New blows to Jordan’s social security system

Jordan’s social protection system has recently suffered severely due to government policies affecting pension insurance, disability and death of young workers in the private sector, increased fees for private sector doctors, and encouraging early retirement of thousands of workers in the Greater Amman City region.

These policies negatively impact the social protection elements set out in the National Social Protection Strategy 2019-2025, which is currently under review with a view to updating it in response to humanitarian crises.

One such policy is the reduction of contributions to pension, disability and death insurance for employees of private sector companies under the social security system, approved by the Council of Ministers last week. This will deprive young people up to the age of thirty in all sectors of the economy of part of their insurance benefits, as they will be covered by a partial insurance system.

This system will hinder the implementation of the first pillar of the National Social Protection Strategy entitled: “Szansa”, which aims to increase decent work and social security. Despite the government’s justification that this step will increase the employment of young people by reducing the costs of their employment, the implementation of this system will weaken the social security system for young people, reduce their pension earnings once they reach retirement age, and cause negative discrimination in the rights of insured people, thus weakening workers’ confidence and society to the social security system.

In addition, the Amman Municipality has encouraged its employees to take early retirement, which hinders progress towards achieving the same pillar of the strategy, “Opportunities.” Regardless of the justifications, this move threatens the stability of the labor market and the sustainability of the social security system. It will also create numerous risks in the labor market, as early retirees return to the labor market, increasing competition for jobs and increasing the unemployment rate.

Early retirement also leads to lower retirement wages due to shorter working hours, increasing the number of poor people and widening social inequalities. This approach depletes the resources of the Social Security Fund, jeopardizing its ability to meet its obligations to future generations and weakening citizens’ confidence in the sustainability of the social security system.

The third blow to the social security system was the government’s announcement of a 60% increase in the salaries of doctors in the private sector over three years. While this step may seem positive on the surface, it has significant negative consequences for most citizens, especially those on middle and low incomes.

Raising doctors’ fees without considering the impact on patients and their families will increase the cost of healthcare in the private sector, depriving large segments of the population of the right to access high-quality healthcare, especially given the ongoing poor quality of healthcare services in the public sector. Without government plans to raise the minimum wage, the economic burden on a large segment of the population will increase.

Insurance companies are also expected to increase the prices of health insurance policies to cope with the increase in doctors’ salaries, which will result in a decline in the number of insured people, especially in small and medium-sized companies. Increasing these fees without mitigating the consequences for patients and their families will hamper the implementation of the third pillar of the National Social Protection Strategy entitled ‘Empowerment’ which focuses on improving social services.

These policies indicate that the government is weakening, rather than strengthening, the system of economic and social rights that Jordan has built over the past decades. This is based on the government’s belief that economic growth can be stimulated by weakening labor standards and social protections, but this assumption has not been proven in any country. It often serves the interests of specific social groups, leading to increased poverty and unemployment, and deepening social inequalities.

The Government of Jordan must reconsider its economic and social policies to ensure that citizens can enjoy their economic and social rights and strengthen the social protection system to achieve social justice and economic stability, given the strategies it develops and adopts.

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