A move to exempt employees from contributing one per cent of their monthly wages towards Bahrain’s Unemployment Fund has been shot down by the Shura Council.
The upper chamber of the National Assembly yesterday said the move would plunge the fund in dire straits.
First vice-chairman Jamal Fakhro was the only one in favour of the parliamentary amendment to the 2006 Unemployment Fund Set-up Law.
The fund’s revenues are made up of 1pc of monthly wages each from an employee, employer and the government – adding up to a total of 3pc.
Labour and Social Development Minister Jameel Humaidan said the current format of the fund ensures social solidarity in which all segments of the community contribute towards the welfare of the unemployed or provide protection from unemployment.
“The fund is in a healthy position because everyone is contributing and for that we decided last year to improve the benefits given to the unemployed.
“A simple calculation shows that the 1pc contribution made by one employee over the course of work has easily covered the unemployment payments and wages of others unemployed over six months.”He said that most of the fund’s contributions have come mainly from the 500,000 expatriate workers currently in the labour market.
“Only Bahrainis benefited from wage support over the pandemic with us spending around BD300 million from the fund to cover full or half wages besides giving support to 31,000 Bahraini jobseekers,” said Mr Humaidan.
However, Mr Fakhro said that workers’ contributions were unnecessary as the fund will continue to be strong for decades.
“We don’t want the fund scrapped, we just want workers to be relieved from paying the 1pc as they are feeling the pinch with increased VAT and rise in other expenses,” he said.
“The difference wouldn’t be much with the two other per cent continuing.”He pointed out that the fund had savings of BD900m before BD500m was withdrawn for various reasons.
“Had the savings not been touched due to the exceptional circumstances of the pandemic and other emergencies the fund could have been strong for 100 more years.”Earlier, Social Insurance Organisation (SIO) officials said the fund’s revenues fell to BD77m last year from BD78m in 2020.Out of the annual contributions, BD20m are paid by expatriate workers, they added.MPs, who earlier this month approved the move, said that the fund was in a healthy position despite paying for an early voluntary retirement scheme in 2019 and Bahrainis’ wages during the pandemic.The legislation has been referred back to Parliament for a second review.
Meanwhile, the Shura Council members unanimously approved a royal decree issued during the National Assembly recess to cover wages from June to August last year from the fund following a spike in the number of coronavirus cases.They also voted unanimously to approve the set-up law of the Organisation for Women Development in the Organisation of Islamic Co-operation.Shura Council Chairman Ali Saleh Al Saleh thanked his colleagues for their support since his appointment to the chair in 2006 that has led him to win the top Arab Parliamentarian Award last week.
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