Amendment of Senior Welfare Act sparks fiscal crisis and generational justice storm

In recent years, Taiwanese society has faced the dual pressures of a rapidly aging population and a declining birth rate. The allocation of resources for social welfare policies and their fiscal sustainability have consistently remained core issues of intense concern for political parties across the aisle and various sectors of society. The Legislative Yuan recently passed the third reading of the amendments to Article 22 of the Senior Citizens Welfare Act. Under the amendment, health insurance premiums that should be self-funded by seniors whose comprehensive income tax rates fall below a certain threshold will instead be subsidized through budgets compiled by the central government. Although this major legislative amendment concerning the welfare of a large number of elderly people nationwide successfully passed through parliament, the Executive Yuan immediately expressed strong dissatisfaction and concern, pointing out that the legislation conceals profound fiscal crises and social justice controversies, thereby triggering a new round of intense debate in Taiwan's political arena regarding welfare policies and generational justice.

In response to the amendment to the Senior Citizens Welfare Act passed by the Legislative Yuan, the Executive Yuan promptly responded after the third reading of the bill, summarizing three core problems with this policy. First, the Executive Yuan pointed out that the core value of the National Health Insurance system lies in social mutual assistance and risk sharing, supporting medical needs through the payment of premiums by all citizens. Allowing a specific age group to directly enjoy exemptions from premium payments undoubtedly undermines the original spirit of the National Health Insurance. Second, the Executive Yuan emphasized that by directly creating large-scale expenditure through legislative amendments, the legislature has not only significantly exceeded the constitutional division of power where the executive branch holds primary responsibility for budget compilation, but it may also disrupt the nation's overall fiscal discipline and resource allocation. Finally, regarding the most critical fiscal impact, the Executive Yuan noted that this newly added statutory expenditure will deal a heavy blow to the national treasury and, amid rapid population aging, further deepen the sense of deprivation and unfairness between generations.

To specifically illustrate the long-term impact of this policy on national finances, the Executive Yuan conducted actuarial calculations based on the provisions passed in the third reading and population projection data. The results show that as Taiwan enters a super-aged society and the proportion of the elderly population climbs year by year, the fiscal burden of this subsidy policy will expand like a snowball. According to projections, by the year 2038, the additional amount the central government must bear annually simply to fund this elderly health insurance premium subsidy will skyrocket to NT$62.86 billion. Under conditions of limited national tax revenue, alongside the need for funding in child-rearing subsidies related to the declining birth rate, national defense, infrastructure, and other public expenditures, such a massive long-term statutory expenditure will inevitably crowd out other budgets critical to the nation's future development and could even shake the foundations of national finance.

The Executive Yuan specifically emphasized that the most worrying hidden concern behind this legislative amendment is the potential to trigger serious issues of generational injustice. At this stage, Taiwan's younger generation not only faces low wages, high housing prices, and the heavy economic pressure of raising the next generation, but they also constitute the primary labor force supporting the finances of the current labor and health insurance systems. If national resources are excessively tilted toward caring for an ever-increasing elderly population—exempting them from their obligation to pay premiums—while tax revenues and social insurance contribution ratios remain unchanged, this massive financial gap will ultimately still have to be borne jointly by all taxpayers, namely the middle-aged, older, and younger generations currently struggling in the workforce. This asymmetry in resource allocation not only violates the principle that social welfare should balance the needs of all age groups, but it may also sow the seeds of confrontation and dissatisfaction between different generations.

This policy tug-of-war between the Legislative Yuan and the Executive Yuan highlights the dilemma between welfare policies and fiscal discipline as Taiwan moves toward a super-aged society. On one hand, caring for vulnerable elderly people and alleviating the economic burden on aging families are demands that people's representatives cannot shirk, and they also embody the progress of a civilized society. On the other hand, the government must proceed from the nation's overall long-term development, fiscal sustainability, and intergenerational justice to carefully evaluate the cost-effectiveness and feasibility of every social welfare policy. Following the third reading of the amendments to the Senior Citizens Welfare Act, how the administrative departments will subsequently communicate with the Legislative Yuan, whether they will propose a veto (request for reconsideration) or other countermeasures, and the impact of this policy on Taiwan's future finances and party politics will all remain the focal points of close attention from all sectors.

(Source of facts: Central News Agency)