Contribution collection and compliance constitutes a core function within social security systems. It plays a key role in attaining the financial sustainability of the overall system. 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. The sustainability of social security is more than a simple issue of financial sustainability, however, and involves ensuring its social and political sustainability. Thus, implementing rigorous contribution collection and compliance processes strengthens the legitimacy of social security as a societal institution.
These processes together play a key role in the extension of social coverage. Wide population coverage cannot be achieved without appropriate and functioning contribution collection systems which include compliance and enforcement. Non-compliance and evasion have serious consequences for the level of protection of scheme members as well as for the financial and social legitimacy of social security schemes.
Therefore, compliance and a high collection rate must be key objectives for social security institutions administering contributory schemes. Where compliance gaps are identified, social security institutions can take actions to ensure that eligible people and their employers contribute to the system. Where there are specific administrative or transaction cost barriers to contribution collection, social security institutions can innovate and consider measures to overcome these barriers. Furthermore, as contribution collection and compliance often involves multiple institutions, process integration becomes a key issue to be addressed.