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• actively disseminating information and raising awareness of obligations, particularly among informal establishments;164 • devising incentives (both at policy and administrative levels) for unregistered businesses and workers to join (see below).
163 Similarly, the ISSA Guidelines on Administrative Solutions to Coverage Extension are heavily weighted toward facilitating the incorporation of difficult-to-cover groups into contributory arrangements. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 91 |
International Social Security Association (ISSA), (2019c) 164 Awareness raising is key to the success of all social protection schemes, contributory and non-contributory alike, and must target people at young ages, as well as workers, employers and individuals who are entitled.
A detailed discussion of the key types of information, channels for dissemination, and examples of successful practices can be found in ILO, (2019b), Section 3. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 106 |
4 Frontline ‘street level’ governance 59 • collaborating with social partners and financial services actors to find joint solutions to contribution collection challenges.
• taking on a more active role in contribution calculation, payment, and reconciliation (discussed below).
• ensuring inspectors are adequately empowered and capable of performing their duties.
• to the extent possible, automating the process from end to end. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 93 |
Several countries are taking a proactive role in facilitating the payment of contributions which often involves incorporating previously excluded groups.
For example, many social security institutions are increasingly relying on ICT-based solutions to facilitate contribution collection, through improved data exchange among the key parties involved, as described in Box 4-2. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 67 |
Box 4-2: ICT-facilitated data exchange for contribution collection and compliance Collecting contributions in an efficient and transparent way is among the most fundamental challenges of contributory schemes.
The more that the social security institution can do to facilitate calculation and payment of contributions by employers, the better.
While the burden of calculating contributions was traditionally on employers, more and more countries are shifting the responsibility to social security agencies. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 91 |
This process requires efficient and transparent data exchange between employers and social security agencies on payroll and contributions, where employers provide payroll data and then validate and reconcile contributions owed.
Currently, the mechanism is used in a wide range of countries: Argentina, Barbados, Brazil, Canada, France, Germany, Italy, Japan, Malaysia, Mauritius, Mexico, Morocco, the Philippines, Saudi Arabia, Singapore, Spain, the UK, and Uruguay. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 99 |
Other forms of ICT-based integrated mechanisms of contribution collection include: • Exchange between social security institutions and external bodies, such as the tax authority, that may be responsible for contribution collection (Argentina, Austria, Azerbaijan, Barbados, Belgium, Cameroon, Canada, China, Estonia, France, Germany, Holland, Italy, Jordan, Kyrgyz Republic, Mexico, Morocco, Panama, Saudi Arabia, Uganda, and the UK) • Integrated contribution collection across multiple social security institutions (Republic of Korea and France) • Integration of contribution collection and banking and financial services institutions (China, Mexico, Panama, the Philippines, Thailand, and Uganda). | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 151 |
Source: Kounowski (2012).
In addition, many countries are moving to integrate benefit and service delivery through a single- entry points, so-called ‘one-stop shops’ or single window services (SWS).
Often implemented at local levels (through local branches of ministerial departments or social security offices, or even through local governments). | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 77 |
Examples can be found in Mauritius, and Mongolia, among others.165 These service centres are a key component of coordination at the operational level and aim to provide rights holders with a simplified means of accessing multiple services, including social security benefits but also, potentially, other government services ranging from the tax system to housing benefits, to employment services. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 77 |
In particular, many countries have moved toward integrating social security contributions and tax collection, especially in Europe and North America, but increasingly in low- and middle-income countries.166 For example, the Fiji National Provident Fund and the Revenue and Customs Authority developed a Joint ID Card for members and taxpayers.167 This can increase efficiencies and improve contribution collection, while also improving employers’ and workers’ experience with both systems. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 97 |
165 See United Nations Development Group (UNDG) and International Labour Organization (2016) 166 Examples include Albania, Argentina, Australia, Bosnia and Herzegovina, Bulgaria, Canada, Croatia, Estonia, Finland, Hungary, Ireland, Italy, Latvia, Republic of Moldova, Montenegro, the Netherlands, New Zealand, Norway, Romania, Slovakia, Slovenia, Sweden, the UK and the US.
ILO, (2011), paragraph 381).
167 See the case study on Mauritius and Fiji in this report series. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 144 |
4 Frontline ‘street level’ governance 60 In fact, some countries have always relied on close collaboration between revenue authorities and social security institutions. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 34 |
This is the case in Mauritius, where the MRA collects contributions on behalf of the Ministry of Social Security and the Ministry of Labour (for unemployment benefits).168 And, several countries in South America, including Argentina,169 Uruguay and Brazil have also experimented with increased integration of tax and contribution collection, particularly for certain difficult-to-cover groups like the self-employed.
The results in terms of coverage extension have been noteworthy (Box 4-3).
168 Ibid. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 114 |
168 Ibid.
169 See the case study on Argentina in this report series.
4 Frontline ‘street level’ governance 61 Box 4-3: The Monotax and coverage extension in Argentina and Uruguay Some countries in Latin America have had success by linking social contributions more closely with the tax system.
The so-called ‘monotax’ systems in Argentina, Uruguay and Brazil offer lower overall rates to small contributors (self- employed and small businesses). | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 111 |
In Argentina, self-employed persons can enrol in the simplified contribution collection programme and pay a flat contribution ranging from $499.31 to $1,279, depending on their declared earnings, with exemptions for low-income workers.
This contribution covers all social security and tax obligations in exchange for immediate health coverage and all other contributory social security benefits. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 82 |
Participation rates under the monotax regime rose from around 600,000 in 1998 to almost 3.5 million in 2019, an increase of more than 400 per cent.
Moreover, the increase far exceeded the pace of new job creation over the same period, which increased at a rate of 64 per cent, attesting to the strong effect of the monotax system in driving coverage extension (Figure 4-1). | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 109 |
Figure 4-1: Increase in social insurance membership under the monotax regime vs new job creation, Argentina (1998- 2019) In Uruguay, a similar system exists whereby self-employed persons and persons employed in microenterprises with up to 3 partners, provided their annual earnings are below a certain threshold, can enrol in the Monotributo and pay a single monthly contribution for social security. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 95 |
Participation in the monotributo scheme increased dramatically, by 1,200 per cent, between 2006 and 2018, as shown in Figure 4-2.
Figure 4-2: Increase in monotributo participation, Uruguay (2006-2018) Source: Chirino, (2019).
Many contributory systems are moving services online and encouraging mobile contribution payments.
For example, the Mauritius Revenue Authority offers a “One-Stop Shop” for employers to file Pay as You Earn (PAYE) as well as all social security contributions. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 145 |
Employers – including 4 Frontline ‘street level’ governance 62 employers of domestic employees — can submit a new joint PAYE/NPS return online sing a unique ID and password. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 44 |
In addition, a mobile app called “MRAeasy” facilitates payment of contributions among small businesses (less than 10 employees) and employers of household employees.170 Similarly, in Fiji, the National Provident Fund has a free mobile app that allows fund members to access information about their accounts and eligibility for benefits,171 while employers can submit monthly contribution schedules online. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 85 |
Finally, in Kenya, mobile payment of contributions is the preferred method for voluntary contributors, while regular contributions are collected from employed workers and their employers either by the employer’s cheque or through direct bank channels.172 In addition to administrative solutions like simplified contribution regimes and increased use of online and mobile technology, countries are constantly experimenting with the use of incentives to encourage and facilitate broader incorporation into contributory schemes to complement efforts at enforcement. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 94 |
While some of these require changes at the policy level, other incentives can take a wide variety of forms and have met with varying degrees of success.
Detailed experiences have been thoroughly covered in existing literature and will not be repeated here,173 but a few of the most prominent are noted: 170 MRA (2018).
See also the Mauritius and Fiji case study in this report series.
171 FNPF (2020) 172 See the Kenya case study in this report series.
173 See e.g.
ILO, (2019b, 2019c); OECD, (2018). | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 159 |
173 See e.g.
ILO, (2019b, 2019c); OECD, (2018).
4 Frontline ‘street level’ governance 63 • Contribution or premium subsidies for workers with low or irregular incomes.
Subsidizing contributions lowers the effective cost of joining for workers who lack contributory capacity. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 92 |
However, subsidies are often expensive.174 Depending on how they are financed, they can either jeopardize the financial sustainability and integrity of social insurance funds or, if they are financed from general revenues, can be highly regressive in contexts of low contributory coverage, when state resources are arguably better spent on tax- financed benefits for large informal sectors.
• Leveraging other social security benefits as incentives. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 100 |
There is growing interest in the use of additional social security benefits as incentives to join contributory schemes.
This may involve extending a ‘package’ of short- term benefits (e.g., maternity benefits or health insurance coverage), potentially under special rules or schemes, e.g., for the self-employed or domestic workers.
The enticement of immediate or short-term benefits can reduce the myopia that is an obstacle to joining social insurance when core benefits are perceived as unlikely (e.g. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 111 |
disability) or distant (e.g.
old age).175 In addition, benefits for dependants or elderly parents can be used to attract workers to social insurance, as has occurred in China (Box 4-4) and Uruguay with respect to health insurance under the monotax.
Notably, even absent an explicit policy incentive, social security agencies can use innovative communication around existing benefits to reinforce the value for money arguments behind paying contributions.
• Waiving or reducing penalties for non-compliance. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 114 |
Sanctions for non-compliance can be steep, but some countries have relaxed rules if employers register employees.
For example, Argentina reduces fines for violations contingent on regularization of workers.176 Depending on the context, these measures do not rise to the level of policy or legal reforms and may be possible through regulatory changes.
174 See e.g.
(OECD, 2018). | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 97 |
174 See e.g.
(OECD, 2018).
Some have estimated that covering agricultural workers through subsidies can cost 30 to 80 per cent of the total cost of social security benefits ISSA (2012) cited in ILO, (2019b).
In Viet Nam, because contributions for the voluntary system are so high (nearly 30 per cent of earnings), it was found that subsidies would need to be 90 per cent of the contribution to prevent the relative increase in near-poverty rates from rising above 5 per cent.
McClanahan et al., (2019). | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 155 |
McClanahan et al., (2019).
175 A recent study examined the potential of contributory child benefits to offset the welfare loss associated with a contribution in Viet Nam.
McClanahan and Gelders, (2019).
176 ILO (2019c) Box 4-4: Attracting young workers to social insurance through social pensions in China.
Prior to the 1990s, an earlier voluntary rural pension scheme had stagnated, largely because it contained no incentives. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 127 |
In contrast, the new rural pension schem introduced in 2011 with the new Social Insurance Law embeds strong incentives.
Among other features, the new scheme: • Introduces strict quotas for local authorities.
• Contains a tax-financed and contributory (individual account), although the components are indivisible, i.e., receipt of the tax-financed component requires 15 years of contributions.
• Contains flexible scales for contribution levels including a possibility of buy back. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 115 |
• Offers heavy subsidies for the contributory component for vulnerable groups and regions.
• In pilot provinces, non-contributors can receive a social pension if their children have contributed a minimum of CNY100.00, once per year, serving as a strong incentive for young workers.
Both rural and urban pension schemes were merged in 2014, with an average contribution rate of CNY 100.00 (US$ 16.0) per month. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 112 |
By the end of 2014, approximately 70.6 per cent of eligible people contributed to at least one pension insurance programme and now nearly 100 per cent of older rural residents receive a pension.
The reform is not without challenges.
Because only a minimum contribution is required for the granting of a social pension, contributions are likely to be insufficient to cover the cost of future adequate pension payments. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 90 |
Moreover, the benefit level of the basic pension remains very low, at CNY 70.00 per month, which is equivalent to slightly over 1.5 per cent of GDP per capita.
Sources: ISSA (2013); Zhang and Wu (2016); ISSA/SSA (multiple years).
4 Frontline ‘street level’ governance 64 • Making contributions voluntary. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 98 |
The temptation is strong to make contributions voluntary in contexts of high informality and weak mechanisms to support widespread income declaration, but evidence is mounting that voluntary schemes do not significantly increase coverage. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 41 |
For example, in Viet Nam, after more than ten years of allowing voluntary participation, only around 300,000 people had enrolled, representing only 1.3 per cent of the total uninsured workforce and only 0.54 per cent of the total workforce.177 In contrast, compliance has steadily increased among firms and workers covered under the mandatory system – from 2004 to 2017, the number of people employed by formal enterprises grew by some 11 million, from 12 per cent of the labour force to 26 per cent of the labour force, reflecting the fact that compliance enforcement, when diligently pursued and adequately resourced, can produce big results.178 Finally, labour, and social security inspections are a vital governance mechanism to ensure compliance with social security obligations. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 190 |
It is important to note that the mandate of labour inspectors is determined by law and may or may not include social security contribution compliance enforcement and may therefore require reforms at higher levels. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 38 |
However, the ILO highlights the proactive role that labour inspectors can and should play in identifying legal deficits, noting that, “Actually one of the main functions of labour inspectors is to bring to the notice of the competent authority defects or abuses not specifically covered by existing legal provisions.”179 Therefore, where regulations on enforcement of social security contributions are lax or not being effectively enforced, labour inspectors would have a role in bringing this to light. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 100 |
Furthermore, as key frontline representatives of the system, inspectors’ roles go beyond enforcement and ideally involve communication and awareness raising about obligations and how to become compliant.180 In this way, inspection is also a critical interface for coverage extension – where social security and labour inspectors can take a proactive role with respect to registration, enrolment, and regularization of workers in the informal economy. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 85 |
When inspectors uncover non-compliance and bring a previously informal or non-compliant firm in line with regulations, this extends coverage by bringing new workers into the system and/or by uncovering underpayment, thereby improving financial solvency of the social security system and, by extension, adequacy of benefits for those who are enrolled.
There is wide diversity in the roles, functions, and modus operandi of inspectors around the world. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 100 |
While a thorough review of inspection processes is outside the scope of this study,181 we note here several examples where countries have adapted the inspection process to the specific needs and circumstances of non-standard workers. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 42 |
For example: Argentina’s special scheme for rural workers guarantees decent work conditions, including access to social security, and requires inspectors to ensure this;182 in China, the Social Insurance Law of 2010 extends social protection to rural and migrant workers;183 in Paraguay, specific schemes for atypical forms of employment also adapt inspections to their circumstances;184 in Nicaragua, the General Law on Labour Inspections of 2008 specifically recognises the role of inspections in protecting the rights of informal economy workers;185 and in Uruguay, a special section in the Labour and Social Security Inspectorate is responsible for supervising the respect of labour and social security standards for domestic workers.186 177 McClanahan et al. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 178 |
(2019).
Estimates based on Vietnam Social Security (VSS) administrative data.
178 Galian (forthcoming) 179 ILO (n.d.) 180 Ibid.
181 Inspection Mechanisms Research Note background paper for this project.
182 Original reference: Ley 26.727 Régimen de Trabajo Agrario; ILO (2018b), p.34.
183 Ibid.
184 Ibid.
185 Ibid.
186 Ibid.
4 Frontline ‘street level’ governance 65 Þ Therefore, contribution collection and compliance involve a combination of enforcement and facilitation. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 170 |
Þ For compliance enforcement to serve the broader goal of coverage extension, social security institutions and labour inspectorates should shift from a reactive role to playing a proactive role in extending coverage through the facilitation of contribution collection and compliance for workers in the informal economy.
Þ They can do so by leveraging ICT-based solutions, offering single window services, and strengthening collaboration with revenue authorities. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 84 |
4.2 Horizontal coordination at the operational level As mentioned, horizontal coordination is important both at the policy level as well as at the operational level.
Many issues related to horizontal operational coordination have already been addressed in the mid-level governance discussions, particularly related to the development of integrated MISs across social protection programmes that are also linked up with external databases. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 81 |
In addition, aspects of horizontal operational coordination have already been highlighted in discussions of increased collaboration between institutions to facilitate contribution (and tax) collection and single window services. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 33 |
The UNDG Social Protection Coordination Toolkit (2016) highlights the importance of strengthening these and other types of coordination, summarizing five steps for improved coordination in social protection at the operational level, including promoting the importance of local social welfare officers; promoting the installation of shared identification databases; supporting the implementation of shared selection systems; developing simplified delivery mechanisms based on shared front offices; and developing a Single Window Service. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 91 |
These are shown in Figure 4-3.
Figure 4-3: Five steps to improve operational-level horizontal coordination.
Source: Reproduced from Figure 17 in (United Nations Development Group (UNDG) and International Labour Organization, 2016).
The importance of having an adequately staffed and trained cadre of social workers and social welfare officers cannot be over-emphasised. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 94 |
These key workers “are the frontline providers of social protection who are tasked with identifying vulnerabilities among populations and providing social transfers as well as other social support.”187 They are often required to have a bird’s eye view of the benefit structure within a country in order to be able to advise potential beneficiaries regarding eligibility for different programmes and provide crucial support in the application and registration process, especially for those who are face higher administrative barriers to coverage. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 98 |
Social workers are also important actors in facilitating complaints and appeals processes (see Box 4-9).
Failure to invest properly in adequate staffing and training can undermine basic good governance at the operational level.
187 Ibid., p. 46.
4 Frontline ‘street level’ governance 66 Importantly, however, the roles and functions of social welfare officers varies according to high-level scheme design. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 96 |
Poverty targeted schemes and schemes that use conditionalities often require larger numbers of social workers to be able to enforce conditions and verify eligibility at household level, which can be costly, and moreover, does not necessarily improve coverage. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 49 |
For example, in Mauritius, to meet the additional administrative requirements for case management linked to the introduction of conditionalities as part of a new set of Empowerment Programmes, UNDP recommends increasing the current social workforce by more than three times, at an annual cost of MUR 50 million.188 While coordination in information management and selection processes are taken up elsewhere, it is important to emphasise here the efficiency gains that can come from having shared front offices and/or a single window service. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 110 |
From the beneficiary’s perspective, the social protection system can seem intimidating and unwieldly, especially when there are multiple benefits administered by different agencies and ministries.
Centralising access to the system at a single administrative point, using local unit structures, can dramatically improve their experience with the benefits system. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 67 |
Using the example of Mauritius again, all citizens are made aware that the first point of contact for benefit application and other questions is the Ministry of Social Security (MoSS), even for supplementary social assistance benefits, where despite the establishment of new programmes with divergent institutional arrangements, officials recognised and capitalised on the administrative capacity, experience, and reach of the MoSS.189 Finally, horizontal coordination at the operational level is vitally important when the social protection system is required he react to and anticipate large-scale covariate shocks and crises, such as financial crises, drought, natural disasters, or epidemics/pandemics such as COVID-19. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 147 |
A so-called “shock-responsive social protection” system can flexibly expand, including horizontally and vertically, in the context of shocks.190 This requires coordination not only within the social protection system, but also with wider actors implicated in the shock response, such as health authorities, humanitarian organizations, donors, among others. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 76 |
For example, in Argentina, immense pressure to respond rapidly and efficiently to the pandemic awakened long dormant coordination structures such as the Social Development Federal Council (Consejo Federal de Desarrollo Social, COFEDESO), which had been dissolved since 2002 but re-surfaced with the mission of building consensus among different jurisdictions on social policies, in particular with regards to social assistance, social promotion, social inclusion, food security, poverty reduction and the development of equal 188 UNDP (2016). | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 116 |
See also the Mauritius and Fiji case study in this report series.
189 See the Mauritius and Fiji case study in this report series.
190 O’Brien et al.
(n.d.); OPM (2017) Box 4-5: Mauritius’ single window through MoSS frontline offices The MoSS has 46 Social Security Offices in Mauritius (including on Rodrigues) where citizens can interact with frontline workers, submit applications for benefits and communicate questions and complaints. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 123 |
Once a potential beneficiary applies, the Ministry determines eligibility in accordance with legislation and regulations and payments are issued, mainly via bank transfer, where beneficiaries provide bank account numbers and details upon application.
For social assistance benefits, the eligibility determination is increasingly carried out in collaboration with the Social Register of Mauritius (SRM) and may involve a visit to a household by welfare officers. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 85 |
Once processed, citizens receive a written notice informing them of the Ministry’s decision.
In addition, since October 2018, SRM registration is also carried out at local MoSS offices.
Once registered and eligibility is determined, MoSS sends the information to MSIEE, which proceeds to sign Marshall Plan Social Contracts with eligible households. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 79 |
Currently, SRM Child Allowance are the only SRM benefits that are paid by MoSS, but this may change in line with the potential phase-out (conversion) of remaining Social Aid benefits to the Marshall Plan.
Source: MoSS (2020), MoSS (n.d.).
See also the Mauritius and Fiji case study in this report series. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 84 |
4 Frontline ‘street level’ governance 67 opportunities for the most vulnerable sectors.191 While much of the strategic vision for shock- responsive expansion occurs at the higher (policy and planning) levels of governance, the ability of the system to activate plans in the immediate aftermath relies on having clear and seamless governance and administrative processes at the operational level, as explained in Box 4-6. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 90 |
According to the ILO, already, more than 200 countries have implemented some 1,500 social protection measures in response to COVID-19, which vary significantly in terms of social protection function and instrument.192 The success of these measures will hinge on having effective governance systems in place at all levels. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 70 |
Box 4-6: Shock-responsive social protection and governance A growing literature explores the ability of social protection systems to flexibly anticipate and respond to large-scale (covariate) shocks, mitigating the impact of shocks on individuals, families and facilitating faster recovery in the broader society and economy. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 70 |
OPM (2018) have identified five options for social protection systems to respond to shocks: 1) Design tweaks – making small adjustments to the design of routine social protection interventions, such as waiving conditionalities, altering payment protocols, etc.
2) Piggybacking – using elements of an existing social protection programme or system while delivering a separate emergency response, including ‘borrowing’ beneficiary lists, staff, databases, etc. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 104 |
3) Vertical expansion – temporarily increasing the value or duration of benefits for existing beneficiaries.
4) Horizontal expansion – temporarily increasing the number of recipients in an existing social protection programme.
5) Alignment – aligning social protection and/or humanitarian interventions.
Many of these responses require high-level coordination with other entities and may call for specific governance systems, such as framework agreements, that would activate in the context of a shock. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 101 |
Vertical coordination between central and local levels is particularly important in a crisis response, where different actors may be operating in different places, requiring clear lines of responsibility. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 33 |
At the operational level, between organizations and across schemes, examples of coordination mechanisms include (OPM, 2018): • Forums for data collection and analysis • Technical working groups on specific themes (e.g., shock-responsive social protection) • Cash working groups to coordinate cash assistance in emergencies.
• Disaster response groups • Alliances for advocacy and policy coordination • Temporary committees • Periodic conferences Source: OPM (2018) and O’Brien, et al.
(2017). | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 122 |
Importantly, there is strong evidence and an emerging consensus that, regardless of the nature of the crisis or shock, countries that have put in place inclusive social protection systems, with an emphasis on providing high levels coverage for core lifecycle programmes, are best able to cope with shocks when they occur.193 This is primarily because high coverage – and especially universal schemes – reach many more households than poverty targeted schemes, providing a much broader benefits infrastructure on which to “piggyback”, horizontally or vertically expand, or otherwise adapt in the face of a shock. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 118 |
Already, the evidence base is growing that COVID-19 emergency responses were more effective where systems were already in place.194 Moreover, even key figures in the World Bank, which have historically promoted poverty targeting as technocratic and efficient way of 191 Official news: https://www.argentina.gob.ar/noticias/oficializan-la-creacion-del-consejo-federal-de-desarrollo-social.
See the case study on Argentina in this report series.
192 ILO (n.d.) 193 See e.g.
(ISSA (2012); Kidd et al., (n.d). | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 160 |
(ISSA (2012); Kidd et al., (n.d).
; Kidd and Sibun, (2020); Orton and Razavi, (2020); Razavi, (2020)).
194 See e.g. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 69 |
Development Pathways for Oxfam, (forthcoming) 4 Frontline ‘street level’ governance 68 channelling limited resources to those who need them most, have recognised that universal emergency benefits are more suitable as a COVID-19 response since those worst affected are often those in the informal economy, who are usually excluded from poverty targeting are they are not deemed to be poor enough.195 Þ Therefore, improving coordination in social protection at the operational level involves promoting the importance of local social welfare officers; promoting the installation of shared identification databases; supporting the implementation of shared selection systems; developing simplified delivery mechanisms based on shared front offices; and developing a Single Window Service.196 Þ Horizontal coordination at the operational level is vitally important when the social protection system is required he react to and anticipate large-scale covariate shocks and crises and usually requires specific cross-sectoral governance frameworks for shock- responsive social protection systems. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 211 |
4.3 Facilitating payments of income transfers As part of the social contract, good governance of social protection requires that rules be established so that rights holders, stakeholders, and the state are mandated to fulfil their mutual and reciprocal responsibilities.
On the frontlines, social protection programmes — particularly income transfers —involve a (financial) transaction between citizens and the state in fulfilment of social obligations. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 96 |
This includes workers’ and employers’ obligation to pay contributions, but it also involves the state’s obligation to pay benefits in a timely and efficient way.
Very often, the payment mechanisms used within social security systems differ depending on whether the scheme is non- contributory or contributory. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 60 |
For contributory programmes, recipients are often already expected to own a financial account, and therefore, the institution delivering the scheme is generally not responsible for how members/contributors are treated by the payment service provider, and in addition, these schemes are often governed by formal legal and regulatory frameworks.197Not only are many non-contributory benefits outside of formal legal frameworks, but even where entitlements are grounded in legislation, regulatory frameworks around payments of benefits are generally weak. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 106 |
The following paragraphs focus on key issues in benefit payment in contexts where social protection is nascent, and where many recipients are interfacing with the social security system for the first time.
Since many recipients of non-contributory income transfer schemes are financially excluded, the interaction with the social protection system can serve to enhance financial inclusion. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 74 |
Governments/donors often enter contracts with payment service providers to deliver the payments on behalf of the programme.198 Payments will be either manual (cash in an envelope) or electronic (for example, the provision of a bank or mobile money account).
Electronic payments are an essential aspect of good governance as they increase transparency, improve traceability and real- time reconciliation, and reduce “leakage” and “ghost” beneficiaries (through more stringent identification documentation). | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 107 |
Schemes that employ electronic payments include Colombia’s Familias en Accion programme and Pakistan’s Benazir Income Support Programme (BISP).199 However, without appropriate financial education, electronic payments can also open beneficiaries 195 Rutkowski (2020) 196 United Nations Development Group (UNDG) and International Labour Organization (2016) 197 However, as indicated below, it is the government’s obligation to its citizens to ensure that appropriate financial and payment services legislation and regulations are developed. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 123 |
198 At the early stages of a programme, the government or donor may deliver the cash itself.
This will be a manual payment and not electronic.
199 Stuart (2018) 4 Frontline ‘street level’ governance 69 up to fraud and theft if they do not fully understand how to utilise their payment instrument and account. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 82 |
Depending on how developed the payments infrastructure is in each country (for example, the geographic presence of branches, ATMs, and agents and whether there is interoperability200), the payment service provider may be required to travel to more remote areas, by operating a “bank on wheels” model.
Recipients will therefore be required to travel to a temporary pay point at a required time and on a specific day. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 89 |
Recipients have little autonomy in these scenarios for they do not have any choice over when and where they can collect their cash transfer.
As a country’s infrastructure develops, however, it is preferable that recipients are given a financially inclusive account, which allows them to withdraw their benefit from a channel at a time that they choose. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 73 |
This evolution can be seen with Kenya’s Cash Transfer for Orphans and Vulnerable Children (CT-OVC) programme: Government officials initially paid recipients their benefits manually, but banks now provide recipients with bank accounts, and recipients can use their debit card with their bank’s local agent.201 It should be emphasised that in countries that are developing their national payment system, the financial and payment services legislation and regulation may still be underdeveloped. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 100 |
Recipients may therefore be charged excessive transactional fees or have limited access to the payment service provider’s grievance and complaints mechanism. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 29 |
In the absence of a robust legal and regulatory framework, the donor/government should develop measurable standards that should inform key performance areas of a Commercial Contract/Service Level Agreement with a payment service provider.202 Without a robust contract, contract management may prove difficult, and the government/donor may not be able to enforce that the payment service provider respects the rights of beneficiaries. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 82 |
Þ Therefore, payment systems in social protection can be important avenues to promote financial inclusion among vulnerable groups.
Þ However, the governance frameworks around non-contributory benefit payment systems in low- and middle-income countries are under-developed. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 57 |
4.4 Avenues for stakeholder participation in scheme design and management Beyond formal or structured grievance redress mechanisms which provide a way for citizens to express dissatisfaction, good governance also calls for increasing the opportunities and channels for rights holders and stakeholders to shape decision making around programme design and management. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 66 |
Historically, rules and standards governing stakeholder participation have been enshrined in international social security conventions, but many of these mechanisms have only been applied in practice to the governance of contributory schemes. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 43 |
For example, ILO Convention 102 calls for representation of stakeholders in the management of schemes,203 and indeed it is the norm for the Boards of national social security institutions to be 200 Interoperability allows a customer to, for example, use the infrastructure of a payment service provider that the customer does not hold an account with.
A payment service provider can therefore serve a customer without having a presence.
201 McKay et al.
(2020) 202 Kidd and Langhan (2019). | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 124 |
(2020) 202 Kidd and Langhan (2019).
Standards should adhere to international best practice.
For example, Sphere Association, (2018) states that paypoints should be within 5km of each recipient.
The World Bank, (2017) provides further provides a handbook for good practices for financial consumer protection. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 88 |
203 “Where the administration is not entrusted to an institution regulated by the public authorities or to a Government department responsible to a legislature, representatives of the persons protected shall participate in the management, or be associated therewith in a 4 Frontline ‘street level’ governance 70 tripartite, comprised of representatives of workers, employers and Government.204 Official channels like these are vital for garnering and sustaining support for social security, particularly as regards setting the terms and rules governing the level of ‘sacrifice’ (payment of contributions) expected by the parties involved, as well as the benefits they receive in return. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 138 |
Moreover, one of the functions of social security Boards is to separate the financing of social security from the government budget, preserving the operational integrity of contribution-based systems and insulating the schemes from competitive political processes around funding, which can be important for effective system-wide governance. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 58 |
In practice, Governments find ways to blur these lines, moving in both directions – where well-resourced social security funds act as lenders, or where social security fund deficits are financed (usually by law) from general revenues. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 53 |
The ISSA has developed extensive Guidelines on Good Governance (2019) with these organisations, including both the Board and Management, in mind.205 However, social security Boards are also highly contested, fundamentally political spaces, where interests and power behind the formal representation may or may not be balanced. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 68 |
This can result in situations where practices deviate from formal statutes, which can jeopardise the independence of the body vis-à-vis Government.206 In addition, Boards are not always legally tripartite in nature, but instead may be comprised of representatives from different Government ministries, as is the case with Georgia’s new mandatory individual account scheme,207 which severely limits the voices of social partners. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 90 |
Furthermore, the ‘interests’ of Board members and the groups they represent are not always aligned with the extension or improvement of social security and, where social partners are resistant to necessary reforms, may in fact undermine the long-term financial sustainability.
And scheme design shapes the interests of different parties. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 65 |
For example, in certain types of schemes, such as savings-based (e.g., individual accounts or provident fund) schemes that are not based on risk pooling or solidarity, workers may have an interest in withdrawing ‘their’ money early or resisting reforms that would collectivise risk, paradoxically jeopardising the ability of the system to pay long- term benefits. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 84 |
Indeed, activism by workers’ groups in Uganda has slowed reforms to the NSSF precisely for these reasons, as explained in Box 4-7.208 consultative capacity, under prescribed conditions; national laws or regulations may likewise decide as to the participation of representatives of employers and of the public authorities” (ILO, 1952, Article 72).
204 See e.g. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 93 |
204 See e.g.
International Labour Office and International Training Centre of the ILO (2010); ISSA/SSA (multiple years) 205 International Social Security Association (ISSA) (2019a) 206 International Labour Office and International Training Centre of the ILO (2010) 207 McClanahan et al.
(forthcoming) 208 For Uganda, see McClanahan et al. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 115 |
(forthcoming) 4 Frontline ‘street level’ governance 71 Box 4-7: Scheme design shapes stakeholder interests in Uganda’s NSSF Despite its name, the current National Social Security Fund (NSSF) in Uganda is structured as a provident fund, which is essentially a mandatory savings scheme offering only lump sums for narrowly defined contingencies, notably old age, disability, and survivors. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 97 |
In this system, the responsibility for ‘saving’ for the cost of incurring these common lifecycle risks is expected to be borne almost entirely by private individuals and, in the case of formally employed persons, by their employers who are required – if they comply – to pay contributions to NSSF and provide paid sick leave, paid maternity leave, severance pay, and cover the costs from work-related accidents and diseases. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 90 |
In the absence of basic protections for working-age risks, workers’ representatives demanded that an NSSF Bill “expand the scope of benefits to allow individuals with various challenges such as unemployment, sickness, and school fees to help them solve their issues…without waiting for retirement.”209 However, in a savings-based system, early withdrawal drains individual accounts leaving little to cover long-term risks. | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 84 |
Seen in this light, workers’ recent demands for so-called ‘midterm accesses to their savings from age 45 are an understandable clarion call that originates primarily from an absence of social security, rather than from a poor understanding of the value of saving for the future.
Rather than early access, broader reforms are required, reforms that would secure protection for lifecycle contingencies – like sickness and unemployment.
Source: McClanahan et al., (forthcoming). | https://docs-lawep.s3.us-east-2.amazonaws.com/1696755846392.pdf | https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2021/08/Global-overview_SP-Governance_June-2021.pdf | 108 |