The ‘Social protection and social security’ webinar took place on 29 August 2019. This was the third webinar of the USP2030 webinar series organised by socialprotection.org, in collaboration with the International Poverty Centre for Inclusive Growth (IPC-IG). Levels of social security protection are uneven worldwide although the coverage trend continues to increase. To enhance social security coverage in line with the 2030 Agenda for Sustainable Development, countries have been looking into developing innovative policies and strategies to improve their social security systems.

This webinar focused on current and future challenges, risks, innovation and opportunities related to the topic of social security. The panellists presented some specific examples in low- and middle-income countries that guided the discussion around key learnings, strategies and limitations to what has been implemented in different places around the world.

The event was moderated by Luca Pellerano (Senior Social Protection Specialist for the Arab States, ILO), alongside presenters Guillaume Filhon (Senior Social Security Technical Specialist, Project Manager, International Social Security Association (ISSA)), Laura Alfers (Director, Social Protection Programme, WIEGO), and Natalia Winder Rossi, Social Protection Team Leader - Senior Adviser, FAO).

 

You can watch the webinar recording here and access the webinar presentation here.

 

Challenges confronting social security systems

Guillaume Filhon started the webinar by giving an overview of a set of challenges that confront social security systems worldwide in the context of ongoing demographic, technological and economic transformations and risks. In the perspective of ISSA, social security is compulsory, contributive, redistributive and non-for-profit, differing from social assistance and private social insurance schemes.

In the last triannual World Social Security Forum in Panama in 2016, ISSA identified “10 global challenges for social security”, which you can learn more about in this report. The next World Social Security Forum will take place in Brussels, Belgium, from 14 to 18 October 2019.

To help tackle the listed challenges from a management perspective, ISSA’s Centre for Excellence offers a set of services to encourage, facilitate and support member institutions’ work towards administrative improvements. Knowledge on consensual social security goals can be accessed through a set of topic-related guidelines and examples of good practices and solutions.

 

Examples of challenges to social security

a. Platform and posted workers

According to Guillaume Filhon, social security schemes are based on the idea that employment is not a commodity that can be sold or bought. Rather it induces a set of responsibilities and rights. Platform employment, such as rideshare drivers, represents a counter-evolution of this idea. Platform employment innovates in terms of technology, which facilitates the mobility of workers as well as the payment for work done. This development, however, challenges the idea of territorial solidarity rooted in the establishment of social security. There are three possible responses to this challenge:

  1. Forbid these practices.
  2. Differentiate legally between platform workers who are entitled to schemes for self-employment, and platform workers, who are actually employed and deserves social security contributions as salaried workers.
  3. Develop an intermediary response that combines 1 and 2. However, there can be spill-over effects such as forcing salaried workers to become platform workers, because it is more convenient for the employer.

 

b. Financial sustainability

In terms of financial sustainability, Guillaume Filhon highlighted the following risks:

  • Demographic ageing: how to finance pension and healthcare, especially to people who are losing autonomy.
  • Employment policy: exemptions and decrease in the coverage of compulsory contribution.
  • Fraud and Evasion:  technology, increased mobility of capital, and increased mobility of workers.

 

c. Increasing private institutional debt

The number of private funds dedicated to social protection is increasing. For instance, private pension funds in some countries contribute significantly to the national GDP, making the size of private money that is invested in social protection each day more important. However, most of this investment is not efficient. The risk of increasing the institutional private debt and administrative burden is higher, because of the use of intermediaries.

 

d. Extension

The notion of extension of social security coverage was also mentioned. ISSA identifies five groups as ‘difficult to cover’: self-employed, rural workers, domestic workers, migrant workers, and women. Key points were presented in order to reach these groups:

  • Communication and partnerships with education (e.g. Uruguay and Madagascar)
  • Funding must be shared between covered people and solidarity (lump sum as contribution, benefit on demand)
  • Alignment of interests (e.g. Bolsa Familia in Brazil)

 

Social security for informal workers

Laura Alfers discussed the challenges of extending social protection to informal workers, and outlined general solutions along with specific innovative examples. Below are some data highlights on the current status of informal workers.

One of the major problems in accessing social security by informal workers is what the International Labour Organisation (ILO) calls the “missing middle”. These are people who are not covered by social assistance, which is aimed at those outside of the labour market and targeted at the most vulnerable and poor. The “missing middle” suffers from de facto exclusion (often due to difficulties in meeting contribution arrangements) or de jure exclusion (often because they are self-employed).

In this context, women informal workers are the most disadvantaged. Social services such as health and childcare are critical to income security for women. However, these services are often not worker-focused and not always adapted to the needs of the working poor.

 

Problems in extending social protection to informal workers

One of the major causes to the problem of exclusion is lack of voice in policy making, because differently from formal workers, informal workers do often not have access to structures institutionalised by the state such as industry tripartite bodies, etc. In addition, there is often lack of policy coherence towards establishing income security for informal workers. An example is when street vendors are evicted from their places of work by city governments, while at the same time national governments try to set up social security schemes for people in informality.

In terms of problems specific to many contributory social security schemes targeted at informal workers, Laura Alfers outlined the following key points:

  • Formal workers have low and irregular incomes and are often not able to contribute on a regular basis.
  • Regressive financing arrangements that do not induce informal workers to contribute.
  • Bureaucratic obstacles in the form of huge amount of paper work.
  • Reliance on voluntarism because of high self-employment that would lead to an automatic understanding of the importance of being insured.
  • Lack of trust in the state, often due to a lifetime of negative experiences.

 

Some general ideas about solutions

There is a need for a mixture of non-contributory and contributory schemes to cater to different income groups within the informal economy. Not all informal workers are poor, but they are vulnerable and in risk of falling into poverty.

There is also growing consensus that voluntary insurance schemes are not a good way to cover informal workers. The question is whether the schemes should be mandatory, incentivized, or based on co-contribution from the state.

Another idea is the notion of integrated benefit packages so that informal workers could begin to see social protection as one part of a bigger state package that they could enjoy. For instance, by linking social protection and business support.

 

Extending social protection to the rural poor

Natalia Winder Rossi focused her presentation on social protection coverage to the rural poor. Rural populations are often excluded by design or implementation from existing social protection schemes due to legal, financial, institutional and administrative barriers.

The agriculture sector (fishery, forestry, livestock, and broader range of agricultural activities) is in many countries not a formalized sector within the labour legislation. There is often reluctance to expand schemes because of concerns regarding ‘dependency’. In this context, FAO works to enhance visibility to the nature and scope of this coverage gap and identify who are the rural poor and their characteristics and needs.

 

Example: Social protection and fisheries

Small-scale fishers can be characterized by self-employed workers who fish  for their own consumption/sale in local markets, vessel-based fishers, pre- and post-harvest workers among others. There is often a poor fit between conventional modalities of social security systems and the realities of small-scale fishers.

In this context, FAO works to strengthen the economic case to expand and scale up social protection systems by mapping social protection coverage for small-scale fishers, building a case for expansion, and providing technical assistance to governments. One country example is the assistance provided to the government of Brazil around their unemployment insurance programme for fisheries, which was created as a way to support activity breaks to prevent overfishing while securing decent income for fishers.

 

Overall recommendations

A range of options can be explored in order to make social protection accessible for rural workers. Examples are:

  • Defining and adopting inclusive legal frameworks.
  • Developing flexible protection modalities, which consider the diversity of the informal sector and their specific characteristics (e.g. farmer funds)
  • Flexible contribution payments and mechanisms that consider income fluctuations.
  • Introducing subsidized pillars or contributions.
  • Reforming administrative procedures towards simplification and digitalization.
  • Adapting existing schemes to make them more relevant for rural populations

 

The webinar closed with an interesting Q&A session, accessible here.

 

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Social Protection Programmes: 
  • Social insurance
    • Social insurance - General
    • Unemployment insurance
Social Protection Topics: 
  • Governance
  • Labour regulation
  • Social protection systems
  • Universal Social Protection
Cross-Cutting Areas: 
  • Gender
  • Labour market
    • Informality
Countries: 
  • Global
Regions: 
  • Global
The views presented here are the author's and not socialprotection.org's