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Social security defined as ‘… the protection which society provides for its members through a series of public measures against the economic and social distress that otherwise would be caused by the stoppage or substantial reduction of earnings resulting from sickness, maternity, employment injury, invalidity and death’ (ILO 1984:3), is perennial and ubiquitous as human society. It plays a significant role in the lives of many people especially those with minimal incomes. As noted by Hill (2006) it is ‘collective action to protect individuals against income deficiencies’ Social security system therefore, ‘is made up of one or more social security programmes, a method of financing, and a mode of administration, that can be configured to achieve particular social security objectives’ (Dixon 1999:10). This does not, however, necessarily imply uniformity of social security systems globally.
This paper therefore seeks to examine the discrete social security systems that exist in different countries and as such bring to bear the sources of their difference. It would be argued that the distinction among countries is as a result of the diverse histories of social security provision as well as the different welfare regimes that take place in the various countries. The paper will further explore the diversity in relation to selective or universal social security systems in terms of social insurance, social assistance and social allowance/contingent benefits and draw on examples from UK, USA, Sweden, and Germany to substantiate the discussion.
Social security is intrinsically aimed at poverty prevention or alleviation, compensation as well as redistribution of income. This function can be delivered through non systemic social security such as the family, voluntary organizations (charity, friendly societies, credit unions and trade unions) as well as market. The state however, plays a very significant role of social security provision in many countries.
Notwithstanding the permeating nature of social security, there is diversity in the systems of operation globally and this is as a result of the ideological underpinnings of different countries. In other words, the social security provisioning in countries depend on the political ideologies and welfare regimes that exist and this to a large extent shape the system of social security. Dixon (1999:1) captures this as he writes the right of social security is ‘realized in varying degrees in different countries, as determined by their traditions, history, level of socioeconomic development and the prevailing political and social philosophies, which come together and determine who should be the social security winners or losers’. Thus, eligibility for social security benefits is one form of distinction that exists in different countries. This has to do with the conditions or prescriptions to be satisfied in order to receive a particular social security benefit. Either by way of selective means-test or universal citizenship benefits as well as contributory or non contributory tax financed benefits.
Selective social security is where only particular individuals or groups are covered by a social security programme and this is usually based on means-test subject to household income and resources. The major function of selective social security is poverty alleviation and this is achieved through social assistance programmes. Social assistance is a selective means-tested social security system in which resources are targeted at those most in need. In the words of Dixon (1999:5), it is a ‘selective-categorical approach to social security’. This system unlike social insurance does not rely on personal contribution but is funded through public revenues (taxes and budgets). Eligibility is based on citizenship as well as residency and beneficiaries need to satisfy certain conditions like low income to qualify for allowances, grants and other supports to supplement their incomes. This could be provided in cash as in the Transitional Assistance for Needy Families (TANF) in USA, tax credits in UK or in kind ‘food stamps programme available to low income individuals and families in the USA’ (Walker2005:6).
Universal social security on the other hand is a social security programme that gives coverage to the entire population whether citizens or residents and is a non contributory system. This social allowance program provides benefits to all legal residents (Bradshaw & Deacon 1983) or citizens and financing is generally through public revenues. The essential function of this system is the prevention of poverty. Dixon (1999:8) describes this as a ‘universal-categorical approach to social security, whereby usually flat-rate and uniform cash pensions and benefits are provided to residents (usually subject to minimum residency period requirement) or citizens in designated categories of presumed need, commonly without reference to their current or past employment experience’. He further goes on to say social allowance recognizes ‘common responsibility of all people for the welfare of others’ (Dixon 1999:64).
Countries with such universal social security programs in terms of social allowance include UK, Sweden, New Zealand, Denmark etc. In the UK and Sweden, child allowances are major universal social security systems. In addition, Sweden has a basic universal non contributory citizens’ pension. Other universal social security systems include New Zealand old age allowance and Denmark’s universal pension for old age or disability (OECD 1996). Moreover, citizenship based benefits is another form of universal social security in which a universal basic income is provided to citizens. Participation tested universal systems also provide universal benefits based on modified social insurance.
Furthermore, social insurance is yet a strategy of social security and this is earnings related as well as contributory. In the terms of Dixon (1999:4) social insurance is ‘an employment-related, contributory approach to social security’. This is a selective social security system in which entitlements are based on prior contributions and either financed from current contribution revenue or past contribution income accrued. In addition, contribution is mandatory and may be based on flat rates or earnings related and its primary social security goal is to prevent poverty. The social insurance strategy is basically a major social security system globally for most pension schemes and as noted by Dixon (1999), about 148 countries have adopted it at least for one of their social security programmes.
In addition to the differences in social security strategies outlined above, another source of difference in social security systems is attributable to the different types of welfare regimes. Welfare regimes according to Walker (2005:13) ‘refer to the different ways in which countries – or jurisdictions – organize economic production and transfers within the context of a capitalist market economy’. Based on the type of regime, social security provision could be shifted to the family, market or state. For instance in a liberal regime, emphasis is on the markets and hence the individual relies on family and private insurance for social security. In other words, collective welfare is provided through the market with residual targeted state support for those who are unable to contribute (Walker 2005). Countries within this category include USA and to some extent UK.
A socially democratic regime emphasize on universalistic modified social insurance with dominant role of the state. Social security is seen as a universal right for citizens and as such universal basic benefits. As noted by Walker (2005:16), ‘… receipt of a public service or benefit becomes both a right and a badge of citizenship, a statement of equal worth and solidarity’. The social security is funded through public revenues (taxation). For example Sweden and Denmark within this regime have universal child allowance and basic universal pensions respectively.
On the other hand, in the conservative regimes, social security is provided through collective transfers or social insurance with little or no social assistance. ‘The role of the state is that of promoting the welfare of its citizens through regulation and, where appropriate, facilitation’ (Walker 2005:16). Pooling of risk is a key component of this social security system. Emphasis is on the family and support is provided to the male breadwinner while the female homemaker is dependent on her employed husband (Walker 2005). In addition compensatory rights for workers as well as earnings related social insurance and family allowance are other forms of support. This regime is found in Germany, France and Japan.
In the light of the foregoing discussion, the paper did bring to bear that social security is very crucial for poverty alleviation and prevention. This therefore explains its dominance globally but in different forms. The paper has discussed the difference in social security systems in relation to coverage (selective/universal) and the different strategies used as well as the different social security regimes which also shape the social security systems of various countries. Despite the diversity in systems of social security, it is possible to identify major strategies through which these social securities are constructed globally. This paper therefore looked at three major strategies, social assistance, social insurance and social allowance/contingent benefits in relation to UK, USA, Sweden and Germany as well as the different social security regimes. In conclusion, it can be emphasized that though social security systems differ in varied countries, they all aim at poverty alleviation or prevention, social compensation, redistribution of income, fostering social cohesion as well improving on the standard of living of people.
- Bradshaw, J. & Deacon, A. (1983) ‘Reserved for the Poor’ Blackwell
- Ditch, J (1999) ‘Poverty and Social Security in the European Union’, in J. Ditch (ed.) Introduction to social security: Policies, benefits and poverty, London: Routledge, pp 227-38
- Dixon, J. (1999) ‘Social Security in Global Perspective’ Westport, CT: Praeger Publishers London
- Eardley, T. et al., (1992) ‘Social Assistance in OECD Countries: Country Reports’ DSS Research Report No 47, Off Pubs. 42 f8919/46
- Hill, M. (2006) ‘Social Policy in the Modern World: A comparative text’ Blackwell.
- International Labour Organization (1984) ‘Introduction to Social Security’ Geneva: ILO
- Kingson, E. & Schulz, J. (1997) ‘Social Security in the 21st Century’ New York: Oxford University Press
- Millar, J. (ed.) ‘Understanding Social Security’, 2009, Bristol: The Policy Press.
- Titmuss, M. R. (1956) ‘The Social Division of Welfare’ University Press
- Walker, R. (2005) ‘Social Security and Welfare: Concepts and Comparisons’ Open University Press
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