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Cape Verde - A pro-active approach to extending coverage to independent workers
Domésticos ―Operational Plan for Extending Social Security to Independent and
Domestic Workers ‖
- ILO, 2010. This document was approved in 2010 and will remain in force until 2013. It summarizes the strategy the institute has implemented to increase
independent coverage. Below, we introduce a summary of the main reforms and innovations introduced by Cape Verde, aimed at increasing the coverage of independent
workers.
5.2.1. Mandatory registration of independent workers
The declaration of mandatory social contribution payments by independent workers was essential as a starting point to initiate a pro-active strategy for the extension of
coverage. This measure was applied in the reform of the 2009 law. Prior to such reform, laws allowed independent workers to register voluntarily in social insurance, and coverage
was extremely low
5
. Few countries in sub-Saharan Africa implemented such requirement in their law.
In addition to the above requirement, INPS also implemented other reforms to favour the registration of independent workers. One example is the new possibility for workers
leaving the country in search of employment to remain within the system.
5.2.2. Benefits matching the benefits of employed workers
The benefits granted to independent workers were matched to the benefits established by law for employed workers. Such benefits include disability, old age, and survivors
pensions, sickness, maternity, and paternity leave, as well as in the event of adoption
6
. In the case of sickness benefits, beneficiaries may receive transfers during a
maximum period of 365 days. Particularly, as regards benefits in kind for sickness, beneficiaries are entitled to medical and hospital assistance, medications, and diagnostic
tests, among other benefits.
This benefit scheme represents an important incentive for independent workers to incorporate into the INPS.
5.2.3. Contributions according to income categories
The INPS adopted a contribution system based on income categories for independent workers. This mechanism is completely different from that applied to employed workers.
Workers must contribute with 19.5 per cent of the category of their choice; which is similar to the contribution salary. The value of the contribution is based on a reference
income, which may not be below the minimum salary for public administration. For example, if the Institute establishes a reference income of 13.986 Escudo de Cabo Verde
ECV, US 163, and the workers choose the number two category, the value of the contribution amounts to 5.460 ECV US 64, as shown in table 3.
5
Under the previous law, the only workers who were compulsorily required to contribute were independent workers under 45 years old, in the case of women, and under 50 years old, in the case
of men.
6
For old age benefits, the worker must contribute for at least 15 years, whereas for disability and life benefits, one must contribute for at least 5 years.
Innovations in extending social insurance coverage to independent workers
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Table 4. Cape Verde: Contribution base for independent workers, 2009
Category Calculation
Contribution amounts
1 1 x income x 19.5
2 730 2
2 x income x 19.5 5 460
3 3 x income x 19.5
8 190 4
4 x income x 19.5 10 920
5 5 x income x 19.5
13 650 ...
N n x income x 19.5
n 13 986 19.5
Source: Drafted on the basis of the Decree-Law no. 492009 of the 23
rd
of November, National Institue of Social Welfare INPS.
Since it consists of a relatively simple scheme, workers have no great difficulty at the time of paying contributions.
5.2.4. Pro-active approach to extending coverage to independent workers
One of the strategies generating the greatest impact in increasing coverage was the adoption of a
―pro-active approach‖ when relating to the target group, which in this case consists of independent workers and their organizations.
This approach consists of communication campaigns specifically targeting independent workers, together with a set of education and awareness- raising activities at
the local level, both in urban and in rural areas. The aim of the information addressed to independent workers is to raise awareness
among this section of the population regarding the need for social security and its advantages, since it is known that poor knowledge on this topic is one of the factors in
explaining the lack of incentive to register for social security.
INPS active intervention can be divided into three stages. In the first stage, the Institute focused its strategy in communicating with independent workers in urban areas,
and in areas where formal employment prevails. The second stage consists in establishing alliances with independent workers organizations, and the third involves the consolidation
of their presence in the countrys rural areas. As it proceeds to other stages, INPS wishes to achieve an increasing presence in rural areas.
Figure 4. INPS intervention to extend coverage to independent workers
Source: ILO, 2010a.
