years.

‘It seems that the government is waiting for the number of residents to decrease, so they can change the system, but no one tells us when or how this will happen’, Nana says.

The home is one of two remaining Soviet-era state boarding houses for the elderly; the other is in Kutaisi. There are currently 50 people living in the Tbilisi home, most of which were social allowance receivers or homeless. It’s means tested and those who don’t score high enough to be considered socially vulnerable can still receive a partial contribution. Each applicant is evaluated by the social services agency.

Mediko Iashvili, 86, is the only internally displaced person (IDP) from Abkhazia living in the home, as well as the longest resident — she came in 2000, after living with several relatives since fleeing her home in Abkhazia during the war in the early 1990s. She says it was hard for her to get a place in the home because the director at the time was afraid that more IDPs would come and that they wouldn’t have the capacity to accommodate them all. Mediko managed to get a room by appealing to the government directly during an election period, and has been observing the comings and goings of the home ever since.

Out of her first group of friends, she’s the only one still alive. ‘We don’t have newcomers anymore, and the old residents grow idle. I’m friends with one of the women who is in a sane state of mind’, she says.

Darejan Tomadze, the home’s manager, believes there should be a separate institution for residents with dementia. ‘There are 15 residents with dementia here, and I think that others, watching them, might get grim ideas about their futures’.

Tomadze says she’s more than happy that the system will switch from Soviet-style large institutions to smaller retirement homes. Yet it’s not clear how many homes it will take to meet the demand.

‘We get at least ten phone calls daily with people begging for a place under a staircase and a hot cup of tea’, she says.

As part of the Community Organisations programme, the government has signed agreements with several community organisations that run small shelters for the homeless and vulnerable. The government contributes ₾16 ($6) per person per day through a voucher system to cover the cost of accommodating a person in one of these shelters. The homes have different profiles and twelve of them specialise in caring for the elderly. Those seeking a place are accepted on the basis of a social worker’s evaluation of their situation, with social allowance recipients being a priority on the list.

Additional criteria for accepting residents are set by the organisations themselves — most don’t have a budget to house bed-bound elderly people or people with certain health conditions.

There are currently 76 people in twelve such homes for the elderly, with 36 vacant places. The manager of community organisation Barbare XXI, Merab Shatarishvili, is worried about the winter cold — his retirement home has eight vacant places and several people pleading for accommodation who are homeless and socially vulnerable, yet he’s not able to house them.

‘The government issues a limited number of vouchers from the state budget and people can only acquire a new place if one of the beneficiaries dies; they can be waiting for years’, says Shatarishvili. Only 235 vouchers are issued for the programme every year, which also covers people with disabilities and their children. According to him, this creates an unhealthy situation with some off-the-grid retirement homes where people use their pensions to rent a bed. These, Shatarishvili says, are not monitored and the elderly can easily end up in the hands of scammers.

‘We want to be Europeans but we end up with distorted versions of foreign systems’, Shatarishvili says.

Another option for struggling elderly people is to seek a place in one of the non-state retirement homes funded through charitable foundations. These also have different criteria for accepting residents. For example, the Katarzisi shelter only takes women — ‘Men require a specific type of care’, says Maia Kobiashvili, the home’s manager.

‘We’re currently building an extra floor for the bed-bound, as it’s a huge separate issue’. The biggest problem, she says, is neglect of the elderly in Georgia.

Pension reforms

To address low pensions, the government passed a new pension law in July that would top up the current state pension of ₾180 ($69) a month with a cumulative scheme. The new scheme — which is mandatory for those under 40 and voluntary for over 40s — will mean that for those in employment, employees, employers, and the government will each pay 2% into a pension fund. Self-employed people will be able to voluntarily contribute 4% with the government still putting in 2%.

The pension fund will be overseen by a supervisory board of ministers, with the National Bank manage the investments.

The reform has come under criticism from a number of quarters, with Transparency International Georgia arguing that a cumulative system is not tailored to the Georgian labour market. In a statement prior to the bill’s adoption, the group pointed out that ‘hired employees encompass only 25% of total workforce, 34% are self-employed and 41% are either unemployed or are not accounted for as they work in the black economy’

In a policy paper for the Friedrich Ebert Foundation, pension reform expert Martin Hutsebaut argued that the new system has the potential to increase social inequality, as those with greater incomes will receive higher pensions with those on the bottom receiving less.

Independent research by OSF Georgia highlighted another vulnerable group that could end up left out of the scheme — over 80,000 builders employed on a short-term basis, who are widely underpaid.

Several alternative proposals include a Pay As You Earn (PAYE) scheme where current employees are taxed to pay current pensioners, strengthening basic pensions and creating a separate solidarity fund by levying a social tax on high-income earners.

The Social Democrats faction of the ruling Georgian Dream Party have proposed just that. Their proposal for a 2% salary payment for future retirement and a 4% PAYE contribution to benefit existing pensioners right away has made it to the Healthcare Committee, but the plan still needs to be approved in parliament.

This article was prepared with support from the Friedrich-Ebert-Stiftung (FES) Regional Office in the South Caucasus. All opinions expressed are the author’s alone, and do not necessarily reflect the views of FES.