Policy Brief: The National Social Security Fund and Its Implications for CWEA Members
Phnom Penh, 23rdJuly 2021
By Seng Sopheak – Cambodia Women Entrepreneurs Association
Executive Summary
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In the last two decades, Cambodia has experienced tremendous economic growth by reaching lower-middle-income status in 2015 and is thriving to achieve upper-middle-income status by 2030.
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Regardless of its economic growth, Cambodia’s social protection remains inadequate, partly due to the unstable past and the destruction of institutions during the genocidal regime.
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In 2007, the Cambodian Government established the National Social Security Fund (NSSF) to provide basic social security and protection to the workers in private sector enterprises.
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Despite the remarkable progress of the implementation of the NSSF and its coverage expansion, some challenges remained for CWEA members regarding the NSSF implementation during discussions at a roundtable and some provincial road fora.
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To improve the NSSF implementation for workers to fully reap the benefits of the NSSF schemes, some key recommendations are provided for consideration.
Foster the awareness of social security schemes to employers and workers so that they are well aware of the benefits of the NSSF;
Provide a clear explanation to workers of the process of accessing medical care services free of charge at hospitals and clinics;
Provide strict supervision to health care staff to offer equal treatment to patients, based on their incomes and possession of NSSF cards; and
For the convenience of enterprises/establishments, the NSSF should consider using an online platform for registration, reporting and payment.
1. Introduction
The Kingdom of Cambodia has seen extraordinary economic growth and poverty reduction in the last two decades. The country has experienced a rapid change by reaching lower-middle-income status in 2015 and is thriving to attain upper-middle-income status by 2030. Its economy has sustained an average growth rate of 7% – 8% between 1998 and 2018, driven by garment exports and tourism. This has made Cambodia one of the fastest-growing economies in the world[1].
Although Cambodia has embarked on a path of economic growth, achieving a significant rise in living standards, the country’s social protection remains inadequate[2]. This could be partly due to Cambodia’s unstable past and the complete destruction of institutions during the genocidal regime between 1975 and 1979, following by a civil war that would last until 1998.
2. Establishment of National Social Security Fund and Its Current Situation
In 2007, the Royal Government of Cambodia established the National Social Security Fund (NSSF) by a sub-decree, intending to manage a social security protection scheme in conformity with the National Law on Social Security and the Provision of Social Security. The NSSF was established under the Ministry of Labour and Vocational Training (MoLVT) authority for technical matters and under the Ministry of Economic and Finance for financial issues[3]. The NSSF is responsible for providing basic social security to the workers in the private sector. It registers formal sector enterprises, collects contributions and coordinates the provision of health services and other benefits to members.
Since its launch in 2008, the NSSF has provided basic insurance to workers in the formal sector enterprises to raise their welfare and secure their livelihood when they encounter hardship. The NSSF offers three main schemes for workers, namely Employment Injury, Health Insurance, and Pensions.
The Employment Injury Scheme (EIS) provides occupational injury and work-related health coverage for employees in private-sector enterprises employing eight or more workers. As of 2019, the EIS covered 10,852 enterprises and approximately 1.2 million members nationwide. The second scheme, the Health Insurance Scheme (HIS), was officially launched in 2016, aiming to provide workers with a health package to tackle health issues outside the workplace. As of 2019, 10,877 enterprises with around 1.7 million workers (70.2% female workers) were registered under the HIS[4]. Lastly, the Pension Scheme was created to provide people reaching old age with decent income as a result of their contribution to the pension scheme during their working years[5]. This last scheme was just launched by the Cambodian Government for implementation on 4 March 2021.
3. Challenges of CWEA members on the NSSF Implementation and Compliance
The NSSF has been implemented for quite some time, aiming at providing basic social security to workers in private sector enterprises. Nevertheless, some challenges regarding its implementation and compliance have occurred amongst women entrepreneurs and their workers. These challenges were raised by CWEA members in a roundtable discussion with the NSSF on 16 July 2021 and some provincial road fora conducted by CWEA in late 2020 and early 2021.
Some of the challenges CWEA members have raised are the following:
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Some employers are not well aware of the social security schemes, and therefore they do not register with the NSSF;
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Many employees/workers are not well aware of the NSSF benefits;
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Lack of awareness of the process of accessing medical care services for free of charge at hospitals and clinics;
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Most workers experienced poor service of medical care at hospitals and clinics when they used the NSSF card for their treatment;
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Complicated process of documenting for monthly payment – the staff has to prepare documents for paying at a bank and they need to bring the payment receipt to the NSSF.
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Complicated process of reimbursement when workers receive treatment at hospitals and clinics; and
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Lack of clear information and guidelines for the reimbursement process.
4. Conclusion and Recommendations
Social security insurance is absolutely crucial for protecting Cambodian people as a whole and partly for workers employed in enterprises/establishments. In more than ten years, the MoLVT has made remarkable progress in strengthening the NSSF and expanding more widely its coverage of the two schemes (EIS and HIS). The number of enterprises/establishments registered with the NSSF has significantly increased, and more workers nationwide have been covered. However, there is room for improvement for the NSSF to provide social protection to workers more effectively. To improve the NSSF implementation and for workers to fully reap the benefits of the NSSF schemes, some key recommendations are provided for consideration.
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It is recommended that the NSSF foster the awareness of social security schemes to employers and workers so that they are well aware of the benefits of the NSSF;
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The NSSF staff should provide a clear explanation to workers of the process of accessing medical care services free of charge at hospitals and clinics;
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The NSSF should work with hospital and clinic partners to provide strict supervision to health care staff to offer equal treatment to patients, based on their incomes and possession of NSSF cards; and
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For the convenience of enterprises/establishments, the NSSF should consider using an online platform for registration, reporting and payment.
References
[1] World Bank (2021): The World Bank in Cambodia
[2] ILO (2017): Social Protection Country Brief – Cambodia
[3] NSSF (2021): National Social Security Fund – History
[4] MoLVT (2020): 2019 Annual Meeting and 2020 Action Plan of Ministry of Labour and Vocational Training (Kh version)
[5] NSSF (2020): NSSF Plan to Launch Social Security Schemes on Pension in the Upcoming Future