|Overview : |
UNDP intends to pilot a social insurance scheme for the informal sector in South Africa that considers distinct characteristics of these workers, such as irregular and relatively low earnings and need for easy access to funds. Informal sector workers would benefit from such a social insurance scheme that allows for short-term savings that could be withdrawn during times of unemployment, as well as a long-term savings account for better old age pension. To the extent that informal sector workers would contribute to the scheme, they would be covered by a new form of social insurance. Such a social insurance scheme could be complemented by financial or behavioural incentives to encourage savings.
The social insurance scheme would have the additional benefit of increasing financial inclusion among informal sector workers and instilling a culture of savings. Reflecting this need for broader coverage, some countries in Africa have launched such social insurance schemes: for example, Haba Haba and Mbao in Kenya, Ejo Heza LTSS (‘long-term saving scheme’) in Rwanda, Micro Pension Plan in Nigeria, and Extension of Coverage for the Informal Sector (ECIS) Project in Zambia.
The overall aim of the assignment is to pilot a social insurance scheme for the informal sector in South Africa based on best practices of the various social insurance schemes on the informal sector in other countries with specific focus women. The pilot social scheme will be designed so as cater for the diversity of the informal sector in South Africa. This pilot scheme will therefore be instrumental in providing a basis to inform and guide the Department of Social Development on plans towards development of innovations, capacities and systems for inclusive social security schemes for the uncovered population, including, stimulating discussions on options for increasing the fiscal space for the expansion of social security programmes.
(For detailed information be found in terms of references)