Unemployment Benefit in Morocco: Maximum 2300 DH per Month!
17 December 2012
Read by 2147 persons
Employers and employees will pay 0.38% and 0.19% respectively of the salary capped at 6000 DH. The benefit will be a maximum of 2300 DH per month, paid for 6 months. The state has committed to sustaining its contribution if necessary.
The unemployment benefit (IPE), which had come to be called a pipe dream because the project was so long in coming, even though it regularly made the news, will it finally see the light of day? Yes, because the main obstacle, the only one that had until now prevented it, was lifted during the meeting of the CNSS management committee on December 3rd. During this meeting, the social partners (unions and CGEM) and the government, through the Ministry of Employment, agreed on the financing scheme for this project, which is over a dozen years old. The differing viewpoints, which had long diverged on this issue, were finally able to be brought closer together. Thus, this benefit will be financed one-third by employees (0.19% of salary, capped at 6000 DH), two-thirds by employers (0.38%), and, on the government side, by a 250 million DH start-up fund.
This distribution of financing shares is not entirely new. What is new is first of all the fact that it is accepted by all (the CGEM must, however, formalize its agreement in principle), and then the fact that the government has undertaken to perpetuate its contribution, if necessary, whereas up to now it had only been a one-time participation.
Another innovation, and this is undoubtedly what helped advance the project: social partners and the government decided to take stock (or review) after two years of implementation. If employer and employee contributions are sufficient to finance the benefit, then the (permanent) government participation will not be required; otherwise, the Executive will have to contribute.
However, given the eligibility conditions for this benefit (see box) and especially the amount that will be paid to beneficiaries, one can think that it will not be necessary to perpetuate the state contribution. It should be noted that the chosen benefit formula is very minimalist: 70% of the reference salary (average monthly salary of the last 36 months) without, however, exceeding the amount of the SMIG (minimum wage). In other words, employees earning 8000 DH, 10,000 DH and 15,000 DH per month, for example, will only be entitled to a benefit of 2300 DH (the SMIG) and only for 6 months. It turns out that, generally, those who lose their jobs are the "small" people who have low wages, sometimes not even reaching the SMIG. In this case, the beneficiary of the IPE will receive less than 2300 DH in benefits per month!
The project has been dragging on since the beginning of the 2000s
The CNSS, it should be remembered, had carried out numerous studies on the IPE, and the last one proposed three benefit formulas. The first, that is to say the minimalist one, is the one that has been chosen. The other two (see box) are relatively more interesting in terms of benefits, but their application would require higher levels of financing. According to estimates made by the Ministry of Employment, if the second or third formula were chosen, the annual cost of the benefit would be 660 MDH or 790 MDH respectively, which would necessitate increasing contribution levels. However, precisely, the social partners are not prepared to go beyond what they have accepted in the first formula. The CGEM states that it fears losing even more competitiveness if it were to increase its share, and the unions emphasize the responsibility of companies in job losses to claim at most a symbolic contribution from workers. Some trade union federations had even long refused outright any participation of employees in the financing of the IPE. This is why its implementation has dragged on. It was as far back as...2000 that the government and social partners reached an agreement in which they provided for the implementation of this benefit. Later, in 2004, the agreement received a legislative consecration of sorts since it was incorporated into the Labour Code.
The IPE is not unemployment insurance
The first version of the IPE project limited the benefit to employees who had lost their jobs for economic reasons. This, it will be remembered, had created major differences between employers and unions; the latter considering that it was difficult to distinguish between economic dismissal and dismissal pure and simple, and that in any case, the worker is in no way responsible for the potential difficulties of the company and that as such he must benefit from the benefit, whatever the reasons for the loss of his job.
Now that the IPE, minimalist version, has been accepted by all (the CNSS board of directors of December 17, 2012 should however approve the project), it is possible to say that a first step has been taken towards the establishment of a (meager) social safety net for employees who have lost their jobs. But there should be no mistake: with the IPE, Morocco has not provided itself with an unemployment fund, as exists elsewhere, including in some Maghreb countries. With 2300 DH per month, in the best case scenario, it is certainly better than nothing, but nobody today can live on such a sum. Moreover, the duration of the benefit is too short (6 months) when one knows that in Morocco, and according to official statistics (those of the HCP), long-term unemployment (12 months and more) is predominant: 65% compared to 35% for unemployment durations ranging from 0 to 11 months.
"People are mistaken: the IPE is not unemployment insurance; we are still a long way off. It is only a benefit to be paid for a limited time and according to the contributions of each party," insists an official at the Ministry of Employment. In plain language, this statement means that if we want a real unemployment fund, the stakeholders, employers and employees, will have to agree to contribute a little more. This is self-evident. Everywhere unemployment insurance exists, financing is provided, in 80% of cases, by companies and workers, and the shares of each party are relatively higher, which allows for fairly decent benefits and especially those that can last up to two or even three years, depending on the employee's seniority and the regularity of their social security contributions.
But who knows? After two years of operation of the IPE, perhaps other more interesting formulas will be found. In the meantime, to complement the IPE mechanism, we are counting on the training-insertion system managed by ANAPEC...
Morocco - Unemployment: Who can benefit from the IPE?
To be eligible for the IPE, it is absolutely necessary to meet the following conditions:
- Having lost your job involuntarily;
- Justifying a period of insurance under the social security scheme of at least 780 days in the three years preceding the date of work stoppage, including 260 days during the last twelve calendar months;
- Being registered as a job seeker with the competent job market intermediation services;
- Not being entitled to an invalidity or retirement pension;
- Being fit for work;
- Days validated under voluntary insurance are not counted for the opening of entitlement to the IPE.
Morocco - Unemployment: The IPE formulas not selected
In addition to the one that was chosen, the CNSS studies had proposed two other benefit formulas, which are as follows:
- 50% of the reference salary without exceeding the amount of the social security ceiling, i.e. 6000 DH;
- 50% of the reference salary for the employee who has 780 to 1620 days of seniority in the scheme. This rate is increased by 2.5% for each insurance period of 216 days in addition to 1620 days without exceeding 70%. The benefit level cannot in any case exceed the social security ceiling.
These benefits would, however, require greater financing, which is why they were not selected. At least for this first stage of implementation of the IPE.
Salah Agueniou.
Lavieeco.com
Published on December 17, 2012.
Posted online on December 17, 2012.
The unemployment benefit (IPE), which had come to be called a pipe dream because the project was so long in coming, even though it regularly made the news, will it finally see the light of day? Yes, because the main obstacle, the only one that had until now prevented it, was lifted during the meeting of the CNSS management committee on December 3rd. During this meeting, the social partners (unions and CGEM) and the government, through the Ministry of Employment, agreed on the financing scheme for this project, which is over a dozen years old. The differing viewpoints, which had long diverged on this issue, were finally able to be brought closer together. Thus, this benefit will be financed one-third by employees (0.19% of salary, capped at 6000 DH), two-thirds by employers (0.38%), and, on the government side, by a 250 million DH start-up fund.
This distribution of financing shares is not entirely new. What is new is first of all the fact that it is accepted by all (the CGEM must, however, formalize its agreement in principle), and then the fact that the government has undertaken to perpetuate its contribution, if necessary, whereas up to now it had only been a one-time participation.
Another innovation, and this is undoubtedly what helped advance the project: social partners and the government decided to take stock (or review) after two years of implementation. If employer and employee contributions are sufficient to finance the benefit, then the (permanent) government participation will not be required; otherwise, the Executive will have to contribute.
However, given the eligibility conditions for this benefit (see box) and especially the amount that will be paid to beneficiaries, one can think that it will not be necessary to perpetuate the state contribution. It should be noted that the chosen benefit formula is very minimalist: 70% of the reference salary (average monthly salary of the last 36 months) without, however, exceeding the amount of the SMIG (minimum wage). In other words, employees earning 8000 DH, 10,000 DH and 15,000 DH per month, for example, will only be entitled to a benefit of 2300 DH (the SMIG) and only for 6 months. It turns out that, generally, those who lose their jobs are the "small" people who have low wages, sometimes not even reaching the SMIG. In this case, the beneficiary of the IPE will receive less than 2300 DH in benefits per month!
The project has been dragging on since the beginning of the 2000s
The CNSS, it should be remembered, had carried out numerous studies on the IPE, and the last one proposed three benefit formulas. The first, that is to say the minimalist one, is the one that has been chosen. The other two (see box) are relatively more interesting in terms of benefits, but their application would require higher levels of financing. According to estimates made by the Ministry of Employment, if the second or third formula were chosen, the annual cost of the benefit would be 660 MDH or 790 MDH respectively, which would necessitate increasing contribution levels. However, precisely, the social partners are not prepared to go beyond what they have accepted in the first formula. The CGEM states that it fears losing even more competitiveness if it were to increase its share, and the unions emphasize the responsibility of companies in job losses to claim at most a symbolic contribution from workers. Some trade union federations had even long refused outright any participation of employees in the financing of the IPE. This is why its implementation has dragged on. It was as far back as...2000 that the government and social partners reached an agreement in which they provided for the implementation of this benefit. Later, in 2004, the agreement received a legislative consecration of sorts since it was incorporated into the Labour Code.
The IPE is not unemployment insurance
The first version of the IPE project limited the benefit to employees who had lost their jobs for economic reasons. This, it will be remembered, had created major differences between employers and unions; the latter considering that it was difficult to distinguish between economic dismissal and dismissal pure and simple, and that in any case, the worker is in no way responsible for the potential difficulties of the company and that as such he must benefit from the benefit, whatever the reasons for the loss of his job.
Now that the IPE, minimalist version, has been accepted by all (the CNSS board of directors of December 17, 2012 should however approve the project), it is possible to say that a first step has been taken towards the establishment of a (meager) social safety net for employees who have lost their jobs. But there should be no mistake: with the IPE, Morocco has not provided itself with an unemployment fund, as exists elsewhere, including in some Maghreb countries. With 2300 DH per month, in the best case scenario, it is certainly better than nothing, but nobody today can live on such a sum. Moreover, the duration of the benefit is too short (6 months) when one knows that in Morocco, and according to official statistics (those of the HCP), long-term unemployment (12 months and more) is predominant: 65% compared to 35% for unemployment durations ranging from 0 to 11 months.
"People are mistaken: the IPE is not unemployment insurance; we are still a long way off. It is only a benefit to be paid for a limited time and according to the contributions of each party," insists an official at the Ministry of Employment. In plain language, this statement means that if we want a real unemployment fund, the stakeholders, employers and employees, will have to agree to contribute a little more. This is self-evident. Everywhere unemployment insurance exists, financing is provided, in 80% of cases, by companies and workers, and the shares of each party are relatively higher, which allows for fairly decent benefits and especially those that can last up to two or even three years, depending on the employee's seniority and the regularity of their social security contributions.
But who knows? After two years of operation of the IPE, perhaps other more interesting formulas will be found. In the meantime, to complement the IPE mechanism, we are counting on the training-insertion system managed by ANAPEC...
Morocco - Unemployment: Who can benefit from the IPE?
To be eligible for the IPE, it is absolutely necessary to meet the following conditions:
- Having lost your job involuntarily;
- Justifying a period of insurance under the social security scheme of at least 780 days in the three years preceding the date of work stoppage, including 260 days during the last twelve calendar months;
- Being registered as a job seeker with the competent job market intermediation services;
- Not being entitled to an invalidity or retirement pension;
- Being fit for work;
- Days validated under voluntary insurance are not counted for the opening of entitlement to the IPE.
Morocco - Unemployment: The IPE formulas not selected
In addition to the one that was chosen, the CNSS studies had proposed two other benefit formulas, which are as follows:
- 50% of the reference salary without exceeding the amount of the social security ceiling, i.e. 6000 DH;
- 50% of the reference salary for the employee who has 780 to 1620 days of seniority in the scheme. This rate is increased by 2.5% for each insurance period of 216 days in addition to 1620 days without exceeding 70%. The benefit level cannot in any case exceed the social security ceiling.
These benefits would, however, require greater financing, which is why they were not selected. At least for this first stage of implementation of the IPE.
Salah Agueniou.
Lavieeco.com
Published on December 17, 2012.
Posted online on December 17, 2012.
