Government introduces reduced pension – Mozambique

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Government introduces reduced pension – Mozambique

8:45 CAT | 30 Aug 2017

File photo / Minister of Labour, Employment and Social Security Vitória Diogo

The Mozambican government has reformed the country’s social security system to allow the payment of a reduced retirement pension to workers who have not paid enough contributions to qualify for a full pension.

Speaking to reporters on Tuesday, after the weekly meeting of the Council of Ministers (Cabinet), the Minister of Labour, Employment and Social Security, Vitoria Diogo, said the reduced pension “will solve what is a major problem for workers. We have workers who reach retirement age without having paid contributions over a long enough period”.

What used to happen is that those workers just received a lump sum of retirement pay. “Clearly they use that money, and after some time they have no source of income or social protection”, said Diogo. The new regulations will ensure that these workers are not left utterly destitute: instead, they will receive a reduced monthly pension for the rest of their lives. To qualify for the reduced pension, these workers must have paid at least half of the regular social security contributions.

Diogo also announced that the minimum period for obligatory contributions now rises from ten to 20 years.

A major problem, raised repeatedly by the trade unions, is that many employers deduct social security contributions from their workers’ wages, but then fail to pass the money on to the National Social Security Institute (INSS). The employers concerned are thus stealing from their workforce, but very few have ever ended up in court.

This has proved a very serious problem for workers who fall ill, or are incapacitated, and suddenly find that they cannot claim any benefits because they are not covered.

Diogo said that most employers recognise their debts to the INSS, but claim they do not have sufficient funds to pay off the debt at once. The new regulations provide the possibility of signing agreements with these employers whereby they pay off their debt in instalments. She believed that “extra-judicial collection of the debt” gives better results than taking the debtors to court.

“These are major reforms”, said the Minister, “and they are made to improve our provision of social security services, and to ensure increasingly robust management which corresponds to the dictates of the country’s development”.

Source: AIM