Social security: How about extending coverage and raising benefits?

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SOCIAL SECURITY is a fundamental human right. As a social protection program, it has a long history of helping to alleviate the impoverished condition of the needy and the poor in many countries. At present, both developed and developing economies have a social security system.

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Social security systems are essentially political make up, and the bases of many national social security programs that were mostly designed for the family structures, social needs, and life-cycle risks of populations of industrial countries (Matijascic and McKinnon, 2014). In many countries, the common scope or coverage of the social security under the social insurance, mandatory individual account, and social assistance system programs are old age; disability and survivors; sickness and maternity; work injury; unemployment; and family allowances. In the Philippines, neither the Social Security System (for the private sector) nor the Government Service Insurance System (for the provide sector) provides unemployment insurance.

Undeniably, social security is a major source of income for retired persons and this pension income directly affects the economic well-being of many beneficiaries, especially the poor. As such, there are those who believe that the country’s social security system needs reforming its administrative and financial management. Reforms are needed to make social security integrated, more inclusive in its actual coverage, and sustainable so that it will benefit a large number of people in various sectors.

Our social security should consider increasing the minimum level of old-age pensions and raising the level of other benefits in tune with inflation. Our social security should also consider additional target groups who are in the informal economy and in the rural areas such as the fisher folks, migrant workers, sidewalk vendors, and wet market sellers. Moreover, our social security system can explore a potential tool for establishing minimum benefits for retired workers aged 65 or older such as the elderly widowed beneficiaries, many of who are economically vulnerable. It must be noted, though, that future expansion of coverage must be in the context of the transition to a solvent social security system. Social security solvency proposals often consider minimum benefits targeted toward individuals with long work histories but with low levels of earnings and, therefore, low social security benefits.

Social security, as a form of social protection, has reached milestones in its long years of existence in different countries in Asia and the Pacific and even more in America, and most European countries. It has been talked about as one of the great moral successes of the 20th century, providing economic security to citizens in their old age and in the face of sickness, disability, or the death of a provider (King and Cecil, 2006).

Social security has faced a number of challenges throughout its history, more so in this period of increasing ageing population, financial turbulence, and the rising costs of living. In the past decades of implementing the social security programs, there seems to be a non-alignment between the concern of policymakers and public opinion as regards the necessity of the emerging broader role for social security systems and the need to reform social security systems to make it more inclusive towards improved poverty alleviation.

Dr. Divina M. Edralin is a full professor at the Management and Organization Department of the Ramon V. Del Rosario College of Business of De La Salle University. She is also the vice dean for research and graduate studies of the college. The views expressed above are the author’s and do not necessarily reflect the official position of DLSU, its faculty, and its administrators.

DIVINA M. EDRALIN

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