17,000 end-of-service indemnity requests in 2011

Experts say phenomenon ‘socially alarming’

The National Social Security Fund (NSSF) received around 17,000 requests for end-of-service compensations throughout 2011, according to Mohammad Karaki, director general of the NSSF. The total value of indemnities stood at around $172 million.

Of all the requests filed for the end-of-service fund, only 20 percent were by employees who had reached the maximum authorized working age (64). The value of indemnities paid for these subscribers totaled $67 million. Some 63 percent of compensation requests were by employees who quit work before reaching the legal age. “This significant figure indicates that some institutions are resorting to replacing Lebanese employees with a foreign workforce that cannot subscribe to the NSSF,” said Karaki.

The remaining compensation requests were paid to employees who neither quit their jobs, nor ended their NSSF subscription, but asked to withdraw their indemnities early.

Kamal Hamdan, managing director of the Consultation and Research Institute, said: “These figures highlight an alarming social trend, especially as those who quit work before reaching the age of 64 lose between 15 and 50 percent of their end-of-service compensations.”

According to Hamdan, reasons for the early acquittal of work fall under two main motives: The dissatisfaction of employees with their careers, which often leads them to either seek work abroad or shift to informal professions (such as opening a shop or driving a taxi), and lack of trust in the strength of public social services.

People who are not covered by NSSF do not benefit from public healthcare services. Hamdan said that ending an NSSF subscription has a negative long-term impact on a family’s social status: “People who suspend their employment, and thus their NSSF coverage, are getting older, and they will eventually have to spend more on healthcare.”