First Palestinian social security system for private sector workers ready to be rolled out
Establishing an independent Social Security Institution will enable the Occupied Palestinian Territory to roll out its first ever social security system to cover private sector workers and their families.
Press release | 06 July 2017
RAMALLAH (ILO News) – The Occupied Palestinian Territory (OPT) and the ILO signed an Implementation Agreement to support the establishment of the Palestinian Social Security Corporation (PSSC). The PSSC is legally charged by the new Social Security Law no. 19 of 2016 to administer the OPT’s first comprehensive social security system to cover all private sector workers and their family members.
Today, only public sector workers benefit from social protection benefits in the OPT, home to 4.8 million Palestinians, while most private sector workers are effectively not covered in case of old-age, disability or death, employment injury or maternity. According to official figures, private sector workers make up to 53 per cent of the workforce, relative to 31 per cent in the public sector, and 16 per cent working in Israel and West Bank settlements.
The agreement was signed in Ramallah on 3 July by Palestinian Minister of Labour Mamoun Abu Shahla on behalf of the PSSC’s Board of Directors, following its earlier signature by the ILO Regional Office for Arab States. The signature took place in the presence of ILO Representative in Jerusalem Mounir Kleibo, Secretary-General of the Palestinian General Federation of Trade Unions Shaher Saad, and Chairman of the Palestinian Federation of Chambers of Commerce Khalil Rizk.
“Establishing the independent institution is a major milestone in the path of achieving social protection for all in the Palestinian Territory,” said ILO Regional Director for Arab States Ruba Jaradat.
“It is the final chapter in the long process of building a social security system for Palestinian private sector workers, a process in which the ILO supported the Palestinian Authority and worker and employer organizations at every turn,” Jaradat said.
During the signing ceremony, Minister Abu Shahla expressed his appreciation for ILO support throughout the entire process of establishing the system, and stressed the need to continue cooperation with the ILO in order to benefit from its technical expertise and assistance.
Establishment of the Institution will be financed by an ILO Development Cooperation project which is funded by the Government of Kuwait. Since 2009, Kuwaiti voluntary contributions have accounted for 85 per cent of funding for ILO programmes to advance the Decent Work Agenda in the OPT.
Role of the new Institution
In September 2016, the new Palestinian Social Security Law was signed into force, giving the OPT the appropriate legal framework for its first private sector social security system.
The PSSC, comprised of government, worker and employer representatives will implement the new Social Security Law and administer and deliver social insurance benefits to insured workers and their family members. The Institution will be overseen by a Board of Directors which is chaired by the Minister of Labour and includes government, worker and employer representatives.
“The ILO will provide Palestinian stakeholders with technical assistance for setting up a well-functioning administration, based on the Standards adopted by the ILO and the International Social Security Administration, and on the internationally agreed principles of equality of rights, transparency and disclosure, sustainability, adequacy and good governance,” said ILO Senior Social Protection Specialist for Arab States Ursula Kulke, who is responsible for the ILO’s social protection work in the OPT.
“This will form the backbone of a more comprehensive social protection system which the ILO has already begun working on with the Palestinian Authority and social partners,” Kulke added.
ILO Representative in Jerusalem Mounir Kleibo said: “The next major milestone will be establishing universal protection floors which will ensure that all Palestinians in the OPT enjoy adequate social protection – and indeed this process has already begun.”
With support from the ILO, the framework of the new social security system was developed in 2013 by the tripartite National Social Security Committee, headed by the Prime Minister, and in consultation with workers’ and employers’ organizations, representatives from line ministries, as well as members of civil society and Academia.
To ensure its long-term sustainability and its ability to combat poverty and social exclusion, the system was modelled on an ILO actuarial evaluation, which assessed the system’s parameters and sustainability. In addition, the system was strongly founded on the basis of the prevailing Civil Servants Pension Law No. 7 of 2005, Labour Law No. 7 of 2000, the ILO Social Security (Minimum Standards) Convention, 1952 (No. 102) and international good practices.
The ILO designed an overall project for rolling out the private sector social security system, which includes introducing and promoting the new social security scheme in the OPT, designing and building the features of the new social security administration, establishing the pilot phase for the administration of the new social security system, and launching the new fully-fledged social security institution in the OPT.
This overall project will benefit from South-South cooperation, and is part of the ILO’s Flagship programme on building social protection floors for all, that aims to develop sustainable social protection systems and change the lives of millions of people in 20 countries and one territory (OPT) over the next five years.