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Presentation on theme: "SOCIAL SECURITY - KENYA"— Presentation transcript:

By Geoffrey A Omondi – DLC Ministry of Labour

Existing ILO standards in Social Security – Recommendation no. 67 and 69 of 1944 Social Security (Minimum standards) Convention 1952 no. 102 The ILO Constitution and Declaration of Philadelphia The Universal Declaration of Human Rights The Constitution of Kenya National Legislation – Cap 258 Laws of Kenya These provide legal basis and can provide an excellent basis for vertical extension of social security coverage but are much weaker when it comes to extending benefits to all on the basis of minimum set of Social guarantees

The National social Security Fund was established in 1965 through an Act of Parliament Chapter 258 of the Laws of Kenya The Fund initially operated as a Division under the Department of Labour in the Ministry of Labour

4 TRANSFORMATION In 1987, the NSSF Act was amended transforming the Fund into a state Corporation under the Management of a Board of Trustees

5 BOARD OF TRUSTEES Has its membership drawn from COTU FKE
Ministry of Labour

6 NSSF CORE FUNCTIONS Registers members Receives contributions
Manages Funds of the Scheme Processes and Ultimately pays out benefits to eligible members or dependants

7 CONTRIBUTIONS These are made and received from workers who are members
Employers contributions Individuals Domestic workers The focus now is on all including those in the informal economy

8 REGISTRATION Any Kenyan above 18 years can register with the NSSF
All that is required is production of an Identification Card (ID) If employed, production of an introduction letter from employer Continuity of contribution to same account in event of change of employment

9 PLANS UNDERWAY Plans are underway to further amend the NSSF Act in order to convert the Fund into a mandatory National Social Insurance Pension Scheme to which every Kenyan with income shall contribute a percentage of their gross earnings to guarantee basic compensation in case of permanent disability, basic assistance to needy dependants in case of death and monthly life pension upon retirement

10 LEGAL NOTICE NO. 159 On 19th October 2009, the Minister for labour made a commencement order which require that employers of 1 – 4 employees registers with the NSSF Under this order, all employers with at least 1 employee to start remitting contributions to NSSF An emergence of a international framework for the protection of domestic workers. Failure to register is a criminal offence Sec 5 (4) Cap 258 Failure to pay Contribution is an offence Section 36 (a) Cap 258

11 PAYABLE BENEFITS These fall in six (6) categories
(1) Age / Retirement Benefit (2) Withdrawal Benefit (3) Invalidity Benefit (4) Emigration Grant (5) Funeral Grant (6) Survivors Benefit

Members are eligible for this benefit when they reach the age of 55 years or when they ultimately retire from regular paid employment

13 WITHDRAWAL BENEFIT Members are eligible for this benefit when they reach 50 years of age and have retired from regular paid employment A member would opt to apply for this benefit (over the age / retirement benefit if they retire before attaining 55 years of age )

14 INVALIDITY BENEFIT A member certified to be permanently incapable of working because of physical or medical disability Members who are at least 50 years of age and suffer from partial incapacity of a permanent nature that prevents them from undertaking employment Application form be endorsed by a qualified doctor at the hospital / clinic attended

15 EMIGRANT GRANT This grant is paid to members who are permanently emigrating from Kenya Affidavit of permanent emigration . This must contain the phrase without intention of coming back Citizenship of country of residence

16 FUNERAL GRANT The grant is payable to a dependant of a deceased member
This dependant must be nominated by the family and must be identified by local administration

17 SURVIVORS BENEFIT This benefit is payable to the survivor(s) dependants (s) relatives of a deceased member The dependant relatives qualify for this benefit in the following order : The husband / wife of deceased member All Children irrespective of age or gender (if the husband / wife of deceased member is also deceased, or if the deceased member

18 Was a single parent) children who are minors will be paid through bank accounts or confirmed guardians (3) The parents of the deceased ( if the deceased member was not married and had no children) (4) Sisters / brothers of deceased (if the deceased was single, had no children and both parents are deceased)

19 (5) The guardian to the children of the deceased member ( where both parents are deceased and all the deceased members' children are minors) An applicant who has letters of administration where all dependants are exhausted

Unemployment and underemployment remain a major challenge in Kenya Assess total employment statistics in formal Sector Employment in the informal economy Total Population Mostly young people with no special skills As at 2007, employment by sector was as follows : Informal Economy Contributes significantly to the economic Development of Kenya The 6th Development plan Kenya – 1.9 m jobs created out of which 587,000 – informal economy

21 EMPLOYMENT BY SECTOR Informal sector – 7.5 million
Manufacturing sector – 0.26million Agricultural sector – 0.34 million The informal sector remains major employer creating over 426,000 jobs annually which account for over 89 % of all new jobs The sector is however characterized by low productivity, skills shortage and low wages

22 INFORMAL ECONOMY There is no universally accurate or accepted description or definition of the term informal sector There is however a broad understanding that the term accommodates considerable diversity in terms of workers, enterprises and entrepreneurs involved They experience specific disadvantages and problems that vary across national, rural and urban context The term informal economy is preferable to informal sector because the workers and enterprises in question do not fall within any one sector of economic activity but cut across many sectors The term informal economy tends to downplay the linkages, grey areas and interdependencies between formal and informal activities

23 ECONOMIC ACTIVITIES It refers to all activities by workers and economic units that are in law or practice not covered or insufficiently covered by formal arrangements Their activities are not included in law which means they are operating outside formal reach of law or is not applied or not enforced or the law discourages compliance because it is inappropriate, burdensome or imposes excessive costs The ILO work needs to take into account the conceptual difficulties arising from this considerable diversity

24 TYPE OF WORKERS HERE These include both wage workers and
Own account workers Most own account workers are as insecure and vulnerable as wage workers Move from one situation to the other Because they both lack protection rights and lack representation, these workers often remain trapped in poverty

25 EXLUSION IN COVERAGE Constitutes discrimination Official negligence
Denial of rights NSSF for long covered only formal workers Over 70 % of total employment is excluded from public social security.

26 THE MAIN SCHEMES The National Social Security Fund (NSSF) which is a provident Fund model designed to cater for social protection upon retirement National Hospital Insurance Fund (NHIF) catering for health care Mandatory / Voluntary Funded / Pension Schemes Public / Private Provident Funds and more

27 LIMITED COVERAGE Contributions to both NSSF & NHIF though mandatory for workers in both public and private sector is limited ( contributions) For long covered employers with five employees and above Now extended to domestic workers and other in informal economy Amount of benefits low !

28 OTHER CHALLENGES Workers & Families are not covered – lack of contributory scope / capacity Benefits are not granted or paid to elderly, survivors or disabled Large numbers particularly elderly must continue to work often in informal economy Low wages in informal economy Resistance – women and youths Governance issues

The economic and financial crises have presented challenges in formulation and implementation of the policies in support of Social protection Too much debate on technical issues How to share national income Who bears the risk burden ?

30 EMPLOYMENT PATTERNS Informal sector Casuals Seasonal Short contracts
Contract and subcontracting Home working all present major challeges

It has become important for the country to have an enhanced and well structured social security system – having a basic social security Floor with minimum set of Social Security benefits for all covering access to basic health care, income security, child benefits, unemployment benefits and maternity benefits Justification for protection of domestic workers- The contribution of domestic workers is well understood all have house helps some way or the other The matter is now receiving international recognition and found expression in the discussions at the 99th Session of the International Labour Conference of 2010

32 DOMESTIC WORKERS Found in households, suffer imbalance of power relations Are frequently abused Excessive working hours, low wages and absence of Social Security, health care No leisure time, physically and sexually abused Lack trade union representation and poor social status

Social Security or social protection is needed to provide resource allocation in an economy This is necessary for provision for old age, disability, accidents and sickness as well as safety nets and social assistance programmes to ameliorate the impact of adverse shocks particularly on the poor This can prevent child labour, malnutrition and school drop outs

In order to improve situation in social security Government is reviewing NSSF Act to convert it from a provident Fund to a pension scheme and expand coverage to provide for requirement of people in the informal and other sectors Exploring flexible contributions to allow more contributors to social security scheme and non contributory schemes such as social assistance programmes to assist poor & vulnerable groups

35 OTHER MEASURES Exploring possibility of Social Security Fund lending money to employees and employers for development purposes and especially for housing projects for their workers

36 OTHER INITIATIVES Creation of employment to assist widen coverage such as : Kazi kwa vijana (KKV) The Youth Enterprise Development Fund Women Enterprise Fund The Community Development Trust Fund K -Rep Development Agency Kenya Youth Business Trust


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