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Estidama++ Fund – Formalization and Extension of Coverage

eval_number:

2365723

eval_url:

https://webapps.ilo.org/ievaldiscovery/eval/2365723

location:

country:

Jordan

region:

Arab States

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eval_title:

Estidama++ Fund – Formalization and Extension of Coverage

recommendations:

date:

2025-11-27 00:00:00.0

themes:

theme:

Social Protection

category:

Social security

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action_plan:

Reason for Rejection: While the recommendation identifies a legitimate challenge related to contribution affordability, it oversimplifies both the nature of the problem and the type of reforms required, and it proposes actions that fall significantly outside the scope, mandate, and design of the ESTIDAMA++ project. More importantly, the recommendation appears to assume a narrow and somewhat outdated understanding of how contribution subsidies and contribution structures work. It suggests isolated measures (e.g., revising tranches, discounts, or eliminating retrospective payments) without acknowledging the broader system-wide constraints, behavioural factors, and administrative/legal barriers that significantly shape coverage among low-income and informal workers. These elements cannot be addressed through piecemeal adjustments or project-level action. Furthermore, the proposed actions do not fully align with the international evidence base and the comprehensive analytical framework that ILO and the World Bank have jointly developed, nor with the global study on contribution subsidies commissioned by the ILO–ISSA . These research efforts clearly show that successful contribution reforms require integrated changes spanning legal definitions, scheme design, financing models, administrative processes, behavioural incentives, and outreach — not isolated adjustments to contribution levels. In Jordan specifically, the evidence generated through the joint ILO–World Bank research on own-account workers confirms that low participation in SSC is not simply a matter of contribution affordability or tranche design. Informality is shaped by legal gaps, income volatility, administrative barriers, registration complexity, behavioural biases, and limited trust in institutions . The recommendation does not sufficiently recognise this complexity, and therefore risks promoting incomplete or ineffective reforms. For these reasons, the recommendation is respectfully rejected.

management_response:

Rejected

progress:

No implementation

admin_units:

RO-Arab States/DWT-Beirut

title:

Recommendation 3: Support the government in revising the current contribution system, ensuring that social security contributions are linked to the level of income. While many beneficiaries are interested to stay in the social security scheme, they noted the contribution costs as the main barrier to do so. The contribution level is perceived as too high for the poorest populations, and stakeholders recommend revising the tranche system to lower contributions for the poorest income groups. At the same time, some interviewees noted that the government is considering requiring retrospective payments for people who newly enrol in social security. This would further deter people from formalising. The following approaches can reduce the financial barriers for enrolment in social security, and general formalisation: - Conduct a contribution capacity analysis as foundation for the development of a suitable tranche system, disaggregated by gender and employment type. - Ensure that the lowest tranche aligns with the payment capacity of the most vulnerable (informal) populations - Explore opportunities for enrolment discounts as replacement for the ESTIDAMA++ contribution support. - Convince the government not to introduce the retrospective contribution payments.

project_symbols:

JOR/20/04/MUL

url:

https://webapps.ilo.org/ievaldiscovery/recommendations/2365822

information_source:

Country Office

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