1. Social Protection Assessment Matrix: Existing schemes, policy gaps, implementation issues by Batsukh Tumurtulga /ILO Ex-col National Consultant/ December 05 2012 Ulaanbaatar, Best Western Premier Tuushin Hotel

2. Existing Social Protection Schemes Social Insurance (1994) Contributory scheme. Promoting voluntary insurance besides compulsory scheme Active contributors: Total-843.3 thousand of which 742.0 thousand mandatory and 101.3 thousand voluntary (75 percent of active labour force 2012) Five types of insurance (pension, work injury, unemployment, maternity & sickness and health insurance ) consistent with ILO conventions Relatively high coverage of formal sector (both public and private sector workers) Mandatory social health Insurance scheme has covered 92% of total population (2012) Pension Insurance is the largest programme, 210.0 thousand (almost 98 per cent of total population aged over 55 and 60) OA beneficiaries involved in 2012 (dependency ratio is 3.5) Vertical management structure ( Ministry of Human development & Social Protection, Social Insurance (SI) General Office, 22Aimag SI Division, 333 Soum SI unit or inspectors )

3. Social Insurance Population Poor Rest of Informal sector Formal sector Level of protection Voluntary SI coverage: Herders, self-employed and informal sector workers Mandatory SI coverage : Public Service & Private Companies

4. Existing Social Protection Schemes Social Welfare (social assistance) ( 1997, 2011 ) Non-contributory scheme/financing by Central Government budget/ Mainly focused to the target groups based on means testing qualifications Around 70 types of cash transfers, in-kind benefits and services Using both universal and targeted approach Most of benefits and services (excluding social welfare OA,S,D pension + maternity benefit) allowed to the Social Insurance beneficiaries Vertical management structure ( Ministry of Human development & Social Protection, Social Welfare (SW) General Office, 22 Aimag SW Division, 333 Soum social workers )

5. Social welfare and assistance programmes Population Poor Rest of Informal sector Formal sector Level of protection Targeted SW/SA programmes

6. Existing Social Protection Schemes Employment Promotion Programmes (EPPs) EPPs are supporting to Active Labour Market Policies Job mediation Counseling and information Vocational training Business incubation Small loans Public works Eigth EPPs newly introduced by Ministry of Labour (MOL) Focus is targeted to the unemployed young people, herders, small business owners, disabled person, senior people & aged over40, poor people EPPs are trending practically to the urban areas ( capital city, aimag centers) due to population density, economic and market centralization Бүтэц зохион байгуулалтын шинэ хэлбэрээр ажиллаж эхэлсэн

7. Employment Promotion Programmes Population Poor Informal sector Formal sector level of protection Employment Promotion Programmes

8. Guarantee : Existing Situation: SHI Coverage: Share of Insured population to the total population: 92 per cent (2,571.3 thousand) in 2012 and SHI coverage by population groups: Category I: Government and business entities workers – 761.9 thousand (27.2 %) Category III: Children 0-18, persons who has not income expect pension (both SI and SA for OA, D and S), students (universities, colleges ), parents who looking after their babies until 2 years old, Personals of military service (defense, border security, police, emergency and fireman), and citizens who involved Community based Welfare service (rest of targeted: elderly, disability person, children with chronic condition e.g.) - 1525.6 thousand (54.4%) Category II: Herders, unemployed and students of the vocational training centers; Category IY: Self-employed; and Category Y: Foreign nationals and stateless person; Total expenditures on health as % of GDP: 5.5 Three levels of health care delivery system: Primary level -100% state budget: a/ 1588 bagh feldsher (rural); b/ 271 Soum hospitals and 39 inter-soum hospitals (15-30 beds/rural); and c/ 221 Family health centers (urban, private practices) Secondary level-10% co-payment system: 12 district hospitals (200-300 beds) and 17 aimag hospitals (100-500 beds) and 3 maternity home: Tertiary level-15% co-payment system: 4 regional diagnostic and treatment centers (at aimags), 3 Central Hospitals, 11 specialized hospitals;  All residents have access to essential health care 249.6 thousand (8.9%)

9. Guarantee : Policy Gaps: Social health Insurance package /25.1%/ Vs. Central Government Budget Package Out of pocket payment: increased to 41 % Governance : Fragmented, overlapped not clear functions among MPDSP and MOH SHI organization: No legal environment for the HI office to carry out responsibilities of an active purchaser such as studying the needs of the insured, defining the health care services, selecting health care providers and negotiating prices and tariffs of health care services; Service package: SHI package does not completely cover service needed by insured leading to situation where the insured need to pay for the service that are omitted. Customer satisfactions: poor chooses, lack of services of customer's demand Equity: There is big difference of monthly contribution amount between Mongolian nationals and non-nationals  All residents have access to essential health care

10. Guarantee : Implementation issues: Coverage: The coverage of HI decreasing from 98% to 92% in last 2 years due to the fact that herders, students and unemployed were subsidized by the Human Development Fund (HDF) by one time measure for their contribution fulfillment. Collect contribution: the current SI system is not effective in collecting HI contributions from the informal sector and herders Benefits: Free Diagnostic services and check up testing benefit (56,000 MNT each case+80,000 MMT for bonus once in a year) is adequate, but there is very limited beneficiaries due to insufficient service delivery and poor accessibility of public hospitals. Private hospital Diagnose centers not contacted with SHI Fund. Service quality control: Health care complaint system does not work properly If the grievance is not addressed in a way which satisfies a consumer SHI Fund: Huge positive balance (equal to 95.3% of the annual HI fund revenue in 2012) between the HI fund revenue and expenditures, but the health needs of the population are not fully met; All residents have access to essential health care 

11. Guarantee 1: Health population Poor Informal sector Formal sector Level of Protection SHI (mandatory + subsidized from the State SHI Coverage gap

12. Guarantee : Existing Situation: Universal Child Money Programme -98% /efficient delivery mechanism/ SI /survivor pension/- targeted SW benefits -targeted Free Secondary education /12 years system/- 504,0 thousand (97,6%) Public - Pre school education programme – ( coverage 75% ) + free kindergarten meal Public - School lunch programme /1-5 grade/- 100% Students: National scholarship allowance /monthly 70.0 thousand MNT / + free public transportation – 176,0 thousand covered Dormitory index - 90 Food coupon -targeted  All children enjoy income security through transfers in cash or kind  access to nutrition, education and care

13. Guarantee 2: Children Population Poor Informal sector Formal sector Social Protection Level Social Health Insurance Social welfare programmes Child Money Programme

14. Guarantee :  All children enjoy income security through transfers in cash or kind  access to nutrition, education and care Policy Gaps: CMP is not evidence based: often based on political decisions CMP Level: not adequate for school attendance: uniform and textbooks The level of SI pension: benefits adjusted in ad-hoc manner, no indexation Accessibility: Enrollment increased across the kindergartens thanks to free meal measures, but these enrollment increases generally not among children from low-income households. Lack of schools and kindergartens, and poor infrastructure and services Nutrition Adequacy: Kindergarten meal normative is still low The definition of invalid children does not meet the requirement of inclusions (medical, social, … e.g.) where number of children cannot access to services and benefits entitled by SP legislations Water sanitation and hygiene (WASH) and sufficient sanitary installation for children also being considerable issue

15. Guarantee :  All children enjoy income security through transfers in cash or kind  access to nutrition, education and care Implementation Issues: Required supporting documents violation of CMP ( to loss birth certification and parents ID) is the main complication issue in rural area. Lack of services for children’s spare time or vacancy Budget allocation for Community based welfare is not delivering to the targeted groups nor proper services There is not coherent information delivery system School social workers are not closely work or attend with their students Bad dormitory services Not sufficient professional social care and psychological services

16. Guarantee Social Insurance -843,0 thousand (75% of labour force) Redemption pension insurance contributions for working age people /one time measure/ Maternity /SI and SW/ Disability pension /SI and SW/ Sickness allowance /SI/ Unemployment Insurance Social Welfare services Food coupon /targeted/ Housing loan with 8% interest rate /open to all working age /  All those in active age groups who cannot earn sufficient income enjoy a basic income security (particularly in case of sickness, unemployment, maternity, disability)

17. Guarantee 3: Working age Population Poor Rest of Informal sector Formal Sector Level of Protection SW targeted programmes Social Insurance programmes Coverage gap

18. Policy Gaps: (Cash Transfers) Insurance Policy: Contribution collected on a monthly basis, which is not adapted to the seasonality of herders' incomes. Benefits: Relatively low-level of benefits, short duration and restrictive eligibility criteria create disincentive to enroll SI scheme. Occupational disease and Working injury: -No investigation mechanism and criteria to assess whether the disease is work related; -No clear policy on whether accident during coming to/form work is covered; -No penalties or reducing of benefits if working accident is due to worker's own fault -Disability allowance for temporary incapacity: the amount is very low (almost three times lower than ILO/C121) -Employment injury and occupational disease rates still high due to lack of effective prevention activities. Maternity: Voluntary Social insurance offers lower benefits although contribution rate is the same as Mandatory Social insurance maternity benefit. Maternity benefits period (4 months) is much shorter than the one provided by Social assistance benefits (10 months). Unemployment benefits: the requirement that workers have contributed for at least two years (including the 9 continuously months immediately preceding their job loss) to be eligible for benefits is too strict and causes many who lose their jobs to fail to qualify for any unemployment insurance benefit, and poor linkages with employment promotion programmes Disability pension: Shortcoming in the level of benefits (level adjusted in ad-hoc manner, no indexation), however duration is generous enough,  All those in active age groups who cannot earn sufficient income enjoy a basic income security (particularly in case of sickness, unemployment, maternity, disability)

19. Implementation issues: (Cash Transfers) : The level of SI contribution is affordable and minimum wage representative of herders income (at least minimum wage= one sheep per year for herders), but low registration to voluntary DUE TO: Coverage: Very low coverage, mostly young people, herders and self-employed not interested, although it includes maternity protection. Evasion: The average wage reported by the National Statistical Office (NSO) is significantly higher than the average wage declared for paying Mandatory social insurance contributions, shows that employers are evasion their contribution responsibilities. Accessibility: Herders hardly visit once a month the soum center due to remoteness, animal husbandry care and their income shortness. Contribution schedule: It is not appropriate or unmet rural populations income cycle and life style features. Herders’ income streams depend on highly seasonal events like cashmere and milk or live animal sales, and their demand for cash is also highly seasonal. Herders only have opportunity to have cash only 2 times in a year which during the spring for cashmere and early December for meat preparation. Lack of information on procedures, especially among the young people.  All those in active age groups who cannot earn sufficient income enjoy a basic income security (particularly in case of sickness, unemployment, maternity, disability)

20. Policy Gaps: (ALMPs/ Eigth EPPs) "Preparing to Employment" programme: Vocational training is lacking for this programme and can reasonably promote it and also, the criteria of enrollment programme that an individual who was seek job over 6 months, should decrease to between 2-3 months” 'Support for Employers' programme: There is high constraint criteria to get financial grant which to become discouraged. For instance, employed individual who has keeping his job place last 12 months for same employer; or if employer provided new job place for jobseeker who was seeking for over 6 months e.g. Employment Promotion Programme for Herders: Financial grant could effectively contribute to maintain herders in long term agriculture providing good coordination and monitoring of the programme. The expectations on the programme are high among herders, however funding are limited and eligibility criteria hard to meet which slow down the programmes implementation. Employment Promotion programme for aged over 40 and senior citizens: MOL should take into account is how improve a design tools of this programme.. Vocational training and other trainings tend to change their mind may be effective. Vocational Training: The Vocational training scholarship level is lower than University and collage students. This may negatively influences to the ALMP consequences Loan collateral: Many SM business holders cannot access to hold loan due to lack of guarantee collateral.  All those in active age groups who cannot earn sufficient income enjoy a basic income security (particularly in case of sickness, unemployment, maternity, disability)

21. Implementation issues: (ALMPs/ Eigth EPPs) : Linkage: Employment promotion programmes (EPPs) having poor linkage with SI scheme Fund: inadequate funding for all 8 EPPs Awareness: All these programmes are still very new (since Jan 2013), so population not aware. Capacity: there is a need to reinforce capacity of labour officers at the local level for the implementation of these new programmes. Lack of coordination: and overlapping, contradiction. Funds and capacity are lacking to implement effectively the programmes. Especially employment support and employment creation in rural areas, where high level of unemployment and poverty. Vocational training: The periods of VT curriculums is too short, the trainees cannot gain professional skills that will make him or her competitive in the labour market. There is a need to create training mechanism/programme that can promote rural cooperatives and seasonal job placement. SME Fund operation transparency: Many small business owners cannot access to the SME loan because of unclear procedures and government bureaucracy; Public works: Most people involved with public works, complain about deduction for social insurance contribution from their PW salary.  All those in active age groups who cannot earn sufficient income enjoy a basic income security (particularly in case of sickness, unemployment, maternity, disability)

22. .  Current Situation: Number of elderly: 254.5 thousand in 2012 55-59: 88.9 thousand 60-64: 55.6 thousand 65-69: 39.2 thousand 70+ : 70.8 thousand Old age pension beneficiaries: 212.9 thousand : Under Social Insurance Scheme: 210.9 thousand (82% of total elderly) Under Social Welfare Scheme: only 2.0 thousand But, there are many fragmented SA programmes for elderly people All residents in old age and with disabilities have income security through pensions or transfers in kind

23. .  Policy gaps: Coverage of OA pension voluntary scheme: Very low coverage, mostly young people, herders and self-employed not interested Funding: The DB pension system currently operates on a PAYGO basis, however the fund is currently in deficit and projections show that these deficits are likely to grow in the future, even after considering the impact of the 1999 (Individual Pension Account or NDC) reform. Indexation: The level of pension benefits adjusted in ad-hoc manner, no indexation DB vs. NDC conflict: Problems in the parameters of the DB and NDC schemes leading to a necessary pension reform: a/ workers born post 1960 will have lower retirement benefits than workers born pre 1960. b/ Early retirement under NDC scheme those born after 1960 is also will be lower than the benefits of those who work to the normal retirement age. Level of benefits: inadequate level of pension to be paid under the individual account system, low retirement age that provides low level of benefits, in particular for women. Equity: Benefit level is higher under mandatory Social insurance then if the person has contributed at minimum wage, the minimum pension the person will get 75% of mini wage (mini pension is 45% of mini wage). Equality of treatment: Unequal retirement age between men and women. All residents in old age and with disabilities have income security through pensions or transfers in kind

24. .  Implementation issues: Accessibility: Herders hardly visit once a month the soum center. Military pension: The military pension (very generous) is managed by the Social Insurance fund, which creates confusion with the other pension funds, need to separate the pension funds and management Governance: absence of periodical actuarial reviews, low administrative capacity and insufficient infrastructures. Service: The reimbursement list of social assistance services is need to update. Some prostheses and orthopedics facilities and other goods and services are not included in that list. Targeting criteria: SA Fuel compensation (coal and firewood) supply procedure is not sufficient for elderly people aged over 80. All residents in old age and with disabilities have income security through pensions or transfers in kind

25. Existing Social Protection Schemes Population Poor Rest of informal sectorFormal sector Level of protectio n Voluntary SI extension to herders, self-employed, inf. eco. workers Employees in business entities and civil servants Social health insurance (subsidized and mandatory) Targeted social welfare programmes Child Money Programme

26. Persistent gaps in achieving adequate social protection coverage Population Poor Rest of informal sectorFormal sector Level of protectio n Coverage Gaps: - Population - Level of benefits

27. Conclusion: However, Mongolia has number of SP schemes in comparison with its population and the Asia pacific regions, but there are considerable gaps in the system: Informal economy workers (included herders in rural areas) still not protected or excluding from social security scheme. Current SP schemes are not sufficient their employment specific There is not sufficient linkage between the ALMPs programmes and Social Security programmes Low qualities of social services Need to change key parameters of current Social insurance pension scheme Need to introduce efficient service delivery infrastructure in order to increase SP coverage and accessibilities SP offices should change their behaviors and service cultures…