Introduction to social protection Valerie Schmitt and Celine P. Bista ILO 5 September 2013, Ulaanbaatar

Key questions What is social security? Typology of social transfers Social security as a human right ILO’s standards on providing social security Extending social security to all Social Protection Floor ILO Recommendation on Social Protection Floors Linkage with employment SPF as an investment Some examples in Asia

Social Security, principles and definitions of the international labour standards

What is social security? People face contingencies during their life cycle, which have financial consequences Social security is provided to members of a society against the economic and social distress caused by such contingencies Maternity Sickness / ill health Unemployment Work injury Medical care Families with children Invalidity Death of the breadwinner Old age Life cycle

What is social security? THE PROTECTION PROVIDED BY SOCIETY To compensate for the loss of income & covers health care expenditures To facilitate access to social services and fulfill basic needs FINANCIAL SUPPORT ACCESS TO SERVICES SOCIAL TRANSFERS

Typology of social transfers Contributory Non contributory Compulsory Voluntary Targeted Non-Targeted  Social Insurance  Targeted social assistance  Universal schemes Extension of social insurance to informal sector  Micro-Insurance http://www.social-protection.org/gimi/gess/ShowTheme.do?tid=11&ctx=0

Social security as a human right Social security is a human right (Article 22 Universal declaration of human rights) Flagship Convention 102, 1952 Recommendation 202, 2012 reaffirms the universal right to social security

ILO’s standards for implementing the right to SS C 118 Equality of Treatment (Social Security) Convention, 1962 C 157 Maintenance of Social Security Rights Convention, 1982 C 168 Employment Promotion and Protection against Unemployment Convention, 1988 C 121 Employment Injury Benefits Convention, 1964 C 128 Invalidity, Old-Age and Survivors' Benefits Convention, 1967 C 130 Medical Care and Sickness Benefits Convention, 1969 C 183 Maternity Protection Convention, 2000 C.102 Social Security (Minimum Standards) Convention, 1952 R67 Income Security Recommendation, 1944 R69 Medical Care Recommendation, 1944 R.202 Recommendation on Social Protection Floors, 2012

Principles in ILO’s Convention No.102 International Labour Organization Principles in ILO’s Convention No.102 PRINCIPLES STATE’S RESPONSABILITY Due provision of benefits Proper administration of institutions and services (e.g. through enforcement mechanisms and regular actuarial reviews) EQUALITY OF TREATMENT Between Nationals and non-Nationals SOLIDARITY AND POOLING THE RISKS Between men & women, rich & poor, generations TRIPARTITE ADMINISTRATION Participation of employers and beneficiaries in key decisions and management

Principles in ILO’s Convention No.102 International Labour Organization Principles in ILO’s Convention No.102 PRINCIPLES (CONTINUED) COLLECTIVE FINANCING Through contributions, taxation or both Employees’ contributions should not exceed 50% of the financial resources allocated ADEQUATE AND GUARANTEED BENEFITS Level of benefits guaranteed, paid periodically Consistent with level of economic and institutional development Adjustment of pensions on cost of living SUSPENSION OF BENEFITS If beneficiary absent from territory, receives other benefits, made a fraudulent claim … RIGHT TO APPEAL In case of the refusal of the benefit Regarding the quality & quantity of benefits PROGRESSIVE EXTENSION Gradual extension of social security coverage (population and level of benefits)

International Labour Organization Reinforced principles in R.202 UNIVERSALITY Universal coverage of all residents, including informal economy workers RIGHTS AND DIGNITY Respect for the rights and dignity of people covered by the social security guarantees Full respect for collective bargaining and freedom of association for all workers EFFECTIVE DELIVERY High-quality public services that enhance the delivery of social security systems Coordination among national institutions and international development partners

The Social Protection Floor

Extending social security to all For a long time, SS was contributory and mainly adapted to the formal sector Level of protection Assumption that these schemes would progressively extend their coverage with the shrinking of the informal sector ??? This did not happen…. Poor Rest of informal sector Formal sector Population

Extending social security to all Discussion on social security in 2001 led to a new consensus: priority to be given to the extension of coverage, exploring several strategies: adapted social insurance, micro-insurance, social assistance… Level of protection Poor Rest of informal sector Formal sector Population

Extending social security to all Situation today: SP programs are scattered, sometimes overlapping, inclusion/exclusion errors Coverage through micro-insurance limited; often not sustainable Some programs target only the poorest, leaving the rest of informal sector workers uncovered Universal schemes in some countries (e.g. UCS, old age allowance in Thailand) Level of protection ?? Poor Rest of informal sector Formal sector Population

Extending social security: The Social Protection Floor Level of protection All residents should enjoy at least a minimum level of social security Member states of the ILO should establish SPFs as a fundamental element of their social security systems Nationally defined SPF Poor Rest of informal sector Formal sector Population

Extending social security: The Social Protection Floor Based on this floor, extend social security to provide progressively higher levels of SP benefits to more people Level of protection Higher levels of social security to more people Nationally defined SPF Poor Rest of informal sector Formal sector Population

Social Protection Floor: guarantees  All residents have access to essential health care  All children enjoy income security through transfers in cash or kind  access to nutrition, education and care  All those in active age groups who cannot earn sufficient income enjoy a basic income security (particularly in case of sickness, unemployment, maternity, disability)  All residents in old age and with disabilities have income security through pensions or transfers in kind

Social Protection Floors Nationally defined SPFs No ‘one size fits all’ approach : each country defines the levels of benefits that it can/is willing to provide Each country also decides how to do it – through universal schemes, targeted social assistance, social insurance, a combination…

Social Protection Floor It was adopted in national social protection strategies, e.g. Cambodia Source: NSPS-PV of Cambodia, 2011

ILO’s Recommendation on Social Protection Floors, 2012 (No. 202) R202 was endorsed by the 185 member states of ILO in June 2012 with 456 ‘yes’ votes and 1 ‘not present’ R202 serves as a guidance to member states to establish or maintain nationally defined SPFs http://www.ilo.org/wcmsp5/groups/public/---ed_norm/---relconf/documents/meetingdocument/wcms_183326.pdf

Linkage with employment The SPF de-links entitlement to social security from formal employment The SPF promotes employability People become active contributors to the economy

SPF as an investment Social protection Household consumption Poverty and inequality Education & training Health Child well being Livelihoods and productive investments Labour Human capital Physical capital Labour productivity Economic performance Demand for goods and services Increased Wages, income Increased financing 1. 2. 3. 4. Direct effects Behavioral effects 5. Source: Maastricht School of Governance

Some examples in Asia

Universal access to health care in Thailand Level of protection CSMBS 6.7% pop SSF sect.33 and 39 15.5% pop Universal Coverage Scheme (UCS) – 75.1% population CMHI since 2009 (880,000 insured) Poor Rest of informal sector Formal sector Quasi 100% Coverage (issues: large number of undocumented migrant workers are not covered by the Compulsory Migrant Health Insurance (CMHI) due to problems of affordability)

Cash transfers & scholarships for poor children in Indonesia Level of protection PKH and PKSA - 1.5 million very poor households in 2012 Scholarship for the poor – 6.3 million students in 2012 BOS program – Free education – 44.7 million students in 2012 (grade 1 to 9) Poor Rest of informal sector Formal sector Limitations: The PKH program should be expanded to cover at least all poor households (instead of only very poor); lack of health and education supply may curb the impact of the program.

Income security and public employment programme for the working age in India Level of protection Coverage < 1% of the working force Unemployment insurance 122 million with Job Card (been enrolled at least once) Yet the majority with no protection – huge portion of working poor Plan de Empleo Comunitario (community work plan): $150 (US$38.5) per month for unemployed workers Programa Jóvenes Más y Mejor Trabajo (programme for more and better work for young people): From $150 to 550 (US$38.5 to 141.0) per month plus counseling and training services (school completion, work orientation, vocational training) Seguro de Capacitación y Empleo (training and employment insurance): $225 (US$57.7) per month plus counseling and training services (school completion, work orientation, vocational training) Interzafra: $225 (US$57.7) per month for unemployed workers in temporary positions Seguro de Desempleo: (unemployment insurance) $357 (US$91.5) on average per month for formal-sector unemployed workers Recuperación Productiva, REPRO, (programme for productive recovery): $600 (US$153) per month as subsidy for nominal wages for employees of businesses hit by crisis PEP (100 days/year) = NREGA Poor Rest of informal sector Formal sector

Extension of social insurance to informal economy workers in Thailand Level of protection CS 6.7% pop SSF sect.33 and 39 15.5% pop Social security Act, Section 40 Package 1: 70 baht / 30 baht Death, Work injury, Sickness SSF section 40 Universal disability allowance of 500 baht/month Poor Rest of informal sector Formal sector With the introduction of subsidies, coverage has increased from 68 persons to 1.3 million in 18 months. However the target population = 24 million informal economy workers. Also only 50% pay contributions regularly.

Income security for the elderly (>60 years) in Thailand Level of protection Pen-sion for CS Social security Act, Section 40 Package 2: 100 baht / 50 baht Death, Work injury, Sickness & Old age lump sum SSF section 33 & 39 SSF section 40 Universal old age allowance Plan de Empleo Comunitario (community work plan): $150 (US$38.5) per month for unemployed workers Programa Jóvenes Más y Mejor Trabajo (programme for more and better work for young people): From $150 to 550 (US$38.5 to 141.0) per month plus counseling and training services (school completion, work orientation, vocational training) Seguro de Capacitación y Empleo (training and employment insurance): $225 (US$57.7) per month plus counseling and training services (school completion, work orientation, vocational training) Interzafra: $225 (US$57.7) per month for unemployed workers in temporary positions Seguro de Desempleo: (unemployment insurance) $357 (US$91.5) on average per month for formal-sector unemployed workers Recuperación Productiva, REPRO, (programme for productive recovery): $600 (US$153) per month as subsidy for nominal wages for employees of businesses hit by crisis >90: 1000 baht 80-89: 800 baht 60-69: 600 baht 70-79: 700 baht Poor Rest of informal sector Formal sector

Income security for the elderly in Viet Nam Level of protection Voluntary insurance under government regulation Social pension (180,000 VND/month) Problems with the vertical dimension: weak protection to formal workers 5 millions don’t receive any pension 1,300,000 social assistance +80 100,000 social assistance 60-80 1,000,000 pensioners 100,000 voluntary participants

Thank you! Valerie Schmitt, Social Security Specialist, ILO Bangkok schmitt@ilo.org Celine Peyron Bista Chief Technical Advisor, Unemployment Protection, ILO Bangkok bista@ilo.org