Social Security in Australia and New Zealand: Means-tested or Just Mean?

The social security systems of Australia and New Zealand have traditionally rejected social insurance in favour of a means-tested categorical safety net approach that provides considerable scope for targeting. The experience of both countries provides many examples of how targeting can be used to constrain social security spending, and these have attracted interest in other countries keen to contain the growth in their social security budgets. However, although there are many similarities between the two systems, there are also many differences and these have become greater as targeting has gathered momentum over the last two decades. This paper analyses how targeting has been used in each country as a way of illustrating the different approaches adopted. Attention is focused on how the retirement income systems of the two countries illustrate an increasing policy divergence, with the planned Australian transition to a "multi-pillar" approach in contrast to the constant (and continuing) reform of New Zealand superannuation. Household data on the pattern of receipt of transfer incomes and their impact on the distribution of income are then used to explore the impact of targeting since the early 1980s. This analysis suggests that, in practice, targeting has had a far smaller impact on income inequality in both countries than is often claimed.     

Social Insurance and the Contributory Principle: A Paradox in Contemporary British Social Policy

At the outset of the twenty-first century, the situation of British National Insurance is one of paradox. Due to socioeconomic changes and successive government policies over the past three decades, the contributory principle, which was a cornerstone of social security reconstruction after World War II, has been in remarkable decline. At the same time contributions to the National Insurance Fund increased significantly and continues to represent a substantial form of total social security revenue. The contributory principle has a broad public appeal, but National Insurance does not figure prominently in public debates and the system is poorly understood. Recent policies have added to the ambiguity as to how far the contributory principle confers social rights, and have further eroded its rationale. The article states that this situation is not matched by developments in other European countries. Despite substantial reforms and heated debates marked by controversy, the prospect for social insurance and the contributory principle appears considerably better than in the UK. One major explanation is, the article argues, the distinctive notion of social insurance in Britain and particularly the lack of "wage-replacement" transfers. Elsewhere in Europe, earnings-related transfers sustain a very different incentive structure, institutional involvement and wider public participation in matters of social insurance.     

The Role of Insurance in Social Protection in Latin America

Social protection schemes in Latin America face serious short falls in the financial resources available to meet their needs. New types of insurance envisaged in reforms should help to contain costs and increase coverage. However, in strengthening schemes' coverage it is highly probable that considerable demand for additional financial resources will arise to address the need to introduce the principle of solidarity into the system. This article examines reforms in the financing of social security for healthcare and pensions, highlighting the implications of various public-private combinations for financial management and coverage.     

Social protection assessment‐based national dialogue exercises: Cambodia,Indonesia, Thailand,Viet Nam

Between 2011 and 2013, the International Labour Organization, in collaboration with governments and several United Nations agencies working as part of the Social Protection Floor Initiative, conducted social protection assessment‐based national dialogue (ABND) exercises in Cambodia, Indonesia, Thailand and Viet Nam. The exercises were carried out in order to take stock of existing social protection realities in the respective countries, including social insurance, social assistance and anti‐poverty programmes. These inventories present a comprehensive picture of what elements of national social protection floors (SPFs) are in place, where “holes” in national floors exist, and provide a framework within which to propose recommendations for the further design and implementation of social protection provisions that guarantee at least the SPF to the entire population. This article describes the methodology for conducting ABND exercises, the situational analysis of the SPF in four countries, and the policy recommendations that were formulated for achieving basic health care and income security for children, the working‐age population and the elderly. The results of preliminary calculations of the cost of implementing proposed policy options are also outlined.     

The Social Development Summit and the developing countries

This article discusses some concerns of the 1996 UN Summit on Social Development. Conference organizers identified the three key conference issues as poverty alleviation, social integration of the marginalized and disadvantaged, and expansion of productive employment. The goal of a "society for all" means dealing with the increasing differences between rich and poor countries, the survival of weaker economies in a competitive market system, wide variations in consumption patterns between countries, attainment of political stability while respecting ethnic identity, the rise in social problems among countries with a high human development index, and increasing joblessness. The Human Development Report for 1994 emphasizes human security. Social development is not the equivalent of human resource development nor a side issue of economic growth. The integration of ethnic groups poses social and political problems. There remains a question about what political system and culture would be best for social integration. Developed countries define poverty as the inability of people and government to provide resources and necessary services for people's productive activity. Poverty in developing countries is blamed on colonialism. Globally, developed countries control 71% of world trade. Sharing resources to meet basic needs throughout the world is not an operational ideal. The highest 20% of income earners receive 83% of the world income. The culture of poverty is the strategy used by the poor to survive. Welfare is not an end in itself but does enable the poor to improve their conditions. Development that focuses on productive employment is uncertain. Developed and developing countries do not share similar perceptions of human rights. There is a question as to who should set the priorities for social development. Sustainable social development is related to preservation of natural resources, control of population growth, and promotion of social security.     

The welfare state in liquidation?

This paper is about the most recent reforms of cash benefit systems and the sociopolitical debate in eight European countries. The welfare state and the social security system rank high on the political agenda. After many years of economic crisis, with increasingly widespread unemployment and changed family patterns, the welfare system that developed in most western European countries since the end of the Second World War is the focus of attention. In a world of increasing international trade, with competition from countries — in eastern Europe and Asia as well as the United States — which have not developed such comprehensive systems of social security, one of the main issues in the debate is whether western Europe can afford to maintain welfare at the existing level, or whether it is necessary to make fundamental changes. But the discussion also centres on what can be called the welfare state's own internal problems.     

Privatization, provision, and targeting: Trends and policy implications for social security in the United States

This paper examines several important trends in the changing structure of social security in the United States and their impact on the elderly in different income groups. These trends involve the shifting public/private mix of retirement income, the declining replacement rates of public benefits, and reforms for targeting benefits by age. An analysis of these trends suggests that (a) social security will provide declining economic support for those most in need; (b) middle- and upper-income groups will have a diminished stake in social security, reducing the programme's political base of support; (c) increasing reliance on occupational pensions will heighten the need for greater public regulation of private schemes; (d) an unplanned two-tiered system of pensions will emerge, with the first tier consisting of a whittled-down version of social security to provide a predominant source of retirement income for low-income wage earners and the second tier consisting of private pensions for middle- and upper-income groups.     

The General Agreement on Trade in Services (GATS): What's in it for Social Security?

This article explores the implications of the World Trade Organization's General Agreement on Trade in Services (GATS) for social security. It examines what bearing the GATS has, or will have, on social security policy and administration and what the effects might be. These questions are explored through a review of legal, political and policy issues relating to the status of social security within the GATS and the consequences of applying the Agreement's provisions to social security. The discussion distinguishes between the supply of social security services on the one hand and access to and use of social security services on the other hand. It also distinguishes between substantive questions regarding the scope of the GATS and procedural issues regarding governments' scheduling practices. I argue that although the GATS does not yet have a direct material bearing on social security policy and provision, it may do so in the future. However, it is too early to ascertain what the nature or magnitude of the effects might be. More generally, the discussion highlights the difficulties of securing multilateral cooperation among countries with different levels of "development", strategic interests and priorities, and social security systems.     

中西社会保障支出比较及思考

中国和西方国家的社会保障支出在预算表的凸现性、覆盖面、类别及比重、管理制度、支出质量、支出效率等方面存在差异。我国应在坚持“公平优先 ,兼顾效率”的原则下 ,建立多元化的社会保障支出体系 ,单独编制社会保障预算 ,提高社会保障效率。     

Social Security in South Korea and Singapore: Explaining the Differences

The paper sets out statutory social security arrangements in Korea and Singapore and then explains the differences between them. It finds that while Korea has a relatively advanced social security system based primarily on social insurance, Singapore has a patchwork of programmes based on forced saving, tax allowance, public assistance, and public insurance schemes run along commercial lines. Moreover, the increasing share of government expenditure devoted to social security in Korea stands in sharp contrast to the declining share in Singapore. The paper accounts for the variations in terms of the different economic objectives of the two states and the different international and societal constraints they face. In contrast to South Korea * * Republic of Korea. Hereafter referred to as Korea.
which has rapidly established an elaborate set of income maintenance and health care programmes, Singapore continues to resist expansion of such programmes. The objective of this paper is to describe the social security programmes in the two countries and then explain why the supposedly similar political economies have pursued entirely different social security strategies. The paper will argue that to understand the variations, we need to examine the varying economic objectives of the two states and the different international and societal constraints they face.     

Reforming formal social security systems in India and Sri Lanka

This paper analyses the formal social security systems of India and Sri Lanka. While many of the social, demographic, and economic indicators differ markedly between the countries, the structure of the social security systems, challenges, and reform directions are quite similar. Thus, the provident fund organizations in both countries need to modernize and benchmark their governance, operations, and investment policies. The dualism in their systems, which has resulted in relatively generous non–contributory pensions being provided to civil servants, also needs to be addressed. This dualism and the fiscal unsustainability of current civil service pension arrangements lend urgency to reforms in this area in the two countries. The prospects for voluntary tax–advantaged private sector schemes are encouraging, particularly in India. The conditions for reforms are more favourable now owing to hopeful signs of an end to longstanding conflict in Sri Lanka, and decade–long experience with financial sector reforms in India.     

Income security for older people: An Asian perspective

In Asia and the Pacific, as in other developing regions, the continuing growth of the aged population has a great impact on social security programmes generally and, in particular, on the income security of older persons. In societies where traditional support systems are breaking up, their need for social security protection is increasingly important. A system of social security for the elderly population exists in most countries of the region. Many are provident fund schemes, which are basically saving schemes, and their coverage is low. Where social insurance pension schemes exist, the levels of benefits provided are also low. The focus for future development, therefore, lies in converting the savings schemes into multitiered pension schemes, extending their coverage and raising the level of benefits. In this context the critical question concerns the role of the State and the type of schemes used. The need for public pension schemes is great in Asia and the Pacific, where the level of poverty is comparatively high. Building pension schemes, whether public or private, involves a set of issues that need to be addressed. This article considers the systems currently in place and the challenges and limitations faced when considering the future development of social security in this area.     

The use of replacement rates in international comparisons of benefit systems

Comparative studies of social security systems have increasingly turned towards the use of replacement rates as measures of the level of benefits in different countries and therefore of the degree of social protection afforded by different welfare systems. The rationale for this is that replacement rates provide consistent measures of the relative generosity of payments and therefore indicate the "quality" of social security systems. This article reviews the use of replacement rates in comparisons of the generosity of retirement pensions and argues that they are not necessarily reliable as such measures. This reflects a number of factors, including incomplete measurement of benefit packages and differences in what must be bought out of disposable incomes. Most importantly, the article suggests that the levels of earnings in different countries are not independent of the processes of redistribution. In particular, countries which rely on social security contributions from employers appear to provide more generous benefits than those which rely on income taxes or employee contributions. This is a consequence of the fact that employer contributions do not figure specifically in the calculation of replacement rates. The relative generosity of benefit systems is overstated in countries which rely on employer social security contributions to fund benefits. The article concludes that a range of complementary indicators of social security systems should be used in future analysis of these issues.     

Social insurance schemes in the Gulf countries

Being economically well established, the member countries of the Gulf Cooperation Council have unique social insurance schemes. Based on the defined benefit principle, they have succeeded in creating large reserves, which are managed and invested independently by the social insurance institutions. However, the schemes are facing a continuous escalation in their costs, due to their generosity rather than the population ageing observed in industrialized countries. This trend may well support the argument that the schemes in the region can cope with conventional reforms like increasing contribution rates, raising retirement age and restricting early retirement, rather than switching to a defined contribution system.     

The impact of tax-financed pensions on poverty reduction in Latin America: Evidence from Argentina, Brazil, Chile, Costa Rica and Uruguay

In many Latin American countries, tax-financed pensions (TFPs) have expanded, mainly resulting from growing informalization of employment and stagnating or declining pension insurance coverage. In the five countries examined in this article, TFPs have generally been effective in reducing poverty and indigence. In Brazil rural social assistance pensions cut the incidence of destitution among poor older people by 95 per cent. In Chile TFPs considerably improved their poverty reduction effectiveness between 1990 and 2000. Tax-financed pensions have therefore been seen as an instrument to supplement contributory pension coverage and boost overall social security coverage. A key challenge is to increase pension insurance coverage through existing statutory pension insurance or special contributory schemes targeted on workers in the informal economy. Otherwise, TFPs could become financially and socially unsustainable in the future. There are also various ways to improve the financing, administration and eligibility criteria of TFPs, particularly because it is necessary to define consistent structure and benefit policies between these and contributory schemes.     

Social Health Insurance: Key Factors Affecting the Transition Towards Universal Coverage

Several low- and middle-income countries are interested in extending their existing health insurance for specific groups to eventually cover their entire populations. For those countries interested in such an extension, it is important to understand the factors that affect the transition from incomplete to universal coverage. This paper analyses the experience of eight countries in the implementation of social health insurance. It highlights the importance of the socioeconomic and political context, particularly in relation to the level of income, structure of the economy, distribution of the population, ability to administer and level of solidarity within the country, but also stresses the important stewardship role government can play in facilitating the transition to universal coverage via social health insurance.     

Social security reforms in China: issues and prospects

The phenomenal success of China's market-oriented economic reforms since the 1980s has rendered the traditional employment-based social security system increasingly inadequate and inefficient. For decades, the Chinese government has been trying to develop a more pluralistic, effective and affordable social security system which will be compatible with both a thriving market economy and a flagging socialist political structure. While the emerging system is still struggling with a variety of operational problems, the entry of China into the WTO is looming as a formidable challenge to this social security system. This presentation outlines the recent reforms of the social security system undertaken by the Chinese government, and assesses the effectiveness of the results in meeting the challenge. Here, social security reforms focus on the retirement and unemployment insurance schemes and the social assistance program.     

The Role and Design of Income-Related Housing Allowances

Income‐related housing allowance schemes have become a long‐term feature of social policy in the advanced welfare states. They are not without disadvantages, however, and a number of countries have recently introduced significant reforms of their systems. The aim of this paper is to examine some key features of, and recent developments in, housing allowance programmes in seven countries. It addresses five main questions: why have income‐related housing allowances become so important, what role do they play, what are the essential features of such schemes, how do they tackle concerns about moral hazard, and what are the pressures facing them?     

Recent developments in China's social security reforms

China is one of the few developing countries which have managed to establish a comprehensive social security system encompassing social insurance (for pension, medical care, unemployment, employment injury and maternity), social assistance and a housing provident fund. The past two decades have witnessed a continuous process of reform in the Chinese social security system. This article highlights the latest developments in each of the schemes and offers some insights into the problems confronting the system and the prospects for the reform.