Contribution collection and compliance plays a fundamental role in social security as it helps to ensure the sustainability of social security systems and promotes a higher level of coverage among workers. As the ISSA Guidelines on Contribution Collection and Compliance (ISSA, 2019) put it, “The timely and full payment of contributions by and on behalf of insured persons is necessary if they are to achieve the benefits to which they are legally entitled”.
In recent years, coordinating service delivery has emerged as an important strategic priority for social security institutions and members of the International Social Security Association (ISSA) have made impressive gains in service quality enabled through information and communication technologies (ICTs). This article builds on good practices of ISSA members from Asia and the Pacific.
Social security institutions are an important face of government and serve as important barometers of public opinion for a country’s political leadership. This is one compelling reason that drives administrators to strive for service excellence in the administration of social security programmes.
In the Americas, as in the rest of the world, social security is a powerful instrument through which the public feels the presence of government. The quality of the social security experience is an important gauge of public satisfaction with government and political leadership; administrators thus have a compelling reason to strive for excellence in the administration of social security programmes.
Error, Evasion and Fraud in Social Security Systems
Contribution Collection and Compliance
Preventing and detecting error, evasion and fraud (EEF) is crucial for social security systems. Error, evasion and fraud have a direct impact on different aspects of social security. On the one hand, the economic impact related to non-collection of contributions and undue delivered benefits may undermine the economic sustainability of the schemes. On the other hand, the non-economic impact concerns the loss of social rights by workers and their dependents, undermining the fair economic competition through social dumping and the loss of trust in the social security system (Goveia and Sosa, 2016).
Forward-looking members of the International Social Security Association (ISSA) are using behavioural insights as a lens to re-examine existing policies, programmes and services, or to develop new ones. The approach offers a powerful new set of tools to expand and deepen the client-centric orientation of social security, and to ensure the close alignment of services with public goals and desired policy outcomes.
Error, Evasion and Fraud in Social Security Systems
Good Governance
Contribution Collection and Compliance
Information and Communication Technology
Social security evasion and fraud issues have high social and economic cost, create imbalances in social security accounts and ultimately lead to economic distortions that are not favourable to the functioning and competitiveness of the national economy. They also have a political impact because they undermine the reputation of the institutions that administer the social security programmes. It is estimated that evasion and fraud cause a 3 to 5 per cent income shortfall in social security systems and amount to up to 2 per cent of the gross domestic product of OECD countries (RAND Europe, 2014). These figures are likely to be higher in countries with less formal economies.
As part of the wider economic stimulus packages to respond to the second wave of COVID-19, governments continue to temporarily defer the collection of social security contributions (SSC), or to exempt from or reduce the contribution payments of some population groups. To date, 68 countries have introduced at least one of these measures (ISSA Coronavirus Country Measures Monitor). An April 2020 communication from the European Commission supported these as a “valuable tool to reduce the liquidity constraints of undertakings and preserve employment” during the COVID-19 crisis (EC 2020a).
As part of emergency measures to support companies in the context of the dramatically decreasing economic activity due to the coronavirus, many governments and social security institutions have temporarily postponed or reduced social security contribution obligations. The major objective of such measures is to reduce the immediate economic burden for employers, support companies to withstand the crisis and thereby secure employment levels. They therefore complement partial unemployment and other benefit schemes designed to support employers and workers.