Valerie Schmitt, Social Security Specialist, ILO DWT Bangkok Social Security and Social Protection in Thailand: results of the Assessment Based National Dialogue Valerie Schmitt, Social Security Specialist, ILO DWT Bangkok Tuesday 13 March

Structure of the presentation Definition of the SPF Purpose and process of the Assessment From situation analysis to recommendations The costing using the RAP protocol Remaining questions…

SSS for informal economy workers NSF for informal economy workers The SPF is the first step towards higher levels of social protection Level of coverage CSMBS (7% population) SSS (15% population) SSS for informal economy workers NSF for informal economy workers UCS & 500 Baht scheme Poor - Informal economy - Form. Sect.

The Social protection floor is not only a set of measures to provide income replacement A mechanism to: Protect people from poverty through a guarantee of income security help people meet their basic needs & develop individual capabilities A mechanism providing protection against the financial consequences of risks (9 contingencies)

In a country with the Social protection floor  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 minimum income security (transfer in cash or in kind & employment guarantee schemes)  All residents in old age and with disabilities have income security through pensions or transfers in kind

Many elements of the SPF are already here in Asia Relevance, South South China: minimum living standard guarantee program; new rural corporative medical care (NRCMC); health insurance for urban uninsured residents (HIUR); rural old-age pension India: RSBY, NREGA Cambodia: CARD’s NSPS with clear reference to the SPF … including HEFs, CBHIs, Food distribution, PWPs,… Lao: extension of SHP for all Thailand: UC scheme, minimum pension scheme (500 THB) Philippines: 4Ps Indonesia: Jamkesmas, Jampersal, PKH, Rice for the poor, PNPM Vietnam: 10 years Social security strategy

Structure of the presentation Definition of the SPF Purpose and process of the Assessment From situation analysis to recommendations The costing using the RAP protocol Remaining questions…

The Assessment = is the SPF a reality? Full achievement of the SPF !! Still some gaps to reach the SPF…

The assessment tells us 1. What is the situation? For each guarantee of the SPF we describe existing schemes, laws, regulations 2. How far are we from the SPF? We compare what exist with the SPF framework Has all the population access to health care and income security? Are the benefits adequate? 3. What should we do to achieve the SPF? We draw recommendations and propose new (or extended) social protection provisions

The assessment tells us 4. How much will it cost? We calculate the cost of the additional SPF provisions using the RAP protocol and compare with government budget Beyond the assessment 5. How to finance the new SPF provisions? We complete the assessment with recommendations to increase the fiscal space 6. What will be the return on investment? We complete the assessment with an analysis of the impact of the SPF provisions on poverty

The results can be summarized in the Assessment matrix

Who conducted the assessment? 17 UN agencies International NGOs (Help Age) Governments (France, Luxembourg, etc.) SPF-Initiative In Thailand Ministries CSOs Academia SPF-Team in Thailand NESDB, MSDHS, MoL, MoH, MoF, MoE, MoI Help Age, Home Net, SOSOSO HISRO & TDRI ILO, WHO, UNICEF, UNFPA, UNWOMEN, UNESCO LINK WITH UNPAF ON SOCIAL PROTECTION

The Assessment has three steps JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR STEP 1 – From situation analysis to recommendations 1.1 Inventory of schemes, gaps, issues 1.2 Provision of Recommendations 10 August 10 Au STEP 2 - Costing 2.1 Translation of recommendations into “costable” scenarios 2.2 Data collection (I) on POP, ECO, EAP, parameters for each scenario and projection of the costs using the RAP protocol 2.3 Preliminary results of the costing 30 November 2.4 Data collection (II) on GGO, ECO and finalization of the costing 2.4 Recommendations from CSOs 23 February 2.5 Validation workshop 16 March STEP 3 – Finalization 3.1 Writing assessment report 3.2 Presentation to the Government? X

Structure of the presentation Definition of the SPF Purpose and process of the Assessment From situation analysis to recommendations The costing using the RAP protocol Remaining questions…

Assessment of Health care Existing provisions Main design gaps Implementation issues Fragmented systems and laws Dependents are not covered by SSS Vertical inequality (same package UCS-SSS) Undocumented Migrant workers are not covered (they represent 2-3 Mo or 5% of the workforce) Inequity in access to ARTs (CSBMS VS UCS) Confidentiality/stigma issues (HIV-AIDS) Exclusion from UCS (ethnic minorities, stateless) because of no ID or lack of information Geographic imbalances: poor availability of HC supply in some area, idem for HIV Exclusion of migrant workers from SSO because of non declaration by employer CSMBS (7% population) SSO (15%) UCS (76%) Compulsory Migrant Health Insurance for registered migrant workers (migrants under MOU or who have completed the National Verification Process are entitled to the SSS)

Assessment of Health care The floor is achieved for Health Care, although implementation issues remain Main recommendations: Future work?  Reduce fragmentation (the way the system is organized, financed, regulated) HISRO/TDRI proposal to reduce fragmentation, ensure financial sustainability and increase the fiscal space Organizational and legal reviews Feasibility study on long term care (ILO-HISRO collaboration?)  Ensure financial sustainability of the system  Introduce news measures such as the necessity to co-pay for non essential services  Improve health care supply, HIV-sensitiveness of the whole system, Long Term care (aging society)

Income security for children Existing provisions Main design gaps Implementation issues Child allowance introduced in 1998 for formal workers by Social Security Scheme Around 5-6 million children of informal economy workers do not receive adequate assistance – need to cover e.g. transportation costs Improve services for pre- school children (stimulation of child development) Some children from migrant workers and ethnic communities in remote areas have limited access to education Regional disparities in quality of education, esp. in rural areas Leakages / corruption issues in food distribution Lack of information limiting access to services Free education for all (15 years) Scholarships (civil servants, poor households, social activists) Free school meals and other support in kind (bicycles…)

Income security for children Need to establish a child allowance for all children 0-6, improve quality of education and care for pre-school children Main recommendations: Future work?  Design and implement a child allowance for all children 0-3, 0-6 or 0-12 years old Costing of the Child allowance using the RAP protocol (and NESDB demographic data) Feasibility study for the design and implementation of the Child allowance once the idea is endorsed  Add a family benefit under Benefit package for Article 40  Provide systematic financial/in kind support to poor students & children (and not ad hoc)  Improve the quality of the services (education, child care, services for mothers and children)

Income security for working age Existing provisions Main design gaps Implementation issues Fragmented schemes  increased admin burden No portability between schemes Some categories of workers are excluded from Art 33 (ex. domestic workers) Package for informal economy workers is not attractive Migrant workers have to leave 7 days after dismissal (no UI) and in case of disability Compliance issues: some employers collect the contributions for SSS but do not register their workers Compulsory insurance (art. 33): Sickness, maternity, invalidity, death, child allowance, old-age pension and unemployment under SSF // work injury under WCF Voluntary Insurance (art. 39): Sickness, maternity, invalidity, death, child allowance and old-age pension (432 THB/m) Voluntary Subsidized Insurance (art. 40- IE workers): 2 packages (i) sickness, invalidity, death (ii) Idem + old-age (lump sum)

Income security for working age Existing provisions Main design gaps Implementation issues 500 baths transfer for people with disabilities from MSDHS administered at TAO level and life quality fund (in kind by providing equipment) Cumulated with 500 Baht old age allowance although both aim at the same purpose (income replacement in case people are no longer able to work) 500 baths transfer for people with HIV-AIDS from MoL administered at TAO level Funeral expenditure (MSDHS) 2000 Baths up to 3 times a year (on demand) - implemented by MSDHS Ad hoc support Ad hoc support TVET Migrants excluded Not adapted to market needs

Income security for working age Reduce exclusions under Art. 33 and 40 - Reduce social evasion Social assistance should be more predictable/less ad hoc Linkages between SP and employability need to be explored Main recommendations: Future work?  Review social assistance schemes in place to ensure income support to inf. eco. workers Design combined packages including income support and mechanisms to increase employability and/or access to markets  Develop an objective and standardized poverty and vulnerability assessment system  Review existing schemes (Art 33 and 40) in order to cover more people, with more adequate benefits (e.g. home workers, domestic workers) Feasibility studies on extension of existing schemes (Art 33 and 40) Explore the PEOPLE service at decentralized level  Explore linkages between social protection with Employment to ensure graduation Awareness raising

Income security for elderly Existing provisions Main design gaps Implementation issues Civil servants - Government Pension Scheme, Provident Funds for State Owned enter-prises, Private Teacher Aid Fund No portability across schemes Art 40: contribution not enough to guarantee income support Schemes with Lump sum: income support not guaranteed No indexation of the social pension in legislation Tax exemption does not benefit the poorest Difficult contribution to NSSF (irregular income) Implementation of the 500 THB scheme politicized at TAO level Registration under schemes mainly possible in BKK and long admin procedures Ad hoc community volunteer care giver program (MSDHS) Formal sector workers - SSF Voluntary insurance under Art 39 and Art 40 (package 2 – lump sum) National Savings Fund (MoF) for Thai Nationals aged 15-60 not benefiting from government or SSF Universal Non contributory 500 THB scheme

Income security for elderly Reform 500 THB scheme : increase level of benefits, legislate Improve coherence and portability between the schemes Look at Long Term care Main recommendations: Future work?  Increase level of benefits to poverty line (at least) and index benefits Feasibility study of long term care Costing of social pension at level of food poverty line + additional benefits depending on level of dependency  Legislate the 500 THB scheme to ensure predictability  Establish long term care system  holistic care to the elderly  Create a coherent pension system (& portability) and look at tax reform to ensure financial sustainability of the scheme

Take away message The Assessment exercise Provides a snapshot of what exist for each of the four guarantees of the SPF Identifies gaps and issues for each guarantee leads to the formulation of some policy recommendations – what should we do to improve the situation and complete the social protection floor? To push these recommendations we need to know: (1) how much they cost? (2) what will be their impact (on poverty, employment…)? (3) where we will find the money? The RAP protocol can help us answering the first question (for some simple recommendations – not all of them)

Structure of the presentation Definition of the SPF Purpose and process of the Assessment From situation analysis to recommendations The costing using the RAP protocol Remaining questions…

Assessment matrix including list of recommendations Recommendations = Increase benefits or population covered, introduce new benefits Qualitative recommendations on the management of existing schemes, review targeting & registration mechanisms, review the law, conduct research, conduct a tax reform… We can use the RAP Protocol We need to conduct complementary studies

From recommendations to scenarios The recommendation: “Design and implement cash transfers for all children”  several scenarios: “Universal child allowance” Scenario 1: for all children aged 0-3 (THB 400/month) Scenario 2: for all children aged 0-6 (400 THB/month) Scenario 3: for all children aged 0-12 (400 THB/month) Scenario 4: for all children aged 0-6 (500 THB/month) Scenario 5: for all children aged 0-12 (500 THB/month)

Which information do we need? To calculate the cost of the scenario 1- Universal allowance for all children aged 0-3 years old (THB 400/month) Which information do we need?

To calculate the cost of the scenario 1- Universal allowance for all children aged 0-3 years old (THB 400/month) I need: The number of children 0-3 years old in 2011 and the projected number in 2012… 2020 The % who will be covered in 2012, 2013… The amount of benefit in 2012 (400 THB/month) and its value in 2013, 2014… (indexation with inflation) The % of administrative cost of the child allowance

To calculate the cost of the scenario 1- Universal allowance for all children aged 0-3 years old (THB 400/month) Demographic changes Inflation 2012 2013 Number of children 0-3 years old 3,055 3,135 Percentage covered 50% 80% Amount of benefits (THB/year) 4800 4920 % of Admin costs 5% 5% 50% * 3,055,000* 4800 * 1.05 Total cost

To calculate the cost of the scenario 1- Universal allowance for all children aged 0-3 years old (THB 400/month) Total cost 50% * 3,055,000* 4800 * 1.05 = 7,698 million THB In % of GDP = 0.07% In % of Government Expenditure

To calculate the cost of the scenario 1- Universal allowance for all children aged 0-3 years old (THB 400/month) I know that: I need the following models: The number of children will change Demographic projections Level of the child allowance (FS) will change with inflation Inflation forecasts Percentage of GDP and Government Expenditure GDP and Government Expenditures forecasts

1- Data collection 2- Transformation of the recommendations into scenarios Calculation of the cost in 2011 of each scenario, Projection over the years of this cost, in THB, % Govt expenditure and % GDP

Scenarios and results – Children Universal allowance for all children Scenario 1: for all children aged 0-3 (THB 400/month) Scenario 2: for all children aged 0-6 (400 THB/month) Scenario 3: for all children aged 0-12 (400 THB/month) Scenario 4: for all children aged 0-6 (500 THB/month) Scenario 5: for all children aged 0-12 (500 THB/month) Scenarios and results – Children Universal allowance for all children Scenario 1: aged 0-3 (THB 400/month) = 0.09% GDP in 2020 Scenario 2: aged 0-6 (400 THB/month) = 0.16% GDP in 2020 Scenario 3: aged 0-12 (400 THB/month) Scenario 4: aged 0-6 (500 THB/month) Scenario 5: aged 0-12 (500 THB/month) Between 0.09% and 0.36% of GDP in 2020

Scenarios and results – Maternity benefit for female IE workers A maternity benefit to compensate for the loss of income immediately after delivery. Lump sum payment of 4,500 THB paid upon delivery. Which information do we need?

Scenarios and results – Maternity benefit for female IE workers A maternity benefit to compensate for the loss of income immediately after delivery. Lump sum payment of 4,500 THB paid upon delivery. Number of births from IE workers Percentage covered (50% the first year…) Amount of benefits (THB/year) % of Admin costs

Scenarios and results – Maternity benefit for female IE workers Only 0.01% of GDP in 2020

The other scenarios For the elderly, benefit to compensate for the loss of income after 60 years old, including a “Long term care” component: 600 THB/month for 60-69 years old 700 THB/month for 70-79 years old 800 THB/month for 80-89 years old 1,000 THB/month for 90 years and over

The other scenarios For the working age, several schemes to compensate for the loss of income in case of sickness or disability: 200 THB/day in case of sickness (similar to Article 40 for informal economy workers) 1,000 THB/month in case of severe disability (higher than existing scheme of 500 THB/month)

The other scenarios For the working age, a number of anti-poverty and training programs :   Anti-poverty component Increasing productivity component Pre and primary school Lower secondary school Upper secondary school Vocational training Higher education Poor 200 baht/day 20 days 10 days N/A Non Poor One training per five years (20% per year) Cost of training = 550 THB/person/day

Estimated cost of achieving the SPF 2012 2013 2014 2015 2020 Child benefit-Scenario Min 1,591 1,972 2,353 3,126 7,865 Universal pension 500BHT 43,162 47,321 51,880 56,855 69,836 Disability allowance 218 228 240 250 307 Maternity allowance 740 1,239 1,618 1,687 2,073 Working Age 50,442 50,877 51,219 51,516 52,867 Total in % of GDP 0.8% 0.7% 0.6% Total in % of Govt Revenues 6% 7% 4% Child benefit-Scenario Max 34,324 55,085 70,014 70,932 77,625 Universal pension-ladder with indexation 59,182 66,584 74,889 84,375 118,813 0.9% 8%

Take away message The RAP gives a first idea of “how much it would cost” to complete the SPF It tells us whether this is affordable or not It helps to decide whether or not we should implement the proposed scheme It can be completed with poverty impact analysis, and analysis of the impact on employment of some of the measures for working age population It needs to be completed by comprehensive feasibility studies and fiscal space analysis

Structure of the presentation Definition of the SPF Purpose and process of the Assessment From situation analysis to recommendations The costing using the RAP protocol Remaining questions…

Remaining questions How to finance? Additional taxes? A question for the Fiscal policy office of the Ministry of Finance… but also for the national commissions… What will be the return on investment? Impact on poverty reduction, reduction of inequalities, social inclusion, access to employment, increase in productivity How to move forward? Role of national commissions (House of Senate and Parliament)?? How to implement these measures? Role of the civil society, the local administration at TAMBON level, the committees at local level in the implementation and oversight of the extension of the SPF?

Remaining questions … MoH MoE MoL MoI MSDHS Reducing costs by sharing admin functions & information … Reducing fragmentation with a single entry point Monitoring the extension of SP coverage at central level and assessing the impact Committees? Case management= providing adapted services/benefits Local administration? Representing the interests of the beneficiaries, ensuring that the SPF is a reality CSOs? Offering combined benefit packages with a bigger impact on poverty reduction (e.g. access to health, training, etc.)