Social Security and Social Protection in Thailand: results of the Assessment Based National Dialogue

Valerie Schmitt, Social Security Specialist, ILO DWT Bangkok

Tuesday 13 March

Structure of the presentation

• Definition of the SPF• Purpose and process of the

Assessment• From situation analysis to

recommendations• The costing using the RAP protocol• Remaining questions…

CSMBS (7% population)

SSS (15% population)

SSS for informal economy workers

Level of coverage

The SPF is the first step towards higher levels of social protection

UCS & 500 Baht scheme

NSF for informal economy workers

Poor - Informal economy - Form. Sect.

The Social protection floor is not only a set of measures to provide income replacement

A mechanism providing protection against the financial consequences of risks (9 contingencies)

A mechanism to:• Protect people from poverty through a guarantee of income security • help people meet their basic needs• & develop individual capabilities

In a country with the Social protection floor

All residents have access to essential health care

All children enjoy income security through transfers in cash or kind access to nutrition, education and care

All those in active age groups who cannot earn sufficient income enjoy a minimum income security (transfer in cash or in kind & employment guarantee schemes)

All residents in old age and with disabilities have income security through pensions or transfers in kind

India: RSBY, NREGA

Thailand: UC scheme, minimum pension scheme (500 THB)

Cambodia: CARD’s NSPS with clear reference to the SPF … including HEFs, CBHIs, Food distribution, PWPs,… Lao: extension of SHP

for all

Vietnam: 10 years Social security strategy

Indonesia: Jamkesmas, Jampersal, PKH, Rice for the poor, PNPM

China: minimum living standard guarantee program; new rural corporative medical care (NRCMC); health insurance for urban uninsured residents (HIUR); rural old-age pension

Philippines: 4Ps

Many elements of the SPF are already here in Asia Relevance, South South

Structure of the presentation

• Definition of the SPF• Purpose and process of the

Assessment• From situation analysis to

recommendations• The costing using the RAP protocol• Remaining questions…

The Assessment = is the SPF a reality?

Full achievement of the SPF !!

Still some gaps to reach the SPF…

The assessment tells us1. What is the

situation?

2. How far are we from the

SPF?

3. What should we do to achieve

the SPF?

For each guarantee of the SPF we describe existing schemes, laws, regulations

We compare what exist with the SPF framework Has all the population access to health care and income security? Are the benefits adequate?

We draw recommendations and propose new (or extended) social protection provisions

The assessment tells us

4. How much will it cost?

We calculate the cost of the additional SPF provisions using the RAP protocol and compare with government budget

Beyond the assessment5. How to finance

the new SPF provisions?

We complete the assessment with recommendations to increase the fiscal space

6. What will be the return on investment?

We complete the assessment with an analysis of the impact of the SPF provisions on poverty

The results can be summarized in the Assessment matrix

Who conducted the assessment?

SPF-Initiative

SPF-Team in Thailand

17 UN agenciesInternational NGOs (Help Age)Governments (France, Luxembourg, etc.)

NESDB, MSDHS, MoL, MoH, MoF, MoE, MoI

ILO, WHO, UNICEF, UNFPA, UNWOMEN, UNESCO

Ministries CSOs AcademiaHISRO & TDRIHelp Age,

Home Net, SOSOSO

In Thailand

LINK WITH UNPAF ON SOCIAL PROTECTION

The Assessment has three steps

1.2 Provision of Recommendations

STEP 1 – From situation analysis to recommendations

JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR

10 Au

10 August

STEP 2 - Costing2.1 Translation of recommendations into “costable” scenarios

2.2 Data collection (I) on POP, ECO, EAP, parameters for each scenario and projection of the costs using the RAP protocol

2.3 Preliminary results of the costing

1.1 Inventory of schemes, gaps, issues

30 November2.4 Data collection (II) on GGO, ECO and finalization of the costing

3.1 Writing assessment report

23 February2.4 Recommendations from CSOs

16 March

STEP 3 – Finalization

3.2 Presentation to the Government? X

2.5 Validation workshop

Structure of the presentation

• Definition of the SPF• Purpose and process of the

Assessment• From situation analysis to

recommendations• The costing using the RAP protocol• Remaining questions…

Assessment of Health careExisting provisions Main design gaps Implementation issues

UCS (76%)

SSO (15%)

CSMBS (7% population)

Compulsory Migrant Health Insurance for registered migrant workers (migrants under MOU or who have completed the National Verification Process are entitled to the SSS)

Fragmented systems and laws

Dependents are not covered by SSS

Vertical inequality (same package UCS-SSS)

Undocumented Migrant workers are not covered (they represent 2-3 Mo or 5% of the workforce)

Inequity in access to ARTs (CSBMS VS UCS)

Confidentiality/stigma issues (HIV-AIDS)

Exclusion from UCS (ethnic minorities, stateless) because of no ID or lack of information

Geographic imbalances: poor availability of HC supply in some area, idem for HIV

Exclusion of migrant workers from SSO because of non declaration by employer

Assessment of Health careThe floor is achieved for Health Care, although implementation

issues remain

Main recommendations:

Reduce fragmentation (the way the system is organized, financed, regulated)

Improve health care supply, HIV-sensitiveness of the whole system, Long Term care (aging society)

Ensure financial sustainability of the system Introduce news measures such as the necessity to co-pay for non essential services

Future work?

HISRO/TDRI proposal to reduce fragmentation, ensure financial sustainability and increase the fiscal space

Organizational and legal reviews

Feasibility study on long term care (ILO-HISRO collaboration?)

Income security for childrenExisting provisions Main design gaps Implementation issues

Scholarships (civil servants, poor households, social activists)

Free education for all (15 years)

Child allowance introduced in 1998 for formal workers by Social Security Scheme

Free school meals and other support in kind (bicycles…)

Around 5-6 million children of informal economy workers do not receive adequate assistance – need to cover e.g. transportation costs

Improve services for pre-school children (stimulation of child development)

Some children from migrant workers and ethnic communities in remote areas have limited access to education

Regional disparities in quality of education, esp. in rural areas

Leakages / corruption issues in food distribution

Lack of information limiting access to services

Income security for childrenNeed to establish a child

allowance for all children 0-6, improve quality of education and

care for pre-school children

Main recommendations:

Design and implement a child allowance for all children 0-3, 0-6 or 0-12 years old

Future work?

Costing of the Child allowance using the RAP protocol (and NESDB demographic data)

Feasibility study for the design and implementation of the Child allowance once the idea is endorsed

Add a family benefit under Benefit package for Article 40

Provide systematic financial/in kind support to poor students & children (and not ad hoc)

Improve the quality of the services (education, child care, services for mothers and children)

Income security for working age

Existing provisions Main design gaps Implementation issues

Voluntary Insurance (art. 39): Sickness, maternity, invalidity, death, child allowance and old-age pension (432 THB/m)

Compulsory insurance (art. 33): Sickness, maternity, invalidity, death, child allowance, old-age pension and unemployment under SSF // work injury under WCF

Fragmented schemes increased admin burden

No portability between schemes

Some categories of workers are excluded from Art 33 (ex. domestic workers)

Package for informal economy workers is not attractive

Migrant workers have to leave 7 days after dismissal (no UI) and in case of disability

Compliance issues: some employers collect the contributions for SSS but do not register their workers

Voluntary Subsidized Insurance (art. 40- IE workers): 2 packages (i) sickness, invalidity, death(ii) Idem + old-age (lump sum)

Income security for working age

Existing provisions Main design gaps Implementation issues

500 baths transfer for people with disabilities from MSDHSadministered at TAO level and life quality fund (in kind by providing equipment)

Ad hoc support

500 baths transfer for people with HIV-AIDS from MoL administered at TAO level

Funeral expenditure (MSDHS)

2000 Baths up to 3 times a year (on demand) - implemented by MSDHS

Ad hoc support

TVET Migrants excluded Not adapted to market needs

Cumulated with 500 Baht old age allowance although both aim at the same purpose (income replacement in case people are no longer able to work)

Main recommendations:

Review social assistance schemes in place to ensure income support to inf. eco. workers

Review existing schemes (Art 33 and 40) in order to cover more people, with more adequate benefits (e.g. home workers, domestic workers)

Develop an objective and standardized poverty and vulnerability assessment system

Future work?

Design combined packages including income support and mechanisms to increase employability and/or access to markets

Income security for working ageReduce exclusions under Art. 33 and 40 - Reduce social evasion

Social assistance should be more predictable/less ad hocLinkages between SP and employability need to be explored

Explore linkages between social protection with Employment to ensure graduation

Feasibility studies on extension of existing schemes (Art 33 and 40)

Explore the PEOPLE service at decentralized level

Awareness raising

Income security for elderlyExisting provisions Main design gaps Implementation issues

Voluntary insurance under Art 39 and Art 40 (package 2 – lump sum)

Formal sector workers - SSF

National Savings Fund (MoF) for Thai Nationals aged 15-60 not benefiting from government or SSF

No portability across schemes

Art 40: contribution not enough to guarantee income support

Schemes with Lump sum: income support not guaranteed

No indexation of the social pension in legislation

Tax exemption does not benefit the poorest

Difficult contribution to NSSF (irregular income)

Universal Non contributory 500 THB scheme

Civil servants - Government Pension Scheme, Provident Funds for State Owned enter-prises, Private Teacher Aid Fund

Implementation of the 500 THB scheme politicized at TAO level

Registration under schemes mainly possible in BKK and long admin procedures

Ad hoc community volunteer care giver program (MSDHS)

Main recommendations:

Increase level of benefits to poverty line (at least) and index benefits

Establish long term care system holistic care to the elderly

Legislate the 500 THB scheme to ensure predictability

Future work?

Feasibility study of long term care

Income security for elderly

Create a coherent pension system (& portability) and look at tax reform to ensure financial sustainability of the scheme

Reform 500 THB scheme : increase level of benefits, legislateImprove coherence and portability between the schemes

Look at Long Term care

Costing of social pension at level of food poverty line + additional benefits depending on level of dependency

Take away message

• The Assessment exercise– Provides a snapshot of what exist for each of the four

guarantees of the SPF– Identifies gaps and issues for each guarantee– leads to the formulation of some policy recommendations –

what should we do to improve the situation and complete the social protection floor?

• To push these recommendations we need to know:– (1) how much they cost?– (2) what will be their impact (on poverty, employment…)?– (3) where we will find the money?

• The RAP protocol can help us answering the first question (for some simple recommendations – not all of them)

Structure of the presentation

• Definition of the SPF• Purpose and process of the

Assessment• From situation analysis to

recommendations• The costing using the RAP protocol• Remaining questions…

Assessment matrix including list of

recommendations

Qualitative recommendations on the management of existing schemes, review targeting &

registration mechanisms, review the law, conduct research, conduct a tax

reform…LABOUR MARKET MODEL

MACROECONOMIC MODELGENERAL

GOVERNMENT OPERATIONS

MODEL

BENEFITS COSTING EXERCISE

SUMMARY AND RESULTS

DEMOGRAPHIC FRAMEWORK

We can use the RAP Protocol

Recommendations = Increase benefits or population covered,

introduce new benefits

We need to conduct complementary studies

From recommendations to scenarios

• The recommendation: “Design and implement cash transfers for all children”

several scenarios: “Universal child allowance”

Scenario 1: for all children aged 0-3 (THB 400/month)

Scenario 2: for all children aged 0-6 (400 THB/month)

Scenario 3: for all children aged 0-12 (400 THB/month)

Scenario 4: for all children aged 0-6 (500 THB/month)

Scenario 5: for all children aged 0-12 (500 THB/month)

To calculate the cost of the scenario 1- Universal allowance for all children aged 0-3 years old (THB 400/month)

Which information do we need?

To calculate the cost of the scenario 1- Universal allowance for all children aged 0-3 years old (THB 400/month)

The number of children 0-3 years old in 2011 and the projected number in 2012… 2020The % who will be covered in 2012, 2013…

The amount of benefit in 2012 (400 THB/month) and its value in 2013, 2014… (indexation with inflation)The % of administrative cost of the child allowance

I need:

To calculate the cost of the scenario 1- Universal allowance for all children aged 0-3 years old (THB 400/month)

Number of children 0-3 years old

2012

3,055

Percentage covered

Amount of benefits (THB/year)

% of Admin costs

50%

4800

5%

3,135

2013

80%

4920

5%

50% * 3,055,000* 4800 * 1.05Total cost

Demographic changes

Inflation

To calculate the cost of the scenario 1- Universal allowance for all children aged 0-3 years old (THB 400/month)

50% * 3,055,000* 4800 * 1.05Total cost

= 7,698 million THB

In % of GDP = 0.07%In % of Government Expenditure

To calculate the cost of the scenario 1- Universal allowance for all children aged 0-3 years old (THB 400/month)

The number of children will change

Level of the child allowance (FS) will change with inflation

Demographic projections

Inflation forecasts

Percentage of GDP and Government Expenditure

GDP and Government Expenditures forecasts

I know that: I need the following models:

LABOUR MARKET MODEL

MACROECONOMIC MODELGENERAL

GOVERNMENT OPERATIONS

MODEL

BENEFITS COSTING EXERCISE

SUMMARY AND RESULTS

DEMOGRAPHIC FRAMEWORK

1- Data collection

2- Transformation of the recommendations into scenarios

Calculation of the cost in 2011 of each scenario, Projection over the years of this cost, in THB, % Govt expenditure and % GDP

Scenarios and results – ChildrenUniversal allowance for all children

Scenario 1: aged 0-3 (THB 400/month) = 0.09% GDP in 2020

Scenario 2: aged 0-6 (400 THB/month) = 0.16% GDP in 2020

Scenario 3: aged 0-12 (400 THB/month)

Scenario 4: aged 0-6 (500 THB/month)

Scenario 5: aged 0-12 (500 THB/month)

Between 0.09% and 0.36% of GDP in 2020

Scenario 1: for all children aged 0-3 (THB 400/month)

Scenario 2: for all children aged 0-6 (400 THB/month)

Scenario 3: for all children aged 0-12 (400 THB/month)

Scenario 4: for all children aged 0-6 (500 THB/month)

Scenario 5: for all children aged 0-12 (500 THB/month)

Scenarios and results – Maternity benefit for female IE workers

• A maternity benefit to compensate for the loss of income immediately after delivery. Lump sum payment of 4,500 THB paid upon delivery.

Which information do we need?

Scenarios and results – Maternity benefit for female IE workers

• A maternity benefit to compensate for the loss of income immediately after delivery. Lump sum payment of 4,500 THB paid upon delivery.

Number of births from IE workers

Percentage covered (50% the first year…)

Amount of benefits (THB/year)

% of Admin costs

Scenarios and results – Maternity benefit for female IE workers

Only 0.01% of GDP in 2020

The other scenarios

• For the elderly, benefit to compensate for the loss of income after 60 years old, including a “Long term care” component:– 600 THB/month for 60-69 years old– 700 THB/month for 70-79 years old– 800 THB/month for 80-89 years old– 1,000 THB/month for 90 years and over

The other scenarios

• For the working age, several schemes to compensate for the loss of income in case of sickness or disability:– 200 THB/day in case of sickness (similar to Article

40 for informal economy workers)– 1,000 THB/month in case of severe disability

(higher than existing scheme of 500 THB/month)

The other scenarios

• For the working age, a number of anti-poverty and training programs :

Anti-poverty component

Increasing productivity componentPre and primary school

Lower secondary school

Upper secondary school

Vocational training

Higher education

Poor 200 baht/day

20 days 20 days 20 days 10 days N/A

Non Poor N/A 20 days 20 days 20 days 10 days N/A One training per five years (20% per year)

Cost of training = 550 THB/person/day

Estimated cost of achieving the SPF2012 2013 2014 2015 2020

Child benefit-Scenario Min 1,591 1,972 2,353 3,126 7,865Universal pension 500BHT 43,162 47,321 51,880 56,855 69,836Disability allowance 218 228 240 250 307Maternity allowance 740 1,239 1,618 1,687 2,073Working Age 50,442 50,877 51,219 51,516 52,867Total in % of GDP 0.8% 0.8% 0.8% 0.7% 0.6%Total in % of Govt Revenues 6% 6% 7% 7% 4%

Child benefit-Scenario Max 34,324 55,085 70,014 70,932 77,625Universal pension-ladder with indexation 59,182 66,584 74,889 84,375 118,813Disability allowance 218 228 240 250 307

Maternity allowance 740 1,239 1,618 1,687 2,073Working Age 50,442 50,877 51,219 51,516 52,867Total in % of GDP 0.9% 0.9% 0.9% 0.9% 0.8%Total in % of Govt Revenues 7% 7% 8% 8% 6%

Take away message

• The RAP gives a first idea of “how much it would cost” to complete the SPF

• It tells us whether this is affordable or not• It helps to decide whether or not we should

implement the proposed scheme• It can be completed with poverty impact analysis,

and analysis of the impact on employment of some of the measures for working age population

• It needs to be completed by comprehensive feasibility studies and fiscal space analysis

Structure of the presentation

• Definition of the SPF• Purpose and process of the

Assessment• From situation analysis to

recommendations• The costing using the RAP protocol• Remaining questions…

Remaining questions

• How to finance? Additional taxes?– A question for the Fiscal policy office of the Ministry of

Finance… but also for the national commissions…• What will be the return on investment?

– Impact on poverty reduction, reduction of inequalities, social inclusion, access to employment, increase in productivity

• How to move forward?– Role of national commissions (House of Senate and

Parliament)??• How to implement these measures?

– Role of the civil society, the local administration at TAMBON level, the committees at local level in the implementation and oversight of the extension of the SPF?

MoH MoE MoL MoI MSDHS

Reducing costs by sharing admin functions & information

Reducing fragmentation with a single entry point

Case management= providing adapted services/benefits

Offering combined benefit packages with a bigger impact on poverty reduction (e.g. access to health, training, etc.)

Monitoring the extension of SP coverage at central level and assessing the impact

…

Representing the interests of the beneficiaries, ensuring that the SPF is a reality

Remaining questions

Committees?

Local administration?

CSOs?