ABSTRACT
According to the National Development Council, Taiwan formally became a senior-age society in August 2018. In 2018, the dependency ratio reached 37.9%, and the old-age support ratio was 20.1%. In Taiwan, 98,000 farmers who are over the age of 65 are still actively farming because they worry of losing all their sources of income after their retirement. Until June 10th, 2020, Taiwan passed the Farmer Retirement Savings Regulations and on December 22nd, 2021, the Taiwan Farmers Pension Act was finally legally amended under the Council of Agriculture (COA), Executive Yuan. There are well-built pensions regulations on a popular formal job in Taiwan while farmers are considered as a group of minority workers. Thus, the government has only recently implemented a farmer pension program. The Taiwan government, under the Ministry of Labor, has subsidies programs for elderly farmers, such as the Interim Regulations on Welfare Allowances for Elderly Farmers which provide NT$7,000 (approx. US$236) monthly allowance to elderly farmers who are over 65 years old. The Taiwan government has newly implemented a farmer retirement program through the Farmer Pension Act 2021 and farmer’s financial protection through the Farmer Insurance Act of 2020. This article provides an overview of three government programs: the Interim Regulations on Retirement Welfare Allowance for Elderly Farmers, Farmer Insurance Act and Farmers Pension Act. It includes the overview of the legal content, conclusion, and recommendations related to the program regulations.
Keywords: Taiwan, farmers’ welfare, retirement, subsidies
INTRODUCTION
Background
Agricultural labor in Taiwan only accounts for 5% of the total labor force. While the age structure of the elderly population is rapidly aging, in 2021, the super-aged (those who are over 85 years old) population account for 10.5% of the elderly population, and it will increase to 27.4% in 2070 (NDC, 2022). Internationally, the proportion of the population who are over the age of 65 in the total population reaches 7%, 14% and 20%, which are called aging society, advanced society and super-aging society, respectively. As a minority group, several decades before, the Taiwan government had not implemented a farmer welfare program for elderly farmers. Farmers aged over 65 could still forcedly work on their lands to survive financially. Therefore, the Taiwan government has recently passed legislation and changes to the Farmers' Retirement Savings Regulations, the Agricultural Insurance Law, and the Interim Regulations on Welfare Allowances for Elderly Farmers; the regulation has already been operating legally to guarantee Taiwanese elderly farmers.
According to the Agricultural Insurance Law, the government can subsidize up to 75% of the amount of the farmer’s losses as cash relief in the first five years and after sixth year is up to 60%. The government make up as subsidies for insured losses sustained by the agriculture, forestry, fishery and animal industry businesses from natural disasters. Under the Agricultural Insurance Act, 2020, formulated by the Council of Agriculture, Executive Yuan, the Taiwan government would guarantee the supposed farmers who encounter natural disasters, such as typhoons, and earthquakes, which cause lands and property damages or unstable market prices. In the Farmer Retirement Savings Regulations and the Interim Regulations on Annual Farmer Welfare Allowances, farmers must pay less than 10% of their monthly income, calculated based on Taiwan's 2022 minimum basic salary of NT$25,250 (approx. US$852). The government also pays the same amount as an insurance fund. After the farmers retire, the government will calculate the amount and plan to return them every month. The farmers can only receive it up to 85 years old.
LEGAL CONTENT
The legal content includes the welfare allowance for elderly farmers regulation, farmers insurance, and farmers' retirement savings regulations. The Council of Agriculture (COA), Executive Yuan formulated this regulation to encourage farmers, especially the senior farmers, to be financially secure. The aim is to increase farmers' pensions, stabilize rural communities and promote agricultural economic development. Participants of farmers' retirement savings are farmers and members of farmer associations who are qualified periodically.
Regulatory structure
Supervising the income, expenditure, storage, operation, and management of farmers' pension funds must employ government agencies, representatives of farmers, experts and scholars. The income, expenses, and storage of farmers' pension savings must be handled by the Labor Insurance Bureau of the Ministry of Labor. Whereas the use, operation, and management of farmer pension funds must be handled by the Bureau of Manpower Fund Utilization of the Ministry of Labor. The Council of Agriculture (COA), Executive Yuan of Taiwan are fully in control of these three programs. The following sub-paragraphs describes in detail the content summary of the COA programs referring to in the following three tables. The welfare programs for elderly farmers are referred to in Table 1 as stipulated in the Interim Regulations on Welfare Allowance for Elderly Farmers; the agriculture and farmers insurance program is referred to in Table 2 in accordance with the Agricultural Insurance Act; and the farmers’ retirement savings are referred to in Table 3, pursuant to the Farmers Pension Act.
Welfare Allowance Regulations for Elderly Farmers
Table 1. Summary of Interim Regulations on Welfare Allowance for Elderly Farmers
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Content
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Issue
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Remark
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Art. 1
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Interim Regulations on Welfare Allowances for Elderly Farmers
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The aim: to assist elderly farmers in their daily lives and to improve the well-being of the farming population.
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Art. 2
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The competent authority referred to in these Regulations: at the central level is the Council of Agriculture (COA) of the Executive Yuan.
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At the municipal level, it is the municipal government; at the county (city) level, it is the county (city) government’ administration.
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Art. 3
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Elderly farmers mentioned in these Regulations shall meet the following qualifications:
- Taiwan Nationals who have reached the age of 65, have household registration in the country, and have lived for more than 183 days per year in the last three years; and
- A farmer who participated in the Farmer Health Insurance at the time of application and had a total of more than 15 years of insurance, or a fishermen association's category A member who has received labor insurance old-age benefits and has a total of more than 15 years of membership.
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Art. 4
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Elderly farmers who meet the qualifications of the preceding article may apply for a welfare allowance which was adjusted to NT$7,000 (approx. US$236) per month as of January 1st, 2012, and is issued up through the month in which the recipient dies. In the future, the amount shall be adjusted once every four years. The adjustment shall be made and publicly announced by the COA at the central government level, with reference to the percentage change of the consumer price index for the most recent year (as issued by the central government’s accounting and statistics agency) in comparison with the consumer price index for the year prior to the previous adjustment.
Disclaimer:
- For a person who is already receiving a social insurance welfare allowance for the elderly, if said person, following the coming into effect of the amended version of this law on November 11th, 1998, either (a) reenters Farmers Health Insurance or (b) is a category A member of a fishermen's association who joins Labor Insurance, the provisions of this Act shall not apply.
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- The elderly farmers who have received welfare allowances before January 1st, 2013, are not applicable: (1) The fiscal and taxation authorities provide the total personal comprehensive income tax other than agricultural income for the year announced by the central competent authority, totaling NT$500,000 (approx. US$17,000) or more; and (2) The value of land and houses owned by individuals totaling NT$5 million (approx. US$170,000) or more, exempting from legal Land for agricultural use, economically inactive land reserved for Aboriginal people, and land for public use.
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Art. 4-1
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Welfare allowances for elderly farmers and the right to claim such allowances shall not be the subject of seizure, assignment, offset, or guarantee.
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Those who apply for welfare allowances by the provisions of these regulations may submit a certification document issued by the central competent authority and open a particular account with a financial institution to deposit this allowance.
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Art. 6
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In the municipality area, the central competent authority shall pay 50% of the welfare allowance for the elderly farmers, and the municipality shall pay the other 50%; in the provincial area, the central government shall pay.
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Source: Provisional Act Governing the Welfare Allowance for Elderly Farmers, Council of Agriculture, Executive Yuan, 2018
Farmers and agriculture insurance regulations
Table 2. Summary of Agricultural Insurance Act
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Content
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Issue
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Remark
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Art. 1
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The Act is enacted to establish an agricultural insurance system.
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Aims: to make up for losses sustained by the agriculture, forestry, fishery and animal industry businesses from natural disasters, strengthen protection for agricultural operations and stabilize the income for farmers.
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Art. 3
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1.“Agricultural insurance” means an insurance coverage that is announced by the competent authority to make up for actual or presumed losses caused by natural disasters or other events to the subject matter insured.
2.“Subject matter insured” means an item related to a product of the agriculture, forestry, fishery or animal industry business.
3.“Insurance enterprise” means an entity approved by the Financial Supervisory Commission that has been established and registered in accordance with the law to engage in the insurance business.
4.“Insurer” means an insurance enterprise and a farmers’ or fishermen’s association that has a right to claim a premium upon entering into an agricultural insurance contract and is liable for indemnification in accordance with the contracted insurance obligations when an insured hazardous incident occurs.
5.“Proposer” means a person having an insurable interest in the subject matter insured who applies with an insurer to enter into an agricultural insurance contract and is obliged to pay a premium.
6.“Insured” means a person actually engaged in agriculture, forestry, fishery or animal industry business who, upon incurring damage as a result of an insured incident, enjoys the right to claim indemnification. A proposer may also be the insured.
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Art. 10
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The Council of Agriculture (COA), Executive Yuan may provide a subsidy to the proposer’s premium for the agricultural insurance.
The recipient, rate, amount, application procedure, issuance, rescission of subsidization and other matters to be complied with for the premium subsidization specified in still shall be prescribed by the COA.
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The rate of subsidy shall be determined according to the subject matter insured and the type of insurance. During the five years after the enforcement of this Act, the upper limit shall be fixed at 75%; from the sixth year of the enforcement, the upper limit shall be 60%. However, the foregoing shall not apply to mandatory insurance.
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Art. 11
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The COA shall assist the farmers in the development of agricultural insurance products. The COA may provide subsidization to the surcharge incurred by the insurer in the handling of agricultural insurance or provide incentive rewards.
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The recipients, qualifications, review procedures and basis, subsidization and rescission of subsidization or incentive rewards and other matters to be complied with for the subsidy or incentive rewards specified shall be prescribed by the COA.
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Art. 12
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The risk spreading and management mechanism shall be administered by the Agricultural Insurance Fund of the COA; the risk transferred by the insurer shall be assumed by the foregoing fund, ceded to domestic or foreign reinsurers or handled in the manner prescribed by the COA.
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With respect to the risk spreading and management mechanism, the COA shall, in consultation with the Financial Supervisory Commission, prescribe regulations governing the risk assumption limit or rate, insured amount, insurance premium rate, provisions for various reserve funds and other matters to be complied with.
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Art. 13
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The Agricultural Insurance Fund shall conduct the following activities:
1.Matters on re-insurance, risk assumption and risk spreading of agricultural insurance;
2.Matters on fund income and fund utilization;
3.Establishment and maintenance of the agricultural insurance information system;
4.Education and training of loss adjustment personnel and establishment and management of human resource database; they may handle loss adjustment matters upon appointment by the insurer;
5.Education and publicity of agricultural insurance;
6.Establishment of channels for assistance, consultation and complaint for the proposer and the insured of the agricultural insurance; and
7.Promotion of other matters related to agricultural insurance.
With respect to the Agricultural Insurance Fund, the charter of endowment, fund utilization and other matters to be complied with shall be prescribed by the competent authority.
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Art. 14
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The sources of funds for the Agricultural Insurance Fund shall be as follows:
1.Endowment by the government;
2.Reinsurance premium income received from agricultural insurance products;
3.Interest and returns on capital;
4.Income from donations;
5.Obtaining loans or financing from financial institutions; and
6.Other sources of income.
With respect to the endowment by the government specified in Sub-paragraph 1 of the preceding paragraph, the competent authority shall allocate an annual budget of NT$10 billion (Approx. US$337.1 million); thereafter, it shall continue to allocate and budget for the foregoing fund based on the required underwriting capacity and the extent of loss.
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Art. 15
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Tax reduction and exemption: Upon the issuance of a certificate by the Agricultural Insurance Fund.
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The donations specified may be catalogued as itemized deduction or expenses in the tax return for that year in accordance with Art. 17 or 36 of the Income Tax Act.
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Art. 16
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An insurer may be exempted from business tax and stamp tax for handling agricultural insurance in accordance with the Act.
All accounts, receipts, revenue and expenditures of the Agricultural Insurance Fund for the handling of agricultural insurance in accordance with this Act shall be exempted from taxation.
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Tax preference specified in the two preceding paragraphs shall be limited to fifteen years. Before the period expires, the Executive Yuan may extend the tax preference period once for a maximum period of fifteen years taking the actual circumstances into consideration.
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Art. 29
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A farmers’ or fishermen’s association that handles agricultural insurance in accordance with Art. 58 Par. 2 of the Agricultural Development Act prior to the enforcement of this Act shall be the insurer from the enforcement date of this Act and shall be governed by this Act in the handling of agricultural insurance.
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- The farmers’ or fishermen’s association shall obtain approval from the competent authority within two years from the enforcement date of this Act in accordance with the method prescribed under Art. 6 Par. 2.
- With respect to a farmers’ or fishermen’s association that handles agricultural insurance in accordance with Art. 58 Par. 2 of the Agricultural Development Act, the balance of its dedicated agricultural insurance account accrued before the establishment of the Agricultural Insurance Fund shall be transferred into the Fund within two years of the establishment of the Fund.
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Source: Agricultural Insurance Act, Council of Agriculture, Executive Yuan, 2020
Farmers retirement saving regulations
Table 3. Summary of Farmers Pension Act
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Content
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Issue
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Remark
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Art. 1
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The specific legislative intent of this Act is to encourage farmers to save money for their old age, enhance guarantees of the quality of life for retired farmers, stabilize rural society, and promote rural economic development.
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Art. 3
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Farmers’ pension shall be comprised of monthly payments from farmers and the Council of Agriculture (COA), Executive Yuan. Farmers who meet the following two qualifying criteria can, based on this Act, make payments into farmers’ pensions:
1. Those who actually cultivate the land, are less than 65 years old, and are covered under Farmers Health Insurance (FHI).
2. Those who do not receive payments for the elderly from relevant social insurance.
Farmers mentioned in the preceding Paragraph who make payments into a farmers’ pension based on this Act shall, during the period of such payments, continually be covered under FHI.
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Art. 7
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The monthly payments of farmers shall be calculated by the COA. It will only be after a farmer makes payments into his/her farmers’ pension that the COA will, based on the amount paid into the farmers’ pension by a farmer, make a similar payment each month.
Monthly payments made by farmers into farmers’ pensions shall not be calculated as taxable income from self-employed farming, fisheries, animal husbandry, forestry, or mining for the year.
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- The monthly payments of farmers as stipulated in Art.3, Par. 1 shall be calculated as a proportion of the basic wage as announced by the Ministry of Labor.
- The payment ratio mentioned in the previous Paragraph shall be decided by farmers within a range of 10%, and shall be an integer.
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Art. 9
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- ayments made into a farmers’ pension shall continue from the day such payments begin until one day before the farmer reaches the age of 65, ceases payments, or withdraws from FHI.
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Art. 10
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Farmers may apply to the Farmers' Association in May or November each year to adjust the contribution rate. The association shall notify the Bureau of Labor Insurance before the end of the month if the application is accepted. The adjustment shall take effect from the first day of the following month of notification.
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- Suppose the farmers above have already started to apply for the farmers' retirement pension. In that case, the Bureau of Labor Insurance shall deduct one-third of the amount they receive each month from the retirement pension account until the total amount is settled.
- If the farmers above die before the total amount of compensation is paid, the Bureau shall make a lump sum deduction from the retirement savings account to the competent authorities. In the event of failure to make such deduction or insufficient deduction, the Bureau shall, in writing, order his or her legal successor to make the deduction within the scope of his or her inheritance.
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Art. 14
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A farmer who has made a farmer's retirement savings following this Act may claim the savings when he/she reaches 65.
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Art.15
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The method of receiving and calculating the farmer's retirement savings is the retirement account's principal and accumulated income. The amount calculated based on the average remaining life and interest rate based on the annuity life table is paid regularly monthly. The income from the farmers' retirement savings in the preceding paragraph shall not be lower than the income calculated based on the local bank's two-year fixed deposit interest rate; if there is any deficiency, the state treasury shall make up for it.
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The calculation of the annuity life table, average remaining life, interest rate, and amount specified in the first paragraph shall be drawn up by the Labor Insurance Bureau according to the national, aboriginal, and disabled status and submitted to the competent authority for approval.
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Art. 16
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Farmers who are under 65 years old and have one of the following circumstances may apply for farmers’ retirement savings:
- Receiving the payment for the physically and mentally disabled as stipulated in the Farmer’s Health Insurance Regulations, the insurer determines that it cannot continue agricultural work;
- Receiving the disability annuity payment or one-time disability with disability level 3 or higher as stipulated in the labor insurance regulations;
- Pay – Receive the disability annuity payment or the basic guaranteed annuity payment for the disability under the National Pension Law; and
- The insured person who is not covered by the preceding three paragraphs meets the physical and mental disability or disability status specified in the preceding three paragraphs.
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- For those who apply for the retirement savings of farmers under circumstances of Art. 16, the farmers shall determine the application period and pay them monthly.
- A farmer who has applied for a farmer's retirement savings by the first paragraph and has withdrawn from the agricultural insurance, which is agricultural insurance insured because he can continue to engage in agricultural work before the age of sixty-five years old, may apply by this regulation to start withdrawing the farmer's retirement savings will be recalculated during the actual withdrawal period.
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Art. 17
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If a farmer dies before applying for the farmer's retirement savings, his survivor or the designated applicant shall apply for the farmer's retirement savings once.
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Those who have received the farmers' retirement savings shall stop issuing their retirement savings if they die before the average remaining life specified in Article 15 Par. 3 or the claim period specified in Par. 2 of the preceding Article. The remaining amount settled in the retirement savings account shall be recovered by the survivor or the designated claimant.
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Art.18
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The order of priority of heirs for collection of farmers’ pensions as stipulated in the previous Article shall be as follows: (1) spouse and children; (2) parents; (3) grandparents; (4) grandchildren; and (5) siblings. (Par. 1)
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After a farmer dies, the principal and accumulated income in the individual farmers’ pension account shall, in any of the following situations, be transferred to the farmers’ pension fund:
1. There are no heirs as described in Par. 1 nor is there any designated collector.
2. The right to apply to collect the farmers’ pension of the heirs as described in Paragraph 1 or of a designated collector has lapsed because of time limitations.
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Art. 19
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When farmers or their heirs or designated collectors apply for farmers' retirement savings, they should fill in an application form, attach relevant documents, and submit them to the Labor Insurance Bureau in the first paragraph of Art. 8 of the Farmers' Association.
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- The Bureau of Labor Insurance shall determine the contents of the application form and related documents and the application procedures. Suppose the application procedures are complete, and the farmers' retirement savings should be issued after review. In that case, the Labor Insurance Bureau shall issue the application before the end of the following month after receiving the application.
- The right of the survivors of the peasant or the designated petitioner to claim the retirement savings of the peasant in Par. 1 shall be extinguished due to non-exercise for ten years from the date of obtaining the claim.
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Art. 20
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Farmer’s Retirement Savings Fund, and the farmers or their survivors or designated applicants requesting the Farmer’s Retirement Savings Fund. The rights shall not be assigned, seized, offset, or provided for guarantee.
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Farmers who apply for farmers' retirement savings by the provisions of these Regulations may submit a certification document issued by the Labor Insurance Bureau and open a particular account with financial institutions to deposit farmers' retirement savings. The deposits in the particular account mentioned in the preceding paragraph shall not be used to target offset, seizure, guarantee, or enforcement.
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Art. 21
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The Farmers’ Association failed to notify the Bureau of Labor Insurance to withdraw the farmers' retirement savings, adjust the withholding ratio, or stop the payment of the farmers' retirement savings by Art. 8, Pars. 2, 10, or Art.12, Par.1.
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Those who cause damage to farmers shall be liable for compensation. The right to claim in the preceding paragraph shall be extinguished due to non-exercise for two years from the day the farmers become aware of the damage; the same is true for those more than five years after the damage occurs.
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Art. 24
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The farmers' retirement fund shall not be seized, used for the guarantee, or used for other purposes except for the payment of farmers' retirement savings and investment.
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The competent authority shall draft the management, use and profit methods, and loss distribution and submit it to the Executive Yuan for approval.
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Art. 25
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Bureau of Labor Insurance and Bureau of Labor Funds
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It shall separate accounts for the financial income and expenditure of the farmers' retirement savings and farmers' retirement funds and handle them separately from other businesses they handle; their related accounting reports and annual accounts shall be handled by relevant laws and regulations and shall be consolidated by Bureau of Labor Funds and reported to the Council of Agriculture for reference.
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Art. 26
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The income and expenditure, use, accumulated amount, and financial statements of the Farmer's Retirement Fund.
It shall be reported to the Competent Authority monthly by the Bureau of Labor Funds, and the Competent Authority shall make an annual announcement.
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Art. 30
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All account books, vouchers, and business income and expenditures of the Bureau of Labor Insurance and the Bureau of Labor Funds for the businesses specified in this Act are exempt from taxation.
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Source: Farmers Pension Act, Council of Agriculture, Executive Yuan, 2021
DISCUSSION AND CONCLUSION
After long consecutive years, the Council of Agriculture amended the Interim Regulations on Welfare and Allowance for Elderly Farmers (老年農民福利津貼暫行條例2018), Agriculture Insurance Act (農業保險法 2020) in May 2020, and the Farmers Pension Act (農民退休儲金條例 2021) as new legal retirement savings program starting from December 22nd, 2021 under the Council of Agriculture, Executive Yuan.
The Regulations on Farmers' Retirement Savings (Farmers Pension Act), the Interim Regulations on Retirement Welfare and Allowance for Elderly Farmers and the Agricultural Insurance Act, the three laws jointly protect Taiwan farmers' lives. Supposed Taiwan farmers encounter natural disasters, man-made disasters, such as typhoons, droughts, or injuries, pregnancy and childbirth, and their incomes stability are affected; the Taiwan government shall fully support and protect the farmers living under those circumstances. The relevant conditions include that the insured salary is NT$25,250 (approx. US$852) of the basic wage of the laborer (refer to Art. 7 Table 3) (with an average increase of 2% per year) (DGBAS, 2022), the fund return of this insurance is up to 10% (refer to Art. 7 Table 3), and the average remaining life of the Taiwan farmer after the age of 65 is 20 years, which can be received every end of month before the age of 85.
In addition, the Taiwan government also provides NT$7,000 (approx. US$236) as welfare allowance for the elderly farmers which also support elderly farmers financially. While farming risks are also protected under the Agriculture Insurance Act (refer to Table 2). Taiwan has labor insurance regulations for laborers, insurance for civil servants, farmers insurance, and the National Pension Law for everyone, while agricultural insurance and labor insurance are relatively complete, with guaranteed births, injuries, and subsidies for pregnancy and childbirth (refer to the Labor Pension Act, 勞工退休金條例, 2019).
REFERENCES
COA. 2018. Provisional Act Governing the Welfare Allowance for Elderly Farmers. Council of Agriculture, Executive Yuan, ROC, Taiwan
COA. 2020. Farmers Pension Act. Council of Agriculture, Executive Yuan, ROC, Taiwan
COA. 2021. Farmers Pension Act. Council of Agriculture, Executive Yuan, ROC, Taiwan
DGBAS. 2022. Taiwan Basic Salary Statistical Data .行政院主計總處, Taiwan Directorate General of Budget, Accounting and Statistics, Taipei.
MoL. 2019. Labor Pension Act 2019. Ministry of Labor, Executive Yuan, ROC, Taiwan
NDC. 2022. Aging Time Populations高齡化時程 National Development Council 國家發展委員會, Executive Yuan, ROC, Taiwan
TIER. 2022. Taiwan Economics Editorial Current Situation and Adjustment Direction of Basic Salary 2022 Taiwan Institute of Economics Research, Taipei
Overview of Taiwan Government’s Farmers Welfare and Retirement Program
ABSTRACT
According to the National Development Council, Taiwan formally became a senior-age society in August 2018. In 2018, the dependency ratio reached 37.9%, and the old-age support ratio was 20.1%. In Taiwan, 98,000 farmers who are over the age of 65 are still actively farming because they worry of losing all their sources of income after their retirement. Until June 10th, 2020, Taiwan passed the Farmer Retirement Savings Regulations and on December 22nd, 2021, the Taiwan Farmers Pension Act was finally legally amended under the Council of Agriculture (COA), Executive Yuan. There are well-built pensions regulations on a popular formal job in Taiwan while farmers are considered as a group of minority workers. Thus, the government has only recently implemented a farmer pension program. The Taiwan government, under the Ministry of Labor, has subsidies programs for elderly farmers, such as the Interim Regulations on Welfare Allowances for Elderly Farmers which provide NT$7,000 (approx. US$236) monthly allowance to elderly farmers who are over 65 years old. The Taiwan government has newly implemented a farmer retirement program through the Farmer Pension Act 2021 and farmer’s financial protection through the Farmer Insurance Act of 2020. This article provides an overview of three government programs: the Interim Regulations on Retirement Welfare Allowance for Elderly Farmers, Farmer Insurance Act and Farmers Pension Act. It includes the overview of the legal content, conclusion, and recommendations related to the program regulations.
Keywords: Taiwan, farmers’ welfare, retirement, subsidies
INTRODUCTION
Background
Agricultural labor in Taiwan only accounts for 5% of the total labor force. While the age structure of the elderly population is rapidly aging, in 2021, the super-aged (those who are over 85 years old) population account for 10.5% of the elderly population, and it will increase to 27.4% in 2070 (NDC, 2022). Internationally, the proportion of the population who are over the age of 65 in the total population reaches 7%, 14% and 20%, which are called aging society, advanced society and super-aging society, respectively. As a minority group, several decades before, the Taiwan government had not implemented a farmer welfare program for elderly farmers. Farmers aged over 65 could still forcedly work on their lands to survive financially. Therefore, the Taiwan government has recently passed legislation and changes to the Farmers' Retirement Savings Regulations, the Agricultural Insurance Law, and the Interim Regulations on Welfare Allowances for Elderly Farmers; the regulation has already been operating legally to guarantee Taiwanese elderly farmers.
According to the Agricultural Insurance Law, the government can subsidize up to 75% of the amount of the farmer’s losses as cash relief in the first five years and after sixth year is up to 60%. The government make up as subsidies for insured losses sustained by the agriculture, forestry, fishery and animal industry businesses from natural disasters. Under the Agricultural Insurance Act, 2020, formulated by the Council of Agriculture, Executive Yuan, the Taiwan government would guarantee the supposed farmers who encounter natural disasters, such as typhoons, and earthquakes, which cause lands and property damages or unstable market prices. In the Farmer Retirement Savings Regulations and the Interim Regulations on Annual Farmer Welfare Allowances, farmers must pay less than 10% of their monthly income, calculated based on Taiwan's 2022 minimum basic salary of NT$25,250 (approx. US$852). The government also pays the same amount as an insurance fund. After the farmers retire, the government will calculate the amount and plan to return them every month. The farmers can only receive it up to 85 years old.
LEGAL CONTENT
The legal content includes the welfare allowance for elderly farmers regulation, farmers insurance, and farmers' retirement savings regulations. The Council of Agriculture (COA), Executive Yuan formulated this regulation to encourage farmers, especially the senior farmers, to be financially secure. The aim is to increase farmers' pensions, stabilize rural communities and promote agricultural economic development. Participants of farmers' retirement savings are farmers and members of farmer associations who are qualified periodically.
Regulatory structure
Supervising the income, expenditure, storage, operation, and management of farmers' pension funds must employ government agencies, representatives of farmers, experts and scholars. The income, expenses, and storage of farmers' pension savings must be handled by the Labor Insurance Bureau of the Ministry of Labor. Whereas the use, operation, and management of farmer pension funds must be handled by the Bureau of Manpower Fund Utilization of the Ministry of Labor. The Council of Agriculture (COA), Executive Yuan of Taiwan are fully in control of these three programs. The following sub-paragraphs describes in detail the content summary of the COA programs referring to in the following three tables. The welfare programs for elderly farmers are referred to in Table 1 as stipulated in the Interim Regulations on Welfare Allowance for Elderly Farmers; the agriculture and farmers insurance program is referred to in Table 2 in accordance with the Agricultural Insurance Act; and the farmers’ retirement savings are referred to in Table 3, pursuant to the Farmers Pension Act.
Welfare Allowance Regulations for Elderly Farmers
Table 1. Summary of Interim Regulations on Welfare Allowance for Elderly Farmers
Content
Issue
Remark
Art. 1
Interim Regulations on Welfare Allowances for Elderly Farmers
The aim: to assist elderly farmers in their daily lives and to improve the well-being of the farming population.
Art. 2
The competent authority referred to in these Regulations: at the central level is the Council of Agriculture (COA) of the Executive Yuan.
At the municipal level, it is the municipal government; at the county (city) level, it is the county (city) government’ administration.
Art. 3
Elderly farmers mentioned in these Regulations shall meet the following qualifications:
Art. 4
Elderly farmers who meet the qualifications of the preceding article may apply for a welfare allowance which was adjusted to NT$7,000 (approx. US$236) per month as of January 1st, 2012, and is issued up through the month in which the recipient dies. In the future, the amount shall be adjusted once every four years. The adjustment shall be made and publicly announced by the COA at the central government level, with reference to the percentage change of the consumer price index for the most recent year (as issued by the central government’s accounting and statistics agency) in comparison with the consumer price index for the year prior to the previous adjustment.
Disclaimer:
Art. 4-1
Welfare allowances for elderly farmers and the right to claim such allowances shall not be the subject of seizure, assignment, offset, or guarantee.
Those who apply for welfare allowances by the provisions of these regulations may submit a certification document issued by the central competent authority and open a particular account with a financial institution to deposit this allowance.
Art. 6
In the municipality area, the central competent authority shall pay 50% of the welfare allowance for the elderly farmers, and the municipality shall pay the other 50%; in the provincial area, the central government shall pay.
Source: Provisional Act Governing the Welfare Allowance for Elderly Farmers, Council of Agriculture, Executive Yuan, 2018
Farmers and agriculture insurance regulations
Table 2. Summary of Agricultural Insurance Act
Content
Issue
Remark
Art. 1
The Act is enacted to establish an agricultural insurance system.
Aims: to make up for losses sustained by the agriculture, forestry, fishery and animal industry businesses from natural disasters, strengthen protection for agricultural operations and stabilize the income for farmers.
Art. 3
1.“Agricultural insurance” means an insurance coverage that is announced by the competent authority to make up for actual or presumed losses caused by natural disasters or other events to the subject matter insured.
2.“Subject matter insured” means an item related to a product of the agriculture, forestry, fishery or animal industry business.
3.“Insurance enterprise” means an entity approved by the Financial Supervisory Commission that has been established and registered in accordance with the law to engage in the insurance business.
4.“Insurer” means an insurance enterprise and a farmers’ or fishermen’s association that has a right to claim a premium upon entering into an agricultural insurance contract and is liable for indemnification in accordance with the contracted insurance obligations when an insured hazardous incident occurs.
5.“Proposer” means a person having an insurable interest in the subject matter insured who applies with an insurer to enter into an agricultural insurance contract and is obliged to pay a premium.
6.“Insured” means a person actually engaged in agriculture, forestry, fishery or animal industry business who, upon incurring damage as a result of an insured incident, enjoys the right to claim indemnification. A proposer may also be the insured.
Art. 10
The Council of Agriculture (COA), Executive Yuan may provide a subsidy to the proposer’s premium for the agricultural insurance.
The recipient, rate, amount, application procedure, issuance, rescission of subsidization and other matters to be complied with for the premium subsidization specified in still shall be prescribed by the COA.
The rate of subsidy shall be determined according to the subject matter insured and the type of insurance. During the five years after the enforcement of this Act, the upper limit shall be fixed at 75%; from the sixth year of the enforcement, the upper limit shall be 60%. However, the foregoing shall not apply to mandatory insurance.
Art. 11
The COA shall assist the farmers in the development of agricultural insurance products. The COA may provide subsidization to the surcharge incurred by the insurer in the handling of agricultural insurance or provide incentive rewards.
The recipients, qualifications, review procedures and basis, subsidization and rescission of subsidization or incentive rewards and other matters to be complied with for the subsidy or incentive rewards specified shall be prescribed by the COA.
Art. 12
The risk spreading and management mechanism shall be administered by the Agricultural Insurance Fund of the COA; the risk transferred by the insurer shall be assumed by the foregoing fund, ceded to domestic or foreign reinsurers or handled in the manner prescribed by the COA.
With respect to the risk spreading and management mechanism, the COA shall, in consultation with the Financial Supervisory Commission, prescribe regulations governing the risk assumption limit or rate, insured amount, insurance premium rate, provisions for various reserve funds and other matters to be complied with.
Art. 13
The Agricultural Insurance Fund shall conduct the following activities:
1.Matters on re-insurance, risk assumption and risk spreading of agricultural insurance;
2.Matters on fund income and fund utilization;
3.Establishment and maintenance of the agricultural insurance information system;
4.Education and training of loss adjustment personnel and establishment and management of human resource database; they may handle loss adjustment matters upon appointment by the insurer;
5.Education and publicity of agricultural insurance;
6.Establishment of channels for assistance, consultation and complaint for the proposer and the insured of the agricultural insurance; and
7.Promotion of other matters related to agricultural insurance.
With respect to the Agricultural Insurance Fund, the charter of endowment, fund utilization and other matters to be complied with shall be prescribed by the competent authority.
Art. 14
The sources of funds for the Agricultural Insurance Fund shall be as follows:
1.Endowment by the government;
2.Reinsurance premium income received from agricultural insurance products;
3.Interest and returns on capital;
4.Income from donations;
5.Obtaining loans or financing from financial institutions; and
6.Other sources of income.
With respect to the endowment by the government specified in Sub-paragraph 1 of the preceding paragraph, the competent authority shall allocate an annual budget of NT$10 billion (Approx. US$337.1 million); thereafter, it shall continue to allocate and budget for the foregoing fund based on the required underwriting capacity and the extent of loss.
Art. 15
Tax reduction and exemption: Upon the issuance of a certificate by the Agricultural Insurance Fund.
The donations specified may be catalogued as itemized deduction or expenses in the tax return for that year in accordance with Art. 17 or 36 of the Income Tax Act.
Art. 16
An insurer may be exempted from business tax and stamp tax for handling agricultural insurance in accordance with the Act.
All accounts, receipts, revenue and expenditures of the Agricultural Insurance Fund for the handling of agricultural insurance in accordance with this Act shall be exempted from taxation.
Tax preference specified in the two preceding paragraphs shall be limited to fifteen years. Before the period expires, the Executive Yuan may extend the tax preference period once for a maximum period of fifteen years taking the actual circumstances into consideration.
Art. 29
A farmers’ or fishermen’s association that handles agricultural insurance in accordance with Art. 58 Par. 2 of the Agricultural Development Act prior to the enforcement of this Act shall be the insurer from the enforcement date of this Act and shall be governed by this Act in the handling of agricultural insurance.
Source: Agricultural Insurance Act, Council of Agriculture, Executive Yuan, 2020
Farmers retirement saving regulations
Table 3. Summary of Farmers Pension Act
Content
Issue
Remark
Art. 1
The specific legislative intent of this Act is to encourage farmers to save money for their old age, enhance guarantees of the quality of life for retired farmers, stabilize rural society, and promote rural economic development.
Art. 3
Farmers’ pension shall be comprised of monthly payments from farmers and the Council of Agriculture (COA), Executive Yuan. Farmers who meet the following two qualifying criteria can, based on this Act, make payments into farmers’ pensions:
1. Those who actually cultivate the land, are less than 65 years old, and are covered under Farmers Health Insurance (FHI).
2. Those who do not receive payments for the elderly from relevant social insurance.
Farmers mentioned in the preceding Paragraph who make payments into a farmers’ pension based on this Act shall, during the period of such payments, continually be covered under FHI.
Art. 7
The monthly payments of farmers shall be calculated by the COA. It will only be after a farmer makes payments into his/her farmers’ pension that the COA will, based on the amount paid into the farmers’ pension by a farmer, make a similar payment each month.
Monthly payments made by farmers into farmers’ pensions shall not be calculated as taxable income from self-employed farming, fisheries, animal husbandry, forestry, or mining for the year.
Art. 9
Art. 10
Farmers may apply to the Farmers' Association in May or November each year to adjust the contribution rate. The association shall notify the Bureau of Labor Insurance before the end of the month if the application is accepted. The adjustment shall take effect from the first day of the following month of notification.
Art. 14
A farmer who has made a farmer's retirement savings following this Act may claim the savings when he/she reaches 65.
Art.15
The method of receiving and calculating the farmer's retirement savings is the retirement account's principal and accumulated income. The amount calculated based on the average remaining life and interest rate based on the annuity life table is paid regularly monthly. The income from the farmers' retirement savings in the preceding paragraph shall not be lower than the income calculated based on the local bank's two-year fixed deposit interest rate; if there is any deficiency, the state treasury shall make up for it.
The calculation of the annuity life table, average remaining life, interest rate, and amount specified in the first paragraph shall be drawn up by the Labor Insurance Bureau according to the national, aboriginal, and disabled status and submitted to the competent authority for approval.
Art. 16
Farmers who are under 65 years old and have one of the following circumstances may apply for farmers’ retirement savings:
Art. 17
If a farmer dies before applying for the farmer's retirement savings, his survivor or the designated applicant shall apply for the farmer's retirement savings once.
Those who have received the farmers' retirement savings shall stop issuing their retirement savings if they die before the average remaining life specified in Article 15 Par. 3 or the claim period specified in Par. 2 of the preceding Article. The remaining amount settled in the retirement savings account shall be recovered by the survivor or the designated claimant.
Art.18
The order of priority of heirs for collection of farmers’ pensions as stipulated in the previous Article shall be as follows: (1) spouse and children; (2) parents; (3) grandparents; (4) grandchildren; and (5) siblings. (Par. 1)
After a farmer dies, the principal and accumulated income in the individual farmers’ pension account shall, in any of the following situations, be transferred to the farmers’ pension fund:
1. There are no heirs as described in Par. 1 nor is there any designated collector.
2. The right to apply to collect the farmers’ pension of the heirs as described in Paragraph 1 or of a designated collector has lapsed because of time limitations.
Art. 19
When farmers or their heirs or designated collectors apply for farmers' retirement savings, they should fill in an application form, attach relevant documents, and submit them to the Labor Insurance Bureau in the first paragraph of Art. 8 of the Farmers' Association.
Art. 20
Farmer’s Retirement Savings Fund, and the farmers or their survivors or designated applicants requesting the Farmer’s Retirement Savings Fund. The rights shall not be assigned, seized, offset, or provided for guarantee.
Farmers who apply for farmers' retirement savings by the provisions of these Regulations may submit a certification document issued by the Labor Insurance Bureau and open a particular account with financial institutions to deposit farmers' retirement savings. The deposits in the particular account mentioned in the preceding paragraph shall not be used to target offset, seizure, guarantee, or enforcement.
Art. 21
The Farmers’ Association failed to notify the Bureau of Labor Insurance to withdraw the farmers' retirement savings, adjust the withholding ratio, or stop the payment of the farmers' retirement savings by Art. 8, Pars. 2, 10, or Art.12, Par.1.
Those who cause damage to farmers shall be liable for compensation. The right to claim in the preceding paragraph shall be extinguished due to non-exercise for two years from the day the farmers become aware of the damage; the same is true for those more than five years after the damage occurs.
Art. 24
The farmers' retirement fund shall not be seized, used for the guarantee, or used for other purposes except for the payment of farmers' retirement savings and investment.
The competent authority shall draft the management, use and profit methods, and loss distribution and submit it to the Executive Yuan for approval.
Art. 25
Bureau of Labor Insurance and Bureau of Labor Funds
It shall separate accounts for the financial income and expenditure of the farmers' retirement savings and farmers' retirement funds and handle them separately from other businesses they handle; their related accounting reports and annual accounts shall be handled by relevant laws and regulations and shall be consolidated by Bureau of Labor Funds and reported to the Council of Agriculture for reference.
Art. 26
The income and expenditure, use, accumulated amount, and financial statements of the Farmer's Retirement Fund.
It shall be reported to the Competent Authority monthly by the Bureau of Labor Funds, and the Competent Authority shall make an annual announcement.
Art. 30
All account books, vouchers, and business income and expenditures of the Bureau of Labor Insurance and the Bureau of Labor Funds for the businesses specified in this Act are exempt from taxation.
Source: Farmers Pension Act, Council of Agriculture, Executive Yuan, 2021
DISCUSSION AND CONCLUSION
After long consecutive years, the Council of Agriculture amended the Interim Regulations on Welfare and Allowance for Elderly Farmers (老年農民福利津貼暫行條例2018), Agriculture Insurance Act (農業保險法 2020) in May 2020, and the Farmers Pension Act (農民退休儲金條例 2021) as new legal retirement savings program starting from December 22nd, 2021 under the Council of Agriculture, Executive Yuan.
The Regulations on Farmers' Retirement Savings (Farmers Pension Act), the Interim Regulations on Retirement Welfare and Allowance for Elderly Farmers and the Agricultural Insurance Act, the three laws jointly protect Taiwan farmers' lives. Supposed Taiwan farmers encounter natural disasters, man-made disasters, such as typhoons, droughts, or injuries, pregnancy and childbirth, and their incomes stability are affected; the Taiwan government shall fully support and protect the farmers living under those circumstances. The relevant conditions include that the insured salary is NT$25,250 (approx. US$852) of the basic wage of the laborer (refer to Art. 7 Table 3) (with an average increase of 2% per year) (DGBAS, 2022), the fund return of this insurance is up to 10% (refer to Art. 7 Table 3), and the average remaining life of the Taiwan farmer after the age of 65 is 20 years, which can be received every end of month before the age of 85.
In addition, the Taiwan government also provides NT$7,000 (approx. US$236) as welfare allowance for the elderly farmers which also support elderly farmers financially. While farming risks are also protected under the Agriculture Insurance Act (refer to Table 2). Taiwan has labor insurance regulations for laborers, insurance for civil servants, farmers insurance, and the National Pension Law for everyone, while agricultural insurance and labor insurance are relatively complete, with guaranteed births, injuries, and subsidies for pregnancy and childbirth (refer to the Labor Pension Act, 勞工退休金條例, 2019).
REFERENCES
COA. 2018. Provisional Act Governing the Welfare Allowance for Elderly Farmers. Council of Agriculture, Executive Yuan, ROC, Taiwan
COA. 2020. Farmers Pension Act. Council of Agriculture, Executive Yuan, ROC, Taiwan
COA. 2021. Farmers Pension Act. Council of Agriculture, Executive Yuan, ROC, Taiwan
DGBAS. 2022. Taiwan Basic Salary Statistical Data .行政院主計總處, Taiwan Directorate General of Budget, Accounting and Statistics, Taipei.
MoL. 2019. Labor Pension Act 2019. Ministry of Labor, Executive Yuan, ROC, Taiwan
NDC. 2022. Aging Time Populations高齡化時程 National Development Council 國家發展委員會, Executive Yuan, ROC, Taiwan
TIER. 2022. Taiwan Economics Editorial Current Situation and Adjustment Direction of Basic Salary 2022 Taiwan Institute of Economics Research, Taipei