The ILO Recommendation on Social Protection Floors: A milestone in the extension of social security coverage

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In June 2012, the International Labour Conference voted on an historic Recommendation for social protection floors, which will support the extension of social protection coverage and the progressive building of national social security systems. The adoption of this new international labour standard, the Recommendation concerning national floors of social protection (No. 202) (1), marks a major milestone for social security, as it reaffirms the human right to social security and renews national commitments to extend coverage.

A compelling case for social protection floors (SPFs)
Evidence shows that social security achieves numerous development goals, and national SPFs are seen as a tool capable of addressing major social challenges including inequality and poverty. The adoption of Recommendation No. 202 represents an important addition to existing international social security standards and emboldens efforts to bridge the coverage gap. Currently only 20 per cent of the world has adequate social security coverage, a situation detrimental to the well-being of approximately 5 billon people, and which adversely affects the stability and prosperity of the societies in which they live.
On-going discussions on how social protection floors should be implemented at the national level suggest that the International Social Security Association (ISSA), through its unique network of member organizations, has an important role to play. The new Recommendation coincides favourably with the strengthening of cooperation between the International Labour Organization and the ISSA through the recent signing of a Memorandum of Understanding, which promotes and strengthens further cooperation between the two organizations. The ISSA’s commitment to promoting high-performing and well-governed social security administration enhances efficient/effective delivery and scheme legitimacy, thereby supporting the implementation of national SPFs. In turn, ISSA members’ expertise can strengthen the development of national floors through the use of effective administrative and organizational measures to meet objectives.
 

Social Protection Floors

National floors of social protection aim to extend social security vertically  (providing more comprehensive services and benefits) and horizontally  (extending coverage to a greater number) to cover all groups. In particular, SPFs assist the extension of coverage to the unprotected, the poor and the most vulnerable, including workers in the informal economy and their families. Guided by ILO social security standards, (2) countries should define their floors according to national needs and priorities and progressively build their floors in the most advanced yet achievable manner. SPFs should comprise at least the following social security guarantees:

• Access to essential health care, including maternity care;
• Basic income security for children;
• Basic income security for persons in active age who are unable to earn sufficient income;
• Basic income security for older persons.

 
These guarantees can be fulfilled in different ways through social insurance, social assistance or effective minimum wage or labour market measures.
Source:  ILO. 2012. Social security for all: The ILO Social Protection Floors Recommendation  (Briefing note). Geneva, International Labour Office.

 
Recommendation No. 202 – enhancing the role of social security administrations
The ILO Recommendation clearly indicates that social security administrations should play a key role. Importantly, it sets out concrete steps for the coherent development of national SPFs and existing social security programmes. A list of examples extracted from the Recommendation, along with additional suggestions from the ISSA as to how social security administrations can assist the start-up or extension of SPFs, include the following:

• Addressing policy fragmentation: Ensuring policy coherence and joined-up government across institutions responsible for the delivery of social protection.
• Building trust: Non-affiliation often results from limited awareness of the right to social security and negative perceptions about social insurance. Therefore, it is paramount that trust is built through improved transparency, accountability, clarity of information, straightforward access and good customer service (e.g. complaint procedures).
• Good governance: Improving governance of fund management and administration of benefits will improve social trust, promote a supportive public attitude and more affiliation as well as facilitating more effective delivery of services and benefits.
• Raising awareness: Raising awareness about entitlements can encourage affiliation. However, administrations can go further and attempt to cultivate a civic consciousness from a young age, which recognizes the importance of social security for individual and collective well-being.
• Progressively extend coverage: Gradually covering easy-to-reach groups and then more difficult groups; taking into account the contributory capacities of different population groups, reprioritizing expenditure, and the effective enforcement of contribution obligations are ways to facilitate grater affiliation.
• Sharing experiences and expertise: National administrations with successful and relevant experience can share this to help other administrations in the construction of their social protection floors.
• Develop monitoring systems: Regular monitoring and the collection of accurate statistics are essential for evaluating performance of programmes and identifying good practices and weaknesses and challenges.
• Building institutional capacity: Existing agencies with a proven track record of trustworthiness and reliability in administering schemes can take on new responsibilities for SPFs or play a supportive role to newly-tasked administrations.
• Embracing new technologies: New technologies can assist the extension of coverage by SPFs both in starting up programmes and enabling them to run effectively and efficiently, particularly for managing membership and claims, and in delivering benefits.

 
National floors are part of social security
National floors of social protection are to be understood as fundamental elements of social security systems. In countries lacking well-established social security institutions, SPFs should provide a foundation to kick-start strategies to progressively ensure higher levels of social security to as many people as possible.
For social insurance institutions, the putting into place of strategies for the progressive extension of coverage should mean greater contribution income, the shoring-up of reserve funds, improved operational efficiency through better economies of scale, and ensure that the distribution of risk across society is better pooled. ISSA members’ experience and expertise mean they are well placed to participate in the process of implementing SPFs, and the ISSA will continue to facilitate knowledge transfer in this area.