Government Prepares Solutions to Ease the Burden on Indonesia's Sandwich Generation

Jakarta, CNBC Indonesia - The government is taking the initiative to promote data-based policies to tackle intergenerational welfare issues through the National Transfer Account (NTA). According to the Central Statistics Agency (BPS), the National Transfer Account (NTA) is a systematic economic analysis framework for measuring how production, consumption, asset income, and transfers (such as taxes or family assistance) are distributed among age groups. NTA is seen as a tool that can also provide solutions to the sandwich generation problem in Indonesia, namely productive-age individuals who must bear the burden of children and parents. Coordinating Minister for Human Development and Culture Pratikno stated that it is very important because it concerns Indonesia’s future public policies. “NTA is very important because it addresses Indonesia’s future public policies regarding our children, our parents, and us who will grow old,” he said at Bappenas in Jakarta on Monday (6/4/2026). Pratikno explained that the sandwich generation also has its limits, so it cannot continuously bear the burden. “It is very important because the sandwich generation has limitations as well. The sandwich generation must be productive; otherwise, it cannot support those below or above. But the sandwich generation’s capacity also has limits,” he said. NTA itself can map the distribution of economic resources by age group. NTA provides an overview of economic flows according to age groups. Thus, government policies for welfare can remain optimal. The Central Statistics Agency (BPS) is also supporting the NTA in terms of data provision. Deputy Head of BPS Sonny Harry Budiutomo Harmadi said that BPS is currently conducting statistical testing for NTA so that it can be used as a national indicator in the future. “So this national transfer balance is still in the form of experimental statistics. BPS’s task is to produce one of them, official national statistics. NTA is still experimental statistics. If we are confident and tested later, NTA can become official statistics. Changing from experimental to official statistics,” he said during a presentation at the Dialogue Towards Intergenerational Welfare event at the Ministry of National Development Planning (Bappenas) office in Jakarta on Monday (6/4/2026). In addition, Sonny also described the life cycle of Indonesian society. The life cycle presented quite clearly illustrates the reasons for the occurrence of the sandwich generation. According to his presentation, per capita consumption of Indonesian citizens peaks at age 17. The amount is estimated at Rp57.48 million per capita. However, this large expenditure is not matched by income levels or earnings because they have not yet entered working age. Based on Sonny’s presentation, the age experiencing a life cycle deficit is at 16 years with Rp55.22 million per capita. Thus, young ages contribute the largest life cycle deficit figures. The aggregate deficit for young ages is recorded at Rp3,482 trillion. That deficit level will decrease as age increases and the life cycle changes from being supported by parents to independent workers. Sonny said the youth deficit cycle will on average change at age 25 to a surplus category. On the other hand, the peak of an individual being in a surplus condition is at age 42 with a value of Rp33.36 million. In general, the surplus range for Indonesian citizens is 35 years from age 25 to 60 years or when entering old age. Because elderly people in Indonesia have needs but no income. Sonny explained that to cover that deficit, intergenerational transfers or what he calls reallocation are then carried out. “Where does the financing come from to address the earlier deficit? There are two: the first is reallocation according to age. So I transfer to my father, I transfer to my children, reallocation occurs,” he said. “So ladies and gentlemen, there is an individual mechanism, transfers between individuals. An intergenerational transfer mechanism to address the shortfall due to our consumption being larger earlier,” he emphasised.