Social security laws overhauled to improve operations, benefits

Dar es Salaam. Tanzania is making sweeping changes to its social security law to address challenges related to funds’ management and members’ grievances about benefits.

The Social Security Laws Amendments Bill, 2024 passed by Parliament on Thursday also reflects President Samia Suluhu Hassan’s intention to address challenges social security funds are grappling with, which adversely affect the welfare of retirees.

Tabling the Bill earlier, the Minister of State in the Prime Minister’s Office (Labour, Youth, Employment and Persons with Disability), Mr Ridhiwani Kikwete, mentioned the issues as delays in employers’ contributions to funds and increasing statutory contributions.

“Others are ensuring fairness in compensating employees injured at work, addressing the failure to provide timely reports, eliminating unnecessary payments and protecting employees’ entitlements..

“Amendments also aim to provide information protection by employers, create a supportive environment for contributors, and ease payment processes,” Mr Kikwete said.

He added the Social Security Amendment Bill 2024 aims to amend the National Social Security Fund Act, Cap. 50; the Public Service Social Security Fund Act, Cap. 371; and the Workers’ Compensation Act, Cap. 263.

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Sections 52 and 76 of the National Social Security Fund Act, Cap. 50, are proposed for amendment to allow members below retirement age to use part of their benefits as collateral in housing loans.

“The move aims to clarify that these sections prohibit the use of benefits as collateral, except for housing loans as specified in Section 20.”

Mr Kikwete said the Bill proposes an amendment of Section 33 by removing the word “thirty-three” and replacing it with “thirty-six” to increase the amount paid to dependants in the event of a member’s death.

The bill proposes an amendment to Section 90 to include benefits paid under the law in the list of items exempted from taxation as outlined to prevent double taxation on benefits.

“The bill proposes the inclusion of Section 12A to allow an employee employed by more than one employer to be contributed to by all employers with their consent aimed at giving the member the freedom to receive contributions from more than one employer.”

Mr Kikwete added that the Bill proposes the inclusion of Section 11A to enable self-employed individuals in the private sector to join and benefit from social security benefits and expand the scope of social security to include self-employed individuals.

Furthermore, Section 12(3) is proposed for repeal to allow the employer to contribute a higher or the full amount.

Section 12(5) is proposed to be amended to outline the contribution method for self-employed members.

“The Bill proposes amendment of Section 14(3) to reduce the penalty fee from 5 percent to 2.5 percent charged by the Fund to an employer for late submission of employee contributions aimed at specifying an appropriate amount for the penalty, reduce operating costs for employers, and set a more manageable and affordable fee.”

The proposed amendments in the Public Service Social Security Fund Act Cap. 371 includes Section 5(2), providing that employees from companies with at least 20 percent of the government’s share be registered with the Fund to strengthen the Fund’s operations and ensure compliance with the Law.

“Honourable Speaker, it is proposed that Section 24 be repealed to eliminate a provision allowing members to withdraw a portion of their contribution from the Social Security Fund and terminate their membership, as this conflicts with principles of social security,” he said.

Mr Kikwete said the Bill proposes an amendment to Section 45 to specify a beneficiary of benefits serving a prison sentence may, in writing, authorise that their benefits or any part of their benefits be paid to a designated beneficiary.

“These amendments aim to enhance the participation of individuals serving prison sentences to manage their benefits for the designated beneficiary.”

Regarding the Workers’ Compensation Act, Cap. 263, he said numerous amendment proposals including Section 42(3) to allow trade unions or any other person to represent employees in compensation claims with the Fund.

“These amendments aim to prevent conflicts of interest, as labour officers and inspectors of the occupational safety and health authority are among those implementing this law,” he said.

The Parliamentary Social Welfare and Community Development Committee recommended the protection of the broad interests of members in the formulation of regulations.