1.

Social Security

1.
Mauritius maintains an extensive set of social policies and programmes
consisting of free education, free health care, a basic retirement pension, assistance
to families with special needs, low cost housing, subsidies for rice and flour, social
aid transfers, and several micro-credit schemes.
2.
Social Security benefits, more precisely pensions for old age and
blindness, were introduced in 1950 subject to a means test administered by the then
Public Assistance Department. The purpose was to help the poorest sections of the
society. The initial rate was Rs 15 per month paid to all persons aged 65 and over
and to blind persons aged 40 and over. The means test was surrounded by
controversy from the beginning on account of whether the term income included
casual earnings or not and the difficulty of checking the information provided on
the prescribed forms. The test was finally abandoned in 1957. In the meantime,
in 1953, the qualifying age for women was reduced to 60 while the rate was
increased to Rs 20 a month. By the end of 1959, the number of pensioners had
reached 26,795. Today, there are multiple rates for different age groups for basic
retirement pension (BRP). A large number of social security schemes is
operational.
From a fairly simple, single-benefit system at its inception,
social security payments have evolved into a multi-benefit and relatively complex
scheme.
3.
Social Security benefits can be classified as non-contributory benefits or
contributory benefits.
Non-contributory benefits are entirely financed by
Government and are payable to Mauritian citizens under certain conditions. These
benefits include:
(a)

basic pensions, which cover the elderly, invalids, widows and orphans;

(b)

allowances such as Social Aid, Food Aid, Unemployment Hardship

Relief, Cyclone Refugee Allowance and Funeral Grant, which are
payable to the low-income segment of the population; and

(c)

inmates allowance and indoor relief payable to, or on behalf of, those
Mauritians residing in government-subsidised institutions (such as oldpeople homes, infirmaries and orphanages) provided they would have
otherwise benefited from a basic pension or from Social Aid.

4.
Contributory benefits, on the other hand, are payable only to, or on behalf
of, those persons (mainly employees of the private sector) who have paid
contributions to the National Pensions Fund (NPF). The contributory pensions

include old age, invalidity, widows and orphans pensions in addition to industrial
injury allowances. In the case of contributory benefits, the allowances payable
vary according to the amount contributed to the NPF in respect of the insured
worker. For those persons whose contributions are marginal, Government
guarantees a minimum contributory pension.
5.
However, the social security system in place has been slow to adjust to
the rapid evolution and modernisation of the society. The social assistance
programmes need to be more effectively targeted and efforts made to improve and
consolidate the outreach of ongoing delivery of services to the most vulnerable
groups. Government has adopted a more structured and coordinated approach to
poverty reduction in general and social protection in particular, building on
previous initiatives, modifying and supplementing as needed.
It aims at
modernising the current pension system to ensure its financial viability and
equitable distribution. The goal is also to provide adequate care for the poor while
offering the better-off adequate opportunities for self-sustenance. A white paper on
the reform options is under preparation and will be circulated for wide
consultation.
6.
The reform of the social policy of Government aims at providing the
countrys diverse society with the social infrastructure needed to meet the socioeconomic objectives. The development objectives will ensure equitable access to
quality education, enhance income generating opportunities, and foster social
cohesion and stability. The social insurance objectives will insure against poverty
in old age, provide incentives to individual savings, and cover sudden loss of
income and disability. The social assistance objectives will guarantee a minimum
level of socially acceptable expenditure needs, care for special vulnerable groups
and prevent social exclusion.
Welfare Programmes
7.
The key welfare programmes that provide an extended safety net for the
majority of the population are described below:
(a)

Social Aid
Social Aid (SA) is an income-tested scheme. It is payable to the head of a
family, who is incapable of earning his living adequately and who has
insufficient means to support himself and his dependents. Social Aid is
payable to the poorer section of the population, including the dependents of
prisoners and abandoned spouses, especially those with dependent children.

The allowance payable is calculated as the difference between the net

income and the expected overall expenditure of the family.
A number of other benefits are equally payable to a SA beneficiary, which
include the provision of free spectacles, wheelchairs and hearing aids.
Furthermore, allowances are provided for payment of examination fees for
SC, GCE, HSC and IVTB courses. Other allowances include refund of
travelling for attendance of medical treatment, compassionate allowance for
severe illness, carers allowance, and allowances to fire victims, cyclone
refugees, and flood victims as well as bad weather allowance for fishermen.
In 2003/04, some 16,300 families benefited from the Social Aid programme.
(b)

Food Aid
The Food Aid Scheme was introduced in March 1993 when government
subsidy on rice and flour was temporarily discontinued. Under the Food Aid
Scheme, the monthly stipend has recently been increased from Rs 30 to
Rs 50 for the purchase of rice and flour. The scheme covers the needy,
which comprises the following:
recipients of Social Aid and their dependents;
beneficiaries of Unemployment Hardship Relief; and
needy beneficiaries of the basic pension under the National Pensions
Act, i.e., beneficiaries of Basic Retirement Pension, Basic Widows
Pension, Basic Invalids Pension and Basic Orphans pensions, who
would otherwise have qualified to receive social aid.
In 2003/04, Rs 17.4 million were provided under the Food Aid programme,
in addition to the subsidy on rice and flour.

(c)

Indoor Relief
Indoor relief is the grant paid to an institution in respect of every inmate,
who would have otherwise benefited from a basic pension or from Social
Aid. A relief of about Rs 30 million was provided in 2003/04.

(d)

Inmates Allowance
Inmates Allowance refers to the pocket money given to certain residents of
government-subsidized institutions and of the only government psychiatric
hospital, Brown Sequard Hospital. The number of persons, who received

such pocket money, was around 900 in 2003/04 with a total disbursement of
Rs 4.7 million.
(e)

Unemployment Hardship Relief

The Unemployment Hardship Relief (UHR) is payable to unemployed heads
of families whose family income is not sufficient to meet the needs of the
members. The head should be registered as unemployed at the Employment
Exchange and be willing and able to take up employment and be actively
looking for work. A disabled person, who can work but has not been able to
find a job, receives a UHR in addition to his Basic Invalids Pension.
In 2003/04, the total amount of benefits disbursed was Rs 2.4 million.

(f)

Funeral Grant
The funeral grant covers the funeral expenses of low-income families.
Around Rs 5.4 million were provided for the grant in 2003/04.

(g)

Charitable institutions
Charitable institutions raise funds, collect donations and receive subsidies
from Government (capitation grant), which enable them to provide care,
protection and assistance to children and elderly sick people.

Pension Issues
8.
Mauritius has a well functioning, albeit quite generous, three-tier pension
system, which provides non-contributory basic pensions to elderly, widows,
invalids and orphans, requires mandatory participation in an earnings-related
system for private and public sector employees in separate schemes, and provides
for supplementary pensions on a voluntary basis.
9.
The first tier, namely the basic retirement pension scheme, which is
subject to residence test, has a strong poverty reduction and redistributive effect.
In June 2004, the number of beneficiaries stood at 119,448 accounting for
Rs 3,074 million or 1.9% of GDP. By the year 2041, the number of beneficiaries
is projected to increase to 354,000. The current pay-as-you-go system has
7.2 workers subsidising every retiree. By 2041, the ratio would decline to 2.4.
The system needs reforms for at least two reasons:
(a)

the active working population is shrinking while the number of retired

people is increasing; and

(b)

the economic weight of pension, today equivalent to 1.9% of GDP, will

rise to 3-5% in 2041 to become a major burden on government finances.

10.
The second tier, which is mandatory, is made up of two contributory
schemes (one for the private sector and the other for parastatal bodies) and a noncontributory one for civil servants and local authorities (except for Service Family
Protection Schemes for survivors, which are contributory). Contribution to the
National Pensions Fund (NPF) is mandatory for private sector employees as well
as employers. The Civil Service Pension Scheme as well as the scheme for local
authorities is non-contributory. Parastatal pension funds, to which contributions
are made by employers only, offer benefits similar to those provided by the civil
service scheme and the public corporations contribute to the appropriate fund. All
employees, that is, those of the private sector, civil service and statutory bodies
also benefit from the National Savings Fund (NSF), which provides a lump sum at
retirement. Contributions to the NSF are made by employers only.
11.
The mandatory schemes for private sector employees will also be subject
to the pressure of the ageing population. It would mean lesser people contributing
to the National Pension Scheme while a larger number of members would become
eligible for pension benefit payments. These pensions will, moreover, have to be
paid over a longer period of time in view of longer life expectancy of Mauritians in
the coming decades. Assuming current level of employment, preliminary
projections indicate that by 2010 the number of civil service pensioners will
represent 75% of the number of employees and by 2025 there will almost be as
many pension beneficiaries as employees in the civil service. As for the Civil
Service Pension Scheme, payments will be equivalent to nearly 35% of the wage
bill of the Civil Service by 2025 compared with 20-25% presently.
12.
The third tier comprises private voluntary occupational schemes and
pension schemes provided by insurance companies to individuals. These schemes
are promoted under the present tax system. Most of the voluntary occupational
schemes are Defined Benefit (DB) schemes. There are at present over 1,000
private occupational pension funds covering about 10,000 employees.
Pension Reform
13.
With increasing longevity, there will be a larger number of people
entitled to the BRP for a much longer period. Given the substantial budgetary
resources required for social security payments, it is essential to undertake the
reform with a view to meeting these payments within a realistic macroeconomic
framework. In this context, the main policy objectives will be to ensure the

sustainability and fairness of the system, to make a significant dent on poverty, and
to adopt a client-oriented approach.
14.
With a view to modernising the pension system and reducing the
eventual fiscal risk, Government is reviewing the functioning of the three pillars of
the system and examining reform options and the sequencing of the reforms. The
reform process has already been initiated with the targeting of the basic retirement
pension. Reforms of the second and third pillars will essentially touch on the
technical aspects of individual contributions to the NPS, asset management of the
NPF and the introduction of a sound regulatory and supervisory framework, which
together will render the two pillars economically sound and attractive. It is
expected that a better earnings-related system will evolve from the reforms of the
second and third pillars, which will then complement the undergoing reform of the
first pillar. Some studies have been commissioned and their findings would
provide inputs for the White Paper in view of national consultations.
15.
Government is committed to continuing reforms in the pension system in
order to ensure that, on retirement, pensioners get a decent level of pension and
that the working population does not pay too heavy a price towards making the
system financially sustainable. It is a comprehensive and long term process. It
requires examining all the issues involved in reforming the system and building a
national consensus through close and extensive consultations centred on
(a) guaranteeing benefits to those already retired, (b) offering workers options of
staying in the pay-as-you-go system or opting out voluntarily, (c) introducing a
new restructured defined contribution pension system for new entrants, and
(d) establishing a regulatory and supervisory framework for occupational private
pension schemes.

SUMMARY OF MEDIUM TERM EXPENDITURE FRAMEWORK PROGRAMMES OF SOCIAL SECURITY(Rs MILLIONS)

2003/04

2004/05

2005/06

2006/07

2007/08

Actual

Revised

Projected

Projected

Projected

Government Direct
Allocation Revenue
Code

Total

Government Direct
Allocation Revenue

Total

Government Direct
Allocation Revenue

Total

Government Direct
Allocation Revenue

Total

Government Direct
Allocation Revenue

Total

Programme

06-101

Deprt'al Mgt-Social Security

06-102

Social Aid & National Solidarity

43.9

0.0

43.9

44.6

0.0

44.6

46.0

0.0

46.0

47.4

0.0

47.4

49.0

0.0

49.0

845.9

0.0

845.9

918.9

0.0

918.9

1,012.6

0.0

1,012.6

1,005.9

0.0

1,005.9

1,028.7

0.0

1,028.7

06-103

National Pensions

4,591.5

0.0

4,591.5

5,031.9

0.0

5,031.9

5,612.8

0.0

5,612.8

5,987.6

0.0

5,987.6

6,397.6

0.0

6,397.6

06-104

Social Welfare
Total

117.1
5,598.3

0.0
0.0

117.1
5,598.3

129.4
6,124.8

0.0
0.0

129.4
6,124.8

135.3
6,806.7

0.0
0.0

135.3
6,806.7

140.3
7,181.2

0.0
0.0

140.3
7,181.2

147.3
7,622.6

0.0
0.0

147.3
7,622.6

MEDIUM TERM EXPENDITURE FRAMEWORK

Ministry of Social Security, National Solidarity and Senior Citizens Welfare & Reform
Institutions
Programme 06-101: Departmental Management

Actual
2003/4

Rev Est
2004/5

Medium Term Estimates

2005/6 2006/7 2007/8

Programme, by Economic Classification

Rs 000

Expenditure
Recurrent Items
Staff Costs
Goods and Services
Transfer Payments
Total Recurrent
Capital Items
Construction
Improvement/Extension
Vehicles, Equipment and Furniture
Other Capital
Total Capital
Total Expenditure, by Economic Classification
Revenue, by Source
Central Government Allocation

Rs 000

Rs 000

Rs 000

Rs 000

25,541
17,202
0
42,743

27,230
16,900
0
44,130

27,998
16,962
0
44,960

29,333
17,081
0
46,414

30,876
17,150
0
48,026

0
0
1,134
0
1,134
43,877

0
0
500
0
500
44,630

0
0
1,000
0
1,000
45,960

0
0
1,000
0
1,000
47,414

0
0
1,000
0
1,000
49,026

43,877

44,630

45,960

47,414

49,026

Programme, by Activity
Expenditure, by Activity
Programme Management and Administration
Provision for Travelling and Transport
Provision for Rent
Provision of Communication Services
Other Provisions
Total Expenditure, by Activity

Rs 000 Rs 000 Rs 000 Rs 000 Rs 000

22,350 23,895 24,638 25,933 27,426
3,191
3,335
3,335
3,400
3,450
9,328
9,200
9,200
9,430
9,666
5,147
4,530
4,920
5,043
5,169
3,861
3,670
3,867
3,608
3,315
43,877 44,630 45,960 47,414 49,026

MEDIUM TERM EXPENDITURE FRAMEWORK

Ministry of Social Security, National Solidarity and Senior Citizens Welfare & Reform
Institutions
Programme 06-101: Departmental Management

2003/4

2004/5

2005/6

2006/7

2007/8

Posts and Programme Indicators

Posts (Number)
Managerial / Administrative / Technical staff
Support staff
Other staff
Posts, Total
Programme Indicators
Ratio of employees of administration to the Ministry
Number of draft bills submitted to Parliament
Total overtime as a percentage of total personal
emoluments

21
100
29
150

21
96
29
146

21
100
30
151

21
100
30
151

21
100
30
151

13.2%
2

12.7%
4

12.7%
2

12.5%
2

12.5%
2

2.2%

2%

2%

2%

2%

MEDIUM TERM EXPENDITURE FRAMEWORK

Ministry of Social Security, National Solidarity and Senior Citizens Welfare & Reform Institutions
Programme 06-102: Social Aid and National Solidarity
Actual Rev Est
2003/4 2004/5

Medium Term Estimates

2005/6
2006/7
2007/8

Programme, by Economic Classification

Expenditure
Recurrent Items
Staff Costs
Goods and Services
Transfer Payments
Total Recurrent
Capital Items
Construction
Improvement/Extension
Vehicles, Equipment and Furniture
Other Capital
Total Capital
Total Expenditure, by Economic Classification
Revenue, by Source
Central Government Allocation

Rs 000

Rs 000

51,165 52,100
17,959 20,295
765,457 829,390
834,581 901,785

Rs 000
53,565
45,075
848,095
946,735

Rs 000
56,072
45,428
867,395
968,895

Rs 000
58,813
45,681
892,195
996,689

8,233
7,500
58,700
30,000
25,000
54
100
200
0
0
0
0
0
0
0
2,993
9,500
7,000
7,000
7,000
11,280 17,100
65,900
37,000
32,000
845,861 918,885 1,012,635 1,005,895 1,028,689

845,861 918,885 1,012,635 1,005,895 1,028,689

Programme, by Activity

Expenditure, by Activity
Programme Management and Administration
Provision for Rent
Provision for Travelling and Transport
Grant to NATRESA
Ilois Welfare Fund
Rice and Flour Subsidies
Social Aid and Other Social Aid Eligibility
Determination
Grant in Aid to Charitable Institutions
Cash Assistance to Fisherman
Welfare of Vulnerable Groups and Seniors
Provision for Assistance and Training of Disabled
Persons
Contribution to Local Organisations
NGOs Trust Fund
Provision for Funeral Grants
Allowances for Medical Boards and Domiciliary
Visits
Free Vaccination
Construction
Other Provisions*
Total Expenditure, by Activity

Rs 000 Rs 000
43,368 44,600
3,114
3,320
7,797
7,500
21,493 24,500
2,300
2,300
395,974 425,000

Rs 000
45,565
3,320
7,500
29,000
2,300
425,000

Rs 000
47,612
3,320
7,550
27,000
2,300
425,000

Rs 000
49,991
3,320
7,600
28,000
2,300
425,000

220,700 241,500
35,571 40,000
35,644 36,300
16,696 16,000

261,000
42,500
39,000
16,000

276,500
45,000
41,300
16,000

293,500
47,700
43,800
16,000

13,700
5,550
18,000
6,000

14,000
5,600
19,050
6,000

14,200
5,700
20,350
6,000

13,497
4,800
14,300
5,425

11,500
5,200
16,850
6,000

0
8,500
19,500
19,500
19,500
0
0
6,000
6,000
6,000
8,286
7,600
40,000
30,000
25,000
16,896 22,215
32,700
14,163
14,728
845,861 918,885 1,012,635 1,005,895 1,028,689

* Other provisions for FY2003/04 and 2004/05 include expenditure on African Union Ministerial Conference

MEDIUM TERM EXPENDITURE FRAMEWORK

Ministry of Social Security, National Solidarity and Senior Citizens Welfare & Reform Institutions
Programme 06-102: Social Aid and National Solidarity
2003/4

2004/5

2005/6

2006/7

2007/8

Posts and Programme Indicators

Posts (Number)
Managerial / Administrative / Technical staff
Support staff
Other staff
Posts, Total

203
68
90
361

203
68
90
361

204
68
90
362

204
70
90
364

204
70
90
364

Programme Indicators
Number of recipients:
- low income
- unemployed
- disabled
- fishermen
Number of charitable institutions receiving transfers
Number of local NGOs receiving transfers

10,953
402
5,393
2,226
25
41

11,000
425
5,500
2,240
25
44

11,200
450
5,700
2,250
26
44

11,400
475
5,900
2,260
27
45

11,500
480
6,000
2,270
28
46

MEDIUM TERM EXPENDITURE FRAMEWORK

Ministry of Social Security, National Solidarity and Senior Citizens Welfare & Reform Institutions
Programme 06-103: National Pensions
Actual
2003/4

Medium Term Estimates

2005/6
2006/7
2007/8

Rev Est
2004/5

Programme, by Economic Classification

Expenditure
Recurrent Items
Staff Costs
Goods and Services
Transfer Payments
Total Recurrent
Capital Items
Construction
Improvement/Extension
Vehicles, Equipment and Furniture
Other Capital
Total Capital
Total Expenditure, by Economic
Classification
Revenue, by Source
Central Government Allocation

Rs 000

Rs 000

Rs 000

Rs 000

Rs 000

79,142
12,103
4,500,290
4,591,535

84,720
16,872
4,930,308
5,031,900

85,700
16,810
5,510,310
5,612,820

90,399
16,856
5,880,310
5,987,565

95,382
16,903
6,285,310
6,397,595

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

4,591,535

5,031,900

5,612,820

5,987,565

6,397,595

4,591,535

5,031,900

5,612,820

5,987,565

6,397,595

Programme, by Activity
Expenditure, by Activity
Programme Management and Administration
Annual Transfer to the National Pension Fund
Payment to Mauritius Post for Pension
Disbursement
Provision for Medical Boards and Domiciliary
Visits
Provision for Travelling and Transport
Other Provisions
Total Expenditure, by Activity

Rs 000
69,800
4,500,000

Rs 000
74,120
4,930,000

Rs 000
76,000
5,510,000

Rs 000
80,599
5,880,000

Rs 000
85,532
6,285,000

4,600

4,600

4,600

4,600

4,550
8,542
8,643
4,591,535

6,000
8,800
8,380
5,031,900

6,000
8,800
7,420
5,612,820

6,000
8,900
7,466
5,987,565

6,000
8,950
7,513
6,397,595

MEDIUM TERM EXPENDITURE FRAMEWORK

Ministry of Social Security, National Solidarity and Senior Citizens Welfare & Reform Institutions
Programme 06-103: National Pensions
2003/4

2004/5

2005/6

2006/7

2007/8

Posts and Programme Indicators

Posts (Number)
Managerial /Administrative /Technical staff
Support staff
Other staff
Posts, Total
Programme Indicators
Number of pensioners receiving pension
payments
Average pension paid annually (Rs)

297
243
35
575

297
262
35
594

297
262
35
594

300
265
35
600

300
265
35
600

200,000
22,500

200,000
24,650

200,000
27,550

203,000
28,965

206,045
30,503

MEDIUM TERM EXPENDITURE FRAMEWORK

Ministry of Social Security, National Solidarity and Senior Citizens Welfare & Reform
Institutions
Programme 06-104: Social Welfare
Actual
2003/4

Rev Est Medium Term Estimates

2004/5 2005/6 2006/7 2007/8

Programme, by Economic Classification

Expenditure
Recurrent Items
Staff Costs
Goods and Services
Transfer Payments
Total Recurrent
Capital Items
Construction
Improvement/Extension
Vehicles, Equipment and Furniture
Other Capital
Total Capital
Total Expenditure, by Economic Classification
Revenue, by Source
Central Government Allocation

Rs 000

Rs 000

Rs 000

Rs 000

Rs 000

7,343
8,630
9,135
350
490
490
103,040 113,800 118,200
110,733 122,920 127,825

9,585 10,059
496
502
122,700 127,200
132,781 137,761

0
0
0
562
1,000
1,000
2,773
2,000
3,000
3,003
3,500
3,500
6,338
6,500
7,500
117,071 129,420 135,325

0
0
1,000
1,000
3,000
5,000
3,500
3,500
7,500
9,500
140,281 147,261

117,071 129,420 135,325

140,281 147,261

Programme, by Activity
Expenditure, by Activity
Programme Management and Administration
Grant to SILWF
Social Welfare Centres
Other Provisions
Total Expenditure, by Activity

Rs 000 Rs 000 Rs 000 Rs 000 Rs 000

6,154
5,630
6,135
6,535
6,959
100,543 111,500 115,000 120,000 124,500
8,273
9,300
9,200
9,700
9,700
2,101
2,990
4,990
4,046
6,102
117,071 129,420 135,325 140,281 147,261

MEDIUM TERM EXPENDITURE FRAMEWORK

Ministry of Social Security, National Solidarity and Senior Citizens Welfare & Reform
Institutions
Programme 06-104: Social Welfare
2003/4

2004/5

2005/6

2006/7

2007/8

Posts and Programme Indicators

Posts (Number)
Managerial / Administrative / Technical staff
Support staff
Other staff
Posts, Total
Programme Indicators
Number of social welfare centres receiving grants
Average grant per social welfare centre
Total overtime as a percentage of total personal
emoluments

43
10
5
58

43
10
5
58

43
10
5
58

43
10
5
58

43
10
5
58

52
75

52
90

52
100

52
100

52
100

0.6%

1%

1%

1%

1%