Observation (CEACR) - adopted 2012, published 102nd ILC session (2013)

Equality of Treatment (Social Security) Convention, 1962 (No. 118) - Egypt (Ratification: 1993)

The Committee notes the adoption in 2010 by the Parliament of new legislation on pensions that will replace the public pay-as-you-go (PAYG) pension system by a system of individual accounts as of 2012 and establish a minimum pension funded from the state budget for all residents aged 65 or older, including individuals who have not contributed to the pension system. The Committee hopes that, in the context of this reform, the Government will take the necessary measures with a view to giving effect to the following provisions of Convention No. 118 to which it has been drawing the Government’s attention since the Convention was ratified.

Article 3 of the Convention. Equality of treatment The Committee regrets to note that the Government’s report does not contain any reply to the previous comments which read as follows:

According to section 2(2) of the Social Insurance Act (No. 79 of 1979), the provisions of this Act apply to foreign nationals on condition that the duration of their contract is not less than one year, and that there is a reciprocity agreement between their country of origin and Egypt, subject to non violating the provisions of conventions ratified by Egypt. The Government states nevertheless that the nationals of countries which have ratified Convention No. 118, enjoy insurance benefits provided under the Social Insurance Act regardless of the duration of their contracts or the existence of the reciprocity agreement. The same statement is made by the Government in its report of 2007 on Convention No. 19. The Committee takes due note of these statements and understands that the Convention has a higher rank in the national legal system than the law. The Committee notes that the Government has not supplied any documentary evidence requested by the Committee proving that the above interpretation given by the Government is applied in practice by the social security institutions. The Committee also recalls that in its previous reports on the application of Conventions Nos 19 and 118 the Government has been consistently making the opposite statement that foreign nationals could enjoy social insurance benefits subject to the duration of their contract being not less than one year. In this situation and in order to dissipate any doubts as to the fact that the requirements of the Convention overrule the abovementioned limitations contained in the Social Insurance Act, the Committee asks the Government to instruct the responsible social security institutions in the country to disregard the duration of contract and reciprocity agreement requirements under section 2(2) of the Social Insurance Act with respect to the nationals of 37 countries which have also ratified Convention No. 118, and for the accident compensation benefits, with respect to the nationals of 120 countries which have also ratified Convention No. 19.

Article 5. Payment of benefits abroad. Referring to the issues raised in the Committee’s previous comments, the Government indicates that beneficiaries residing abroad are classified by country of residence. Insurance and pension benefits are regularly transferred each month without any financial burden on beneficiaries in cases where bilateral agreements have been concluded with the country of residence of the beneficiary. This has so far been the case with Cyprus, Greece, the Netherlands, Sudan and Tunisia and the Government is willing to conclude more such agreements. In the absence of bilateral agreement, beneficiaries need to justify pension entitlements with the Egyptian embassies or consulates at their place of residence in order to have their pensions paid to their bank account inside Egypt. They may afterwards transfer their pensions to their country of residence through the international banking system.

While it takes due note of this information, the Committee once again stresses that with respect to its own nationals and nationals of any other member that has accepted the Convention’s obligations for the branches in question, Article 5 obliges the ratifying States to export benefits abroad even in the absence of any bilateral social security agreements with the country of nationality or the country of residence of the beneficiary concerned and to take unilateral measures to this effect. By placing the obligation to transfer benefits abroad on the State, Article 5 of the Convention specifically seeks to prevent situations where beneficiaries would have to make their own individual arrangements for the transfer of their entitlements abroad at their own expense. By ratifying the Convention, the Government has undertaken to ensure that the responsible social insurance institutions shall deliver the abovementioned benefits to the new place of residence of the beneficiary outside Egypt and shall bear the cost of such transfer. For this purpose, appropriate banking arrangements shall be put in place with the help of the National Bank, if need be, and use shall be made of the administrative assistance of the countries concerned, which they have to afford to Egypt free of charge under Article 11 of the Convention. The Committee observes that, in the absence of any bilateral agreement, the lack of practical methods for pensions transfer outside of Egypt often leads beneficiaries in practice to apply for lump sums (in accordance with sections 27 and 28 of the Social Insurance Act), which is contrary to the letter and the very purpose of the Convention, even when this is done at the request of the beneficiary. The Committee therefore once again strongly urges the Government to institute an effective system of the transfer of the Egyptian social security benefits abroad by taking appropriate measures either unilaterally or within the framework of bilateral and multilateral social security agreements with the countries with the highest number of pension beneficiaries. The Government may wish to seek technical assistance from the Office concerning the existing international legal frameworks for the maintenance of the acquired rights and rights in course of acquisition mentioned in Articles 7 and 8 of the Convention.

Article 10. Coverage of refugees and stateless persons. Referring to the Committee’s previous comments, the Government states that refugees from Palestine and South Sudan are treated on an equal basis with Egyptian nationals with respect to social security. The Committee understands that all refugees and stateless persons other than the ones mentioned above also benefit from the provisions of the Convention without any condition of reciprocity and asks the Government to confirm such understanding in its next report.