First Palestinian private sector social security system is now law

A long-awaited, ILO-supported social security system for private sector workers has been signed into law by Palestinian President Mahmoud Abbas.

News | 11 March 2016
RAMALLAH, occupied Palestinian territory (ILO News)—Palestinian President Mahmoud Abbas signed a bill on 9 February which legally institutes the occupied Palestinian territory’s (oPt) first social security system for private sector workers and their families.

For over three years, an ILO project entitled “Establishing a Social Security System for Private Sector Workers” has worked with the Palestinian Authority, with workers’ and employers’ organizations and other stakeholders in the oPt to forge common ground over the various facets of the new private sector social security legislation.

Developed by a 35-member tripartite National Social Security Committee, with ILO support under the responsibility of its Senior Social Protection Specialist for Arab States, the system aims to combat social exclusion and the Palestinian territory’s high poverty rate of 25.8 per cent (2011 official figures.) Developed in accordance with ILO standards, worldwide-agreed social security principles and international good practice, it covers old age, disability and survivors’ pensions, funeral grants, and employment injury benefits for workers in the Palestinian private sector.

It also covers maternity benefits which the social security fund would pay instead of the employer, hence further encouraging the employment of women and contributing to gender equality in the workplace.

The system’s implementation will be managed by an independent tripartite public social security institution that will oversee the operations of the social security fund whereby workers and employers will make contributions of 7.7 per cent and 10.4 per cent respectively. The total number of contributors to the system is projected to increase gradually from 82,646 in 2016 to 336,440 in 2025.

The new system provides benefits for work-related injuries through employer-funded insurance. It also sets the retirement age at 60 and provides an old-age pension, which amounts, e.g. after thirty years of contributions, to 60 per cent of the workers’ average earnings up to the minimum wage, and 51 per cent of the worker’s average earnings above the minimum wage.

The ILO project “Establishing a Social Security System for Private Sector Workers in the oPt” was mainly funded by the Government of Kuwait as part of its long-standing commitment to the building of Palestinian State institutions. The project was part of the ILO’s global effort to institute the rapid implementation of national social protection floors containing basic social security guarantees that ensure universal access to essential health care and income security at least at a nationally defined minimum level, in line with the ILO Social Protection Floors Recommendation, 2012 (No. 202) , and the progressive achievement of higher levels of protection within comprehensive social security systems according to the ILO Social Security (Minimum Standards) Convention, 1952 (No. 102) .