The Finance Ministry plans to seek cabinet approval this week to allow elderly people who forgo their old-age allowance to deduct the amount from taxable income as an incentive to encourage the wealthy to refuse the welfare.
The issue is expected to go before the cabinet tomorrow and would come into force from Nov 1, said an informed source at the ministry.
The portion of allowances that are refused will be redirected to a fund to raise the amounts given to the underprivileged, the source said.
Those who wish to relinquish their allowance can express their intention at sign-up locations such as district offices in Bangkok and tambon administration organisations.
A committee on old-age living allowance chaired by Deputy Prime Minister Narong Pipatanasai will consider how much each elderly Thai will receive per month.
All Thai elderly are entitled to a progressive living allowance, with 600 baht paid monthly to those aged 60-69, 700 baht to those 70-79, 800 baht to those 80-89 and 1,000 baht to those 90 and older.
The source said if 500,000 elderly people refuse the allowance, 4 billion baht would be available to increase the allowance by 100 baht a month to 3 million elderly whose income is below 30,000 baht a year.
Some 10.3 million Thais are 60 or older, 3.5 to 3.6 million of whom are low-income earners. Around 8.1 million people have registered for welfare, which costs the government 64.7 billion baht a year.
The Finance Ministry is seeking a way for Thais to maintain living standards post-retirement and it has estimated 1,200-1,500 baht per month is the minimum amount the elderly should obtain to keep their lifestyle.
The National Legislative Assembly is also deliberating a draft bill to redirect 2% of sin taxes for planned increases in old-age living allowance.
Measures to care for the growing number of elderly are among the government's priorities.
In 2015, the government successfully pushed for the establishment of the National Savings Fund, a voluntary retirement safety net for 25 million non-formal workers.
The long-awaited mandatory provident fund is set to be enforced in 2018. The law requires firms with 100 workers or more to match employees' contributions to the fund within the first four years of enforcement.
The government has forecast the number of people aged 60 and over will represent 16.8% of total population in 2020, up from 13.8% in 2015.
The figure is estimated to rise to 20% in 2025, when there will be three people of working age for each senior.