Transcript Point four - Social Protection Platform

Social Security
in Sri Lanka:
Towards a social security
floor as a new foundation for
the system ?
International
Labour
Office
Michael Cichon, Emmanuelle St. Pierre-Guilbault,
Karuna Pal, John Woodall
ILO office, Colombo
Social Security Department
International Labour Office
Colombo, 11 September 2008
The ILO Global Campaign to extend Social Security to all
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Structure of the presentation
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Point One :
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Point Two:
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Point Three:
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Point four:
Point Five:
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History of Social Security in
Sri Lanka
The present state of social security:
sucesses, challenges and
current developments
Towards a social security
floor?
What the ILO can offer
Conclusion
The ILO Global Campaign to extend Social Security to all
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Point one: History - a success story:One the International
Labour
first countries of the world to adopt an explicitOffice
"Grow with equity" policy
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Phase One - Pre- Independence:
History goes back to the early 20th century, public
servants pension scheme in 1901, followed by an
expansion of tax financed systems and free health
services during 1930s –1940s
Phase Two – Post Independence: Sri Lanka adopts
a dual tax-financed and contributory welfare
system,
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Cash transfers/assistance aiming at wide population
coverage, in kind benefits (i.a. rice rations) and public
health care
The creation of the EPF in 1958;
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Point one: History - a success story:
one of the first countries to embrace
activation policies…
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Phase Three- about 1970 - 1990: adaptations of
the welfare state to the contracting
economy…focusing on the poor
Phase Four (post 1990…): Modernising the
welfare state through Janasaviya
(1989)/Samurdhi (1994) combining transfers with
activation and inclusion policies; plus
contributory schemes for special groups
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Point Two: The present state of
social security – the good news…
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Sri Lanka has one of the most developed
social security systems in the Region with
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A conceptually modern social assistance
scheme (covering around 40% of the
population)
A universal health care system covering
100% of the population
Pensions for public servants, farmers,
fishers and self employed
The EPF, ETDF and Approved Provident
Funds for private sector workers
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Covering
about 50% of
the working
age
population
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Point Two: The present state of
social security – … and the
challenges
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…improvements are necessary with respect to
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The targeting and the adequacy of benefits levels
in the Samurdhi scheme
The quality and cost effectiveness of the public
health care system
The personal coverage of the income security
schemes, about 12 million people not reached by
social security schemes (6.7 million elderly and
children)
The adequacy of benefits provided by the
provident funds
The range of benefits available is still incomplete
(e.g. unemployment benefits are still missing)
Coherence of the management and financing of
pension schemes
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Point two: Current developments
–
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Current proposals centre around
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Enhancement of administration and
management of the EPF
New EPF benefits (withdrawals for health
care, housing and education up to 50% of
balance) ??
A scheme for construction workers ??
A new unemployment benefit scheme
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Point Three: Towards a social
security floor? An ILO proposal …
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In the framework of its global Campaign to
extend social security to all the ILO is promoting
a “Universal and Progressive” approach to
social security development that envisages:
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Building progressively higher levels of
protection
Based on a basic floor of social security
for all
…and always incorporating existing
systems
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The social security development
staircase
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Voluntary insurance
Mandatory social insurance/social security benefits
of guaranteed levels for contributors
THE FLOOR: Four essential guarantees
Access to essential health care for all
The floor
income security
children
assistance
unemployed and poor
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income security
elderly and disabled
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The floor could consist of could consist of fourInternational
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essential social security guarantees:
Office
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Universal guarantee of access to essential health
benefits, through a set of sub-systems linked together:
basically a public health service funded by taxes, social
and private insurance and micro-insurance systems.
Guaranteed income security for all children through
family/child benefits aimed to facilitate access to basic
social services: education, health.
Basic means tested/self targeting social assistance for
the poor and unemployed in active age groups.
Guaranteed income security for people in old age,
invalidity and survivors through basic pensions.
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The social security development
staircase - the case of Sri
Lanka…
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Voluntary insurance
Mandatory social insurance/social security benefits
of guaranteed levels for contributors
EPF
ETF
PSPS, PSPF
Approved Funds
Farmers, Fishers, Self - Employed
THE FLOOR: Four essential guarantees
Access to essential health care for all
income security
children
assistance
unemployed and poor
Public Health Care System
income security
elderly and disabled
Samurdhi
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Point Three: A social security floor is
affordable: A simulation exercise –
Assumptions
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Basic old age and invalidity pensions:
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based on an health system staffing ratio of 300 medical professionals per
100,000 population, overhead 67% of staff cost …
Basic social assistance for the unemployed:
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10% of per capita GDP for a max. of two children in age bracket 0-14
Essential health care:
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20% of per capita GDP paid to all persons over 65
Child benefits:
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100 day guaranteed employment paid by 20% of per capita daily GDP to
10% of the population
Administration cost:
15% of cash benefit expenditure
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Point Three: Results of a simulation
exercise: Gross cost
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Point Three: Results of a simulation
exercise:…if the government could spend
about 20% of its revenue on basic social
security …
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Point Four: What can the ILO do to
support developments …
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A national Social Expenditure and Performance
Review (SPER) of the social assistance and social
security system
A social budgeting exercise trying to establish the
fiscal and economic viability of the existing and
potentially alternative social transfer schemes such
as the social floor…
Actuarial, fiscal and economic analyses of
individual schemes
Training of social security experts (planners,
managers, financing experts, supervisors and
regulators)
Legal advice
Facilitating social dialogue
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Point Five: Conclusion
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Sri Lanka has one of the the most developed social
security sytems in the region
Based on modern development principles such as
"growing with equity"
… and modern social security principles that include
activation strategies and policies of social inclusion
but
It has gaps …
The 50th anniversary of the most important social
security system, the EPF …
is a good time to start thinking about an extension of
the system…
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