Proposal for Piloting Social Insurance for the Informal Sector

United Nations Development Programme

Relevent Country: South Africa

The United Nations Development Programme (UNDP) requests you to submit your Proposal for the Piloting social insurance for the informal sector in South Africa with special focus on women.

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sector workers would benefit from such a social insurance scheme that allows for short-term savings that could be withdrawn during times of unemployment, as well as a long-term savings account for better old age pension.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.

Objectives

  • 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.
  • 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.

Scope of Work

The consultancy firm is expected to undertake the following tasks:

  • Based on existing information and evidence on needs and demand for social security, arising from discussions with key stakeholders and in line with the principles of feasibility, attractiveness and affordability, design and cost two or three options of benefit packages for the informal sector focusing on women;
  • Based on good practices from international experience, provide advice on rules governing
  • Registration, including aspects related to mandatory vs voluntary registration, individual vs household/group registration, windows of registration;
  • Payments, including period of contribution payment and contribution rates
  • Access to benefits (including waiting period and other conditions);
  • In line with sectors that have a high degree of informality as informed by the current labour force survey, assess preference for benefit packages and associated rules, measure their willingness and capacity to pay and refine the benefit package accordingly;
  • Determine needs for co-financing and possible financing sources and modalities, with the objective to ensure financial sustainability & broad coverage;
  • Assess the current institutional and operational capacities of South Africa Social Security Agency (SASSA) in relation to its possible role of spearheading the extension of coverage amongst informal workers;
  • Formulate recommendations to support efforts towards enhancing compliance amongst informal workers and associated policy implications;
  • Assess opportunity and feasibility of establishing partnerships with various informal workers’ organizations for the distribution of the product, and determine possible roles of partners and conditions of the partnership (incl. financing arrangements);
  • Propose possible institutional and operational arrangements for the registration of informal workers, contribution collection, benefit claims, awareness raising, complains mechanisms and enforcement, keeping in mind the need for harmonization and reduction of administrative costs both from beneficiaries and service providers; and
  • Explore the possibility of piloting the proposed social scheme with organisations such as WIEGO among others.

Duration of the Work

The duration of the consultancy is 60 working days effective from the date of signing the contract.

Expected Deliverables

Under the guidance of the UNDP Economics Advisor, the consultancy firm will deliver the following deliverables:

  • Inception report, including proposed methodology, expected timeline
  • Draft report of the pilot of extending social insurance scheme to the informal sector
  • Power point presentation of the preliminary findings and recommendations to key stakeholders and partners
  • Undertake a stakeholders validation exercise
  • Final report on the social insurance pilot
  • Policy brief summarizing key elements of the social insurance scheme pilot.

Competencies

  • Demonstrating/safeguarding ethics and integrity, by modelling the UN/UNDP’s values and ethical standards.
  • Promotes the vision, mission, and strategic goals of UN/UNDP.
  • Displays cultural, gender, religion, race, nationality and age sensitivity and adaptability.
  • Demonstrate corporate knowledge and sound judgment.
  • Self-development, initiative-taking.
  • Acting as a team player and facilitating teamwork.
  • Facilitating and encouraging open communication in the team, communicating effectively
  • Creating synergies through self-control.
  • Managing conflicts.
  • Learning and sharing knowledge and encourage the learning of others. Promoting learning and knowledge management/sharing is the responsibility of each staff member.
  • Informed and transparent decision making.

Source: https://procurement-notices.undp.org/view_file.cfm?doc_id=313454