The increasing number of elderly in Malaysia calls for a more stringent policy to safeguard the well-being of the elderly. The old age protection such as the pension scheme, Employees Provident Fund and the old age cash assistance although in tact, deemed to be inadequate to eradicate elderly poverty. One possible solution to secure financial protection during old age is through social pension that provides non-labor income for the retirees or elderly with the purpose of preventing or reducing elderly poverty. This paper attempts to estimate the financial cost of social pension scheme and quantify its potential role in reducing elderly poverty in Malaysia. The financial cost of social pension scheme was calculated as a percentage to GDP. By using the 2009 household income expenditure survey, the paper estimated the potential roles of social pension in eradicating elderly poverty. Sensitivity analysis indicated that the cost social pension could be kept at an average of 1.30 percentage of GDP. The 2009 HIES data also indicated that poverty could be eventually be eradicated with social pension while cost of the social pension was kept at reasonable levels.