Ambitious reforms pave way for universal social protection

Promulgation of the law marks the culmination of an ambitious reform process led by Tawazun, the high-level government programme for fiscal balance (now Estidamah), with the close support of ILO.

The comprehensive reforms entail a complete restructuring of the contributory pension system, with the integration of 11 pension funds into one single national scheme to cater for all workers in the private and public sector.

Oman is also the first country in the GCC to establish a social insurance scheme for maternity and paternity, and sickness cash benefits, ILO stated.

Among groundbreaking features, the new law introduces government-funded universal social protection benefits, including a cash benefit for all children under the age of 18, a universal old age pension for senior citizens over the age of 60, and a universal disability allowance. In a bid to increase efficiency and coherence, all government and contribution funded social protection benefits will be administered by Social Protection Fund, a newly established unified social protection agency.

The new law also significantly expands protection to migrant workers in Oman, who represent over three quarters of the country’s working population. Migrant workers will be covered for employment injury, maternity and sickness under the same terms as national workers. For the first time in the region, a national provident fund will also be established to administer end-of-service benefits to migrant workers.

The reforms set a new regional benchmark for alignment with international labor standards in the area of social security, and the progressive realization of a rights-based universal social protection framework, in line with ILO Social Protection Floors Recommendation, 2012

“Inspired by principles enshrined in the Omani Constitution and the goals expressed in its Vision 2040, the government has embraced improving well-being and social protection as a central strategic priority. As Oman strives towards a more diversified and productive economy, protecting people remains at the core of its commitments. Rights-based and inclusive social protection are essential pillars for fostering sustainable economic progress, ensuring that no-one is left behind,” said Nasser al Jashmi, Secretary-General of Ministry of Finance and Supervisor of the National Programme for Fiscal Sustainability and Financial Sector Development or Estidamah.

“We congratulate the government, employers and workers in Oman for achieving this major milestone,” said Ruba Jaradat, ILO’s Regional Director for the Arab States. “The new legislation sets a new vision for social protection in Oman and paves the way towards universal social protection in the sultanate, establishing Oman as a reference for other countries in the region. Inclusive, comprehensive, equitable and sustainable social protection systems are critical for countries in the region to further ongoing social and economic transformations. Oman is showing that ambitious change in the region is possible, when it is rooted in international labour standards, careful analysis and social dialogue,” she added.

“It is difficult to overstate the magnitude of the series of reforms Oman has set out to tackle: from fully revamping the tax and subsidy system, to completely restructuring its pension and contributory social protection system, to an ambitious re-think of its approach to reaching the most vulnerable in society, and providing migrant workers with key workplace protections,” said Mia Seppo, ILO’s Assistant Director-General for Jobs and Social Protection.

In recent years, the pension and social protection systems in Oman have faced growing challenges concerning sustainability, adequacy and effectiveness in providing needed protection to citizens and workers. Fragmented schemes have caused gaps in coverage and comprehensiveness, hindered efficiency and discouraged workers’ mobility between economic sectors.