Statutory schemes of social security (Directive 79/7)

• Author: Baci, Entela
• Pages: 80-83

80

7 Statutory schemes of social security (Directive 79/7)

7.1 General (legal) context

Surveys and reports on the practical difficulties linked to statutory schemes of social

security (Directive 79/7)

Over the last five years, several surveys and reports ha ve been published in Albania that

provide insights into the difficulties that workers face in practice in relation to social

security issues (in connection with Directive 79/7).

i. Decent Work Country Programme (DWCP) of Albania 2017-2021, published by the

ILO;250

ii. A research report on labour standards in Albania (2016).251

i. The DCWP and its priorities and outcomes are agreed upon after an extensive

process of consultation with the ILO' s constituents in the country. The strategic

priorities and outcomes will be pursued during the period 2017 -2021 through joint

action of the authorities and social partners in Albania and the ILO.252 Relevant

findings of this DCWP are:

• The pension system plays a central role in income security for the elderly an d

persons with disabilities. However, the Albanian pension system is facing a

number of challenges, notably the low social security coverage and weak

collection of social security contributions.253

• Evasion of social insurance contributions has been widespread. The non-

payment of social security contributi ons will directly result in larger n umbers

of the population receiving low social security benefits or no benefit rights at

all, thereby increasing the poverty risk.254

The DCWP makes some recommendations:255

• it is important to develop a legal definition of the informal economy in Albania.

Reducing informality implies addressing the problem through different entry

points, namely a better enforcement of the la w through strengthened labour

inspection, cross-checking of databases and the applica tion of adequate

penalties;

• the re-definition and simplification of the regulatory framework;

• the development of incentives to formalise by offering better and easier access

to social security, business development services and credit;

• the promotion of public awareness around the individual and collective benefits

of formalisation.

ii. The research r eport on labou r standards in Albania presents several findings about

the difficulties of workers in relation to social security:256

• The pension scheme has serious financial problems. Evasion of social insurance

contributions is widespread and the low participation rate of the active

250 ILO (2017), Decent Work Country Programme of Albania 2017-2021, available at:

https://www.ilo.org/europe/projects/WCMS_555313/lang--en/index.htm.

251 Institute for Democracy and Mediation (2016), Labour Standards in Albania – Research Report, available

at: http://idmalbania.org/wp-content/uploads/2016/12/IDM_LabourStandards_ENG.pdf.

252 Source: https://www.ilo.org/europe/projects/WCMS_555313/lang--en/index.htm.

253 ILO (2017), Decent Work Country Programme of Albania 2017-2021, p. 12.

254 ILO (2017), Decent Work Country Programme of Albania 2017-2021, p. 12.

255 ILO (2017), Decent Work Country Programme of Albania 2017-2021, pp. 19-20.

256 Institute for Democracy and Mediation (2016), Labour Standards in Albania – Research Report, pp. 35, 55-

56, 86-87.