Social protection systems have been one of the most effective instruments to mitigate the social, economic and health impact of the COVID-19 crisis. Governments worldwide moved swiftly to extend and adapt existing schemes and create new benefits to protect employment, prevent poverty and facilitate health-related restrictions. Social security institutions innovated to respond rapidly to the demands from governments and the public, and delivered existing and new benefits in an unprecedented and difficult context.
As vaccination programmes are being launched in an increasing number of countries worldwide, there is a growing hope to finally move out of a crisis that has now been affecting the world for more than 12 months. At the same time, discussions on what type of recovery the world should be aiming at are taking speed.
In view of the global importance of social protection during the crisis, but also the stark protection gaps and increasing inequalities that became apparent, building inclusive and resilient social protection systems for all should be an important component of recovery strategies.
In this context, this article will review the key lessons from the COVID-19 crisis and highlight strategies for the future of social protection. The article is based on a paper prepared jointly by the International Social Security Association (ISSA), the International Labour Organization (ILO) and the Organisation for Economic Co-operation and Development (OECD) as an input to the discussions of the G20 Employment Working Group.
Social protection response to COVID-19: a review
Social protection systems have been one of the major instruments to stabilize the economy, protect employment, prevent widespread poverty and facilitate the implementation of health protection measures. Reviewing the more than 1,600 social protection measures in 206 countries and territories included in the ISSA Country Measures Monitor, the following main approaches can be identified:
- providing access to health care, including testing and treatment;
- extending coverage of sickness benefits and paid sick leave;
- extending coverage/duration of unemployment protection;
- creating/extending coverage and increasing generosity of employment retention benefits (short-time work benefits, partial unemployment benefits, temporary wage subsidies);
- reducing contribution obligations, including deferral and exemption of social security contributions;
- providing social assistance/minimum guaranteed income;
- extending family-related benefits, such as child care vouchers.
In terms of population coverage, many schemes were extended to the self-employed, special measures were taken for vulnerable groups and workers in the informal economy, and efforts were made to also reach workers in new types of work such as platform and gig workers.
The impact of these policy measures relied on their effective delivery by social security institutions. Innovation, agility and adaptation were key ingredients for business continuity and meeting new demands during the last months, as was the embracing of digital tools and technologies. The main success factors included:
- effective leadership for rapid institutional transformation;
- accelerated adoption of digital technologies in back-office processes and service delivery;
- transformation of working methods and human resources approaches to a context of telework, health risks and social distancing;
- administrative flexibility and partnerships with public and private entities.
Despite the huge efforts by policymakers and social security institutions, the crisis has also highlighted existing gaps in the social protection systems in each country. Many temporary measures were put in place to bridge these gaps during the crisis, but these short-term patches call for longer-term solutions. While the lessons learnt and experiences in reaching out to the informal economy, the self-employed or gig workers during the crisis will be valuable in this regard, the solution cannot be to simply extend temporary measures for the years to come. Instead, longer-term solutions must respond to the ongoing needs of different groups, provide for sustainable financing and adequate investment in the capacities to deliver them.
Reinforcing social protection measures for the future
The joint ISSA/ILO/OECD paper proposes four tracks to build strong and resilient social protection systems for all in the future, and thereby contribute to an inclusive recovery.
a) Ensuring universal coverage, including of workers in all types of employment
In line with the vision of universal coverage and social protection floors, social protection systems need to be strengthened and adapted to adequately cover workers in all forms of employment, including workers in the informal economy, the self-employed and workers in new types of work. Contributory social insurance schemes are the major instrument to achieve this objective but will need to be complemented by tax-financed schemes as necessary to achieve a sustainable and equitable financing mix.
Efforts to extend social insurance are also a means towards the goal of promoting transitions from the informal to the formal economy. Social protection gaps are most visible for self-employed and workers in the informal economy, and these workers have also been most affected by the economic impact of the COVID-19 pandemic. The formalization of employment is an essential factor for achieving social protection for all.
b) Ensuring adequate benefits and services that respond to people’s needs
Social protection systems must constantly evolve to ensure that they effectively provide the benefits and services that individuals and families need in order to manage risks in today’s and tomorrow’s world. This includes supporting resilience in coping with unexpected economic and other shocks, ensuring accessible income support for all, efficient high-quality social services and a strong component of active labour market policies and skills development.
c) Ensuring sustainability and equity in financing of rights-based social protection systems
Sustainable financing considerations need to be at the centre of strategies to reinforce social protection for the future. Counter-cyclical spending during the crisis has led to increased fiscal pressures. At the same time, the recognition of social protection as an investment in human capital, economic stability, social cohesion and individual well-being calls for a commitment to continued counter-cyclical support as long as it is necessary. Nevertheless, efforts must at the same time be made to ensure consistency between social spending and the revenues to finance these expenditures, and to identify strategies to close financing gaps.
d) Enhancing delivery capacity for business-continuity and greater resilience
Highlighted specifically by the ISSA, strengthening social protection for an inclusive recovery relies on enhancing delivery capacity for social security service continuity and greater resilience. Developing an appropriate institutional capacity is a pre-condition for effective social protection schemes reaching all parts of the population, and a strategic asset for national resilience in times of crisis.
The digitalization of social protection delivery channels and enhancing human-and-digital staff capacities will no doubt be important factors. Strengthening the national administrative capacity through systematic inter-institutional coordination and partnerships will be another pillar, and in particular to support formalization, extension of coverage to the self-employed and to workers in new types of work. Institutions’ comprehensive information systems covering a wide spectrum of population groups (e.g. workers, families, employers, retirees, etc.), use of innovative payment systems and diverse service delivery channels constitute key assets to support the implementation of such large scale social protection programmes.
In short, this requires further investments in the capacity of social security institutions, which are among the most advanced public service delivery entities and have been instrumental for delivering large-scale national crisis responses, often beyond their original mandate. Benefitting from institutionalized social dialogue as part of their boards, the reinforcement of their operational capacity can be a key resource for supporting the countrywide expansion of social protection by facilitating contributory coverage, delivering non-contributory benefits and enhancing national resilience.
As the global debate on the recovery after the COVID-19 crisis takes speed, the key role of social protection and the protection gaps exposed during the crisis call for working towards reinforcing social protection for the future.
Strategies towards an inclusive recovery based on strengthening social security will need to include a number of components, including ensuring coverage for workers in all types of employment – especially self-employed – evolving benefits and services to meet people’s needs, sustainable financing and adequate investment into institutional delivery capacities. Reinforcing social security institutions' capacity in particular would be a pre-requisite to develop country capacity, notably to implement and deliver countrywide high-impact social programmes, facilitating the extension of social insurance, supporting formalization and ultimately enhancing national resilience.
Having contributed to a joint ISSA/ILO/OECD paper serving as an input to the G20 Employment Working Group, the ISSA will continue to showcase the key role played by social security institutions in ensuring effective social protection systems and highlight the need for the ongoing need to adequately invest in the development and maintenance of institutional capacities.
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