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Palestinian Authority to adopt private sector social security scheme by 2015

The National Social Security Committee has unveiled a proposed social security scheme covering pensions, and maternity and employment injury benefits to be financed by both employers and workers

News | 02 December 2013

RAMALLAH (ILO News) – The occupied Palestinian territory is preparing to roll out a comprehensive social security scheme to cover all private sector workers. The announcement was made on Monday (December 2) in Ramallah at an event under the patronage of Prime Minister Rami Hamdallah.

Developed by the tripartite National Social Security Committee with support from the International Labour Organization, the scheme was produced in consultation with workers’ and employers’ organizations, government officials, and other stakeholders.

The Committee is drafting a law to be submitted to the Council of Ministers for adoption by 2015, and setting up an independent tripartite social security institution to administer the scheme's implementation.

“A comprehensive social security scheme is a genuine national achievement, no less important than the breakthrough at the UN General Assembly when Palestine became a non-member observer state of the United Nations,” said Buthaina Salem, Advisor to the Palestinian Minister of Labour on Social Security.

The proposed scheme aims to extend coverage for all workers in the formal economy ... as a means for providing income security, combating poverty and social exclusion."
The proposal builds on the Civil Servant Pension Scheme (Pension Law No. 7 of 2005), Labour Law No. 7 of 2000, ILO Social Security (Minimum Standards) Convention, 1952 (No. 102) and international good practice. The ILO conducted an actuarial evaluation to assess its sustainability.

“Social security is a strategic priority for the International Labour Organization in the occupied Palestinian territory,” said ILO Senior Social Security Specialist for the Arab States Ursula Kulke. “The proposed scheme aims to extend coverage for all workers in the formal economy and their family members, as a means for providing income security, combating poverty and social exclusion.”

Workers and employers will make contributions of 7.7 per cent and 10.4 per cent respectively. The total number of contributors to the scheme is projected to increase gradually from 82,646 in 2015 to 336,440 in 2025.

The new scheme covers old age, disability and survivors’ pensions and funeral grants, as well as maternity and employment injury benefits for all workers in the Palestinian private sector.

It sets retirement at age sixty and proposes an old-age pension at 45 per cent of average career earnings after thirty years of contributions, with a minimum pension equal to 50 per cent of the minimum wage or double the national poverty threshold (calculated per individual).

The current Palestinian social security law entails pensions for public and private sector employees, but its application remains exclusive to the public sector. Both employer and workers representatives lauded the new proposal.

Shaher Raad, Secretary General of the Palestinian General Federation of Trade Unions (PGFTU) said: “This scheme lays the foundations for a society premised on social justice and decent living standards for Palestinian workers.”

While Jamal Jawarbeh, Secretary General of the Palestinian Federation of Chambers of Commerce, Industry and Agriculture (PFCCIA), commented that “ensuring a decent living through pensions and other benefits not only serves the interests of the workers and their families, but also those of employers.”

The National Tripartite Social Security Committee was established by the Palestinian Prime Minister in 2012 in order to: (1) outline a vision for the social security sector strategy with clear priorities; (2) conduct an actuarial study for the establishment of the pension and social security law; and (3) engage in tripartite institution building for social security administration (including capacity building legislation and policy development).

Improving social protection is integral to the Palestinian National Development Plan 2011-2013 and the ILO Decent Work Programme for the occupied Palestinian territory.

***
For more information please contact:
Farah Dakhlallah Regional Communications Officer, ILO Regional Office for the Arab States, Email: dakhlallah@ilo.org, Tel: +9611752400 Ext: 117

Tags: maternity protection, social protection, social security, disability benefits, employment accident benefits, family benefits, maternity benefits, old age benefits, survivors benefits

Regions and countries covered: Palestine, State of

Unit responsible: Regional Office for the Arab States


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