The Labour, Youth, Employment and Disabled Persons state minister in the Prime Minister's Office (PMO), Ridhiwani Kikwete. Photo: Courtesy
By Adonis Byemelwa
The National Assembly has passed the Social Security (Amendment) Bill, 2024, bringing significant reforms aimed at enhancing the social security system.
Ridhiwani Kikwete, the Minister of State for Labour, Youth, Employment, and Disabled Persons in the Prime Minister's Office (PMO), presented the bill, highlighting key changes.
Among these are a reduction in penalties for late contributions and the introduction of flexibility for employees with multiple employers, allowing them to receive contributions from all employers with their consent.
The new law also enables members who have not yet reached retirement age to use part of their benefits as collateral for housing loans. Additionally, it allows contributions made after retirement, up to the age of 70, to be included in pension calculations.
The amendments affect several major pieces of legislation, including the National Social Security Fund Act, Cap. 50, the Public Service Social Security Fund Act, Cap. 371, and the Workers Compensation Act, Cap. 263.
A notable addition is Section 11A, which extends social security coverage to self-employed individuals and permits employers to make full or partial contributions on behalf of their employees.
The bill also revises Section 12(5), clarifying the contribution process for self-employed members, and introduces Section 12A, allowing employees with multiple employers to receive contributions from each with their consent.
“These amendments aim to give members greater flexibility in receiving contributions from multiple employers,” Kikwete explained. He further noted that the penalty for late contributions has been reduced from 5 percent to 2.5 percent under the amended Section 14(3), aiming to lower operational costs for employers and make fines more manageable.
The bill also grants the Social Security Board the authority to waive excess contributions with the minister's approval, reducing the financial burden on institutions struggling with fines.
New offenses have been established for employers who fail to register or obstruct inspectors, with Section 15 requiring the director general of a fund to ensure that the full amount is credited to the social security fund, even if deducted by an employer but not submitted. This measure is designed to protect the interests of beneficiaries.
Moreover, the amendments aim to improve the management of erroneously received contributions and broaden pension benefits for members who have been contributing beyond retirement age, particularly from 61 to 70 years old but do not meet the pension eligibility criteria.
The bill also mandates that employees of companies where the government holds at least a 30 percent share be registered with the Public Service Social Security Fund (PSSSF). It enhances the requirements for recording contributions, enabling members to easily access their contribution history.
A significant change is the repeal of Section 24, which previously allowed members to withdraw their contributions from the Social Security Fund and terminate their membership. This provision was deemed incompatible with social security regulations and more suited to a savings fund.
New provisions allow beneficiaries serving prison sentences to authorize, in writing, the payment of their benefits or any part thereof to a designated beneficiary. “These amendments aim to ensure the continued participation of incarcerated individuals in the distribution of their benefits,” the minister emphasized.
Additionally, the Workers Compensation Act has been amended to empower the board to modify or remove conditions related to benefit payments when justified. Section 39 has been revised to ensure that the application of time limits is calculated from the date of the relevant illness.
The bill also proposes excluding incentives from the salary used to calculate compensation, ensuring fairness among beneficiaries. Moreover, the requirement for employers to submit annual income reports to the fund by March 31st has been removed, granting the director general the authority to request these reports as needed.