Able to talk, namely via web-services, with other procedures, in order to reduce informal economics
CONTEXTUALIZING SOCIAL ASSISTANCE
Once upon a time a very old grandfather came to live with his daughter, his daughter’s husband and their son. The grandfather was too feeble to work in the fields and too forgetful to be helpful in the house. The husband was highly annoyed to have an extra mouth to feed and he hated the way the old man slurped his soup and spilled things on the table at mealtime.
One day the husband decided he had had enough. He asked his son to take his grandfather out to the barn and give him a horse blanket to stay warm. When the boy, who loved the old man, began to cut the blanket in half with a knife, his father cried out, “What are you doing?”
“I am cutting the blanket in half,” said the boy, “so that when you are old and my wife put you out in the barn you will have something to keep you warm.” The old man was taken back into the house where he was given a proper blanket and place at the table for the rest of his life.
This story, adapted from the brothers Grimm version of a very old oral tradition, illustrates a permanent and global concern, told with small variations. In Japan, the father makes a basket to throw grandfather into the river, and the kid says “When you dispose of grandfather, bring back the basket, because we will need to use it for you someday”.
Social Assistance: History and Mindsets
For centuries, family cohesion was in charge of inter-generational and social assistance. With a larger scope than families, mutualist initiatives, like Italian “Monti di Pietà”, Spanish “Arcas de Misericordia” and Portuguese “Misericórdias” emerged in the late middle age as financial organizations with charity purposes. The Industrial revolution dramatically exacerbated social care needs. However, as described in Charles Dickens’s Oliver Twist, dominant thinking was directed not to provide relief but, on the opposite, to maximize and benefit from “the poor’s utility”.
As remembered by a recent World Bank’s Report, “The Poor Laws of 1601 and 1834″ established harsh criteria for accessing social assistance. The laws also influenced thinking about social assistance for centuries. In the United Kingdom, it was only 70 years ago that the Beveridge Report, with its recommendations embedded in the 1948 National Assistance Act, marked the end of the era evoked by Dickens.”
During the 19th-century, mutual consciousness was clearly developed. Many of the former initiatives were transformed into neutral institutions regarding religion, which was in their origin. In Italy, “Montepios” succeeded “Monti di Pietà”. In England, “friendly societies” with a similar mutualist profile, contributed to overturning the workhouse system imposed by the New Poor Law of 1834.
The Improbable Birth of Modern Social Insurance
In 1889, led by Otto von Bismarck, Germany became the first country in the world to adopt a nationwide old-age social insurance program: “those who are disabled from work by age and invalidity have a well-grounded claim to care from the state.” Workers and voters’ satisfaction, economic global efficiency and protection against radical socialist ideas were the goals. While in England the mindset about social assistance was influenced by the Poor Laws, Germany built a comprehensive system of income security, based on social insurance principles, including:
- retirement benefits (1889),
- disability benefits (1889),
- workers’ compensation program (since 1884),
- sickness insurance (since 1883),
- and unemployment insurance (later added in 1927).
From Welfare State to Global Human Right
With mandatory participation and contributions from employees, employers, and government, the German system became the model progressively followed by a large number of nations. Great Britain followed in 1911 (extended in 1948, after WWII) and, until the United States implemented its system in 1935 (after 1929 great depression), 27 nations around the world already had an old-age retirement benefits contributory program in place, and another 26 had introduced at least one other contributory social insurance program.
These countries were Argentina, Australia, Austria, Belgium, Bolivia, Brazil, Bulgaria, Canada, Chile, China, Columbia, Costa Rica, Cuba, Czech-Slovakia, Denmark, Ecuador, Estonia, Finland, France, Germany, Great Britain, Greece, Guatemala, Hungary, Iceland, India, Irish Free State, Italy, Japan, Latvia, Lithuania, Luxembourg, Mexico, Netherlands, New Zealand, Nicaragua, Norway, Palestine, Panama, Paraguay, Peru, Poland, Portugal, Romania, Soviet Union, Salvador, Serb-Croat-Slovene Kingdom, South Africa, Spain, Sweden, Switzerland, Uruguay, and Venezuela.
CONTRIBUTORY SOCIAL INSURANCE (1934)
# Countries in place | |
Old Age | 27 |
Survivors | 20 |
Disability | 20 |
Health/Medical | 27 |
Unemployment | 22 |
Workers’ Compensation | 53 |
Family Allowances | 16 |
In 1934, Old Age Benefits were already in place in 27 countries. Trends in social assistance attest to significant global progress in the last decades. According to the World Bank’s database on social protection ASPIRE indicators, social assistance has largely spread to emerging and developing countries.
The OECD defines expenditure in Active Labour Market Policies (ALMPs) as all expenditure aimed at improving the beneficiaries’ prospect of finding gainful employment. This includes spending in (i) public employment services and administration; (ii) training; (iii) employment incentives; (iv) sheltered and supported employment; (v) direct job creation; and (vi) start-up incentives. Spending in Passive Labour Market Policies (PLMPs), on the other hand, consists of spending in (i) unemployment insurance; (ii) unemployment assistance; and (iii) programs for early retirement.
Low income | With a Contributory Pension Insurance | With PLMPs including Unemployment Insurance | With ALMPs | |
High income | 11 | 11 | 7 | 3 |
Upper middle income | 41 | 39 | 10 | 8 |
Lower middle income | 42 | 33 | 1 | 15 |
Low income | 29 | 23 | 1 | 6 |
TOTAL | 124 | 106 | 32 | 32 |
ISSUES AND CHALLENGES
Informal Economy
As the World Bank’s Report “The Changing Nature of Work” (2019) stands: “The Bismarckian model has served many countries well. However, in a range of developing countries, the model has remained mostly aspirational because of the large size of their informal economies. As a result, many workers lack social protection.” Contributions to reduce the informal part of a country’s economy are, therefore, a priority.
Software supporting Social Assistance and Pension Management can employ several processes to reduce informality. In many countries, government supplies are not allowed for those companies that do not have a regular Social Security situation. Passports may not be issued for non-contributors. The same for access to social housing or for access to mobile payments. Efficacy of these processes must be tested and countries with large informal economies must be prepared to spend some years until seeing better results. From the technological point of view, these improvements mean interconnection, in real-time via web-services, with many other services and processes.
Dynamic Policies
One of the core attributes of Social Policies is that they are always changing. Economic, political, social and technological issues related to Social Insurance are dynamic. The quest for better and better plans, for more efficient processes, or for long-term sustainability is an endless work. Different combinations of active and passive policies, different portfolios of benefits, different rules require flexibility, from country to country and from one moment to another one. At the same time, these are financial flows that go on for several decades. Historic data and rules changes must be kept for eighty or one hundred years. Traceability, consistency, self-explanation, comprehensiveness must be core qualities to support dynamic policies.
Obsolete Technology doesn’t cope with contributory social assistance
Contributory social schemas are, by definition, universal. This means heavy systems, collecting large amounts of data, from millions of different contributors, every month. Regarding this requirement for universality, old generation software for Social Assistance and Pension Management is largely obsolete. It doesn’t cope with current standards for usability, robustness, ubiquity, transparency, and flexibility. It also usually runs on obsolete platforms and equipment, and it uses obsolete programming languages and development methodologies.
Support teams are, consequently, unavailable or highly expensive. The other face of the same obsolescence is the high maintenance costs when changes or expansion are demanded, and the extended time required to improve even a small part of the system.
New software for Social Assistance and Pension Management must be the opposite. It must be future-ready!
Independence and counter-cyclical action
Social security and pensions management need independent and long-term budgets. Following a drop in revenues or an economic crisis, the resilience of the system is crucial to their continuity. Social security funds must be as stable as the most stable sovereign wealth funds. Risk analysis must be a core competence of Social Security managers and management software systems. Social Assistance, by nature, has a counter-cyclical effect on the economy and has a strong impact on long term countries’ development.
Long term sustainability and economic impact
In the 1970s, Peter Drucker published an unconventional book, “The Unseen Revolution”, where he reports that pension funds have become the controlling owners of America’s large companies.
“The shift began in 1952 with the establishment of the first modern pension fund by General Motors. Drucker made some predictions. That a major health care issue would be longevity. That pensions and social security would be central to American economy and society. That the retirement age would have to be extended. That altogether American politics would increasingly be dominated by middle-class issues and the values of elderly people.
While readers of the original edition found these conclusions hard to accept, Drucker’s work has proven to be prescient. The increasing dominance of pension funds represents one of the most startling power shifts in economic history.”
The last fifty years only strengthened these predictions and expanded them to the entire world, not only the United States. Significantly, in several countries, social security annual budget is the biggest budget under a single management board. Finally, historically low-interest rates also have an important impact on the role of pensions funds, as they are forced to invest in innovation, in diversified sectors, in higher-risk financial applications.
A Pensions Management software solution must include financial assets management, risk analysis, and strategic sustainability KPIs.
Transparency Demanding Contributors
Today, Citizenship means transparency and access to data from everywhere. Contributors demand to access the data records about themselves, to follow the application of collected funds, to forecast and simulate their future benefits, to quickly have access to payments, to easily regularize their duties. Employers require guarantees of Social Security effectiveness, covering all the companies. Thus not distorting competition.
QUIDGEST SOLUTION FOR SOCIAL CASE WORK AND PENSION MANAGEMENT
Quidgest solution addresses, by design, all the main challenges of Social Work Case and Pension Management
Supporting big amounts of data, as required by contributory social assistant systems
By design, flexible and always ready to be improved, in order to cope with dynamic social assistance policies
Transparent and accessible by any contributor from any web browser or mobile device
Including Assets Portfolio Management
Based on edge technologies, including analytics and artificial intelligence
The Social Management system developed by Quidgest is a global solution, successfully implemented in Europe, Africa, Asia and America, adaptable to different legal, political, and cultural frameworks
CONFIGURATING QUIDGEST SYSTEM
Quidgest Social Insurance and Pension Management System is a complex integrated solution, that requires a first phase to exactly define its scope.
During this phase, Quidgest and the Institution need to understand and agree about 10 main points.
1. COVERING: WHICH INSURANCES/BENEFITS ARE IN PLACE?
– Maternity leaves
– Long term illness/disability
– Unemployment insurance
– Active Labour Market incentives
– Healthcare co-payments
– Student loans
– Marriage holidays
– Other
2. HOW IS EACH SOCIAL SECURITY INSURANCE/BENEFIT FUNDED?
– Government
– Employers
– Employees
– Others
3. WHICH RULES APPLY TO CONTRIBUTIONS?
– General rules
– Exceptions; First job; Regions; Economic sectors (e.g. Agriculture, Housework); Self-employed; Retired; Private/public companies; Army, War-veterans.
4. CONTRIBUTIONS FLOW
– Financial flow
– Information flow
– Periodicity
– Penalties for delayed payments
– Responsibilities
5. WHICH RULES APPLY TO PAYMENTS?
– Access conditions
– Supporting documents
– Time Limits
– Benefit Limits
– Value Calculation
– Processing dates
– Periodicity
6. PAYMENTS FLOW
– Pensions payment
– Unemployment insurance payment
– Active Labour Market Incentives
– Co-payments for health-care services
– Other payments
– Loan reimbursements
– Non-compliance repayments
7. TRANSPARENCY
– Contributor Citizen/Company Relationship Management (CRM)
– Single Access Point
– Simulation for pensions
– Simulation for unemployment insurance
– Simulation for other subsidies
– Waiting lists
– Self-Service certifications
– Auditing
– Data privacy
8. ORGANIZATION
– Business Process Responsibility
– Centralized/by province/by sector
– Direct/via other entities
– Performance KPIs
– Interfaces with other systems
– Data Quality
– Data Analytics
– Patterns Recognition and Machine Learning
– Reporting
– Support for Decision-Making and Policies
9. SUSTAINABILITY
– Portfolio of Investments
– Financial Assets Management
– Provisioning Rules
– Sustainability KPIs
– Support for Decision-Making and Policies
10. QUALITY AND IMPROVEMENT
– Learning Management
– Compliance with…
– Risk Management
– Strategy Map
– Balanced Scorecard
– Technological Architecture
HOW DIGITAL CAN TRANSFORM SOCIAL CASE WORK AND PENSION MANAGEMENT
The application of Information Management Systems to improve public and private sector management has been proven to transform services provided to citizens and improve the performance and effectiveness of government services. Stressing this, a recent article by the Asian Development Bank highlighted technology as the new frontier to the efficient delivery of public goods and social rights, such as education, health, and social security. In the private sector, the same logic applies. The efficiency of Corporate Social Responsibility practices begin to take form as a major concern for corporations around the world.
As pointed out by the World Bank: “Whichever form of social assistance is selected, technology can be harnessed to improve the delivery of social protection programs. In Mexico, geospatial mapping tools are used to identify the most vulnerable areas in cities, down to the block level. Mobile phone data were leveraged to construct poverty maps in Côte d’Ivoire. In Benin, GPS-based data collection located households lacking addresses in urban settlements. Digital technologies can also deliver assistance in fragile places. In Lebanon, electronic smartcards provide 125,000 Syrian refugee households with food vouchers.”
QUIDGEST´S ROLE
Quidgest is not only a global partner in the promotion of social rights, but also believes that Information Management Systems are crucial tools that governments and corporations alike can use to oversee country and business strategies.
In this sense, Quidgest has developed a modular solution for Social Work Case and Pension Management. This has helped governments and large corporations implement their strategic visions and improve the provision of social and economic services to their citizens and workers. These services include Pension Management, Social Work Case, Healthcare Plans, Social Housing, Active and Passive Labour Market Policies, Social Inclusion, and Assets Management, alongside KPI, Balanced Scorecard and Data Privacy modules.
Quidgest solutions are not code-minded. They are model-minded, which allows for a great degree of powerful customization. Solutions implemented by different clients share the same model, but are highly different, according to the needs of each client organization. Because of this, the solutions developed by Quidgest have a high degree of variety and flexibility. Quidgest also uses a modular approach to its solutions. Customization means that new modules may be created and added to the solution.
COMPETITIVE ADVANTAGES
Quidgest software solutions are developed through Modeling. There is no “No Code”, “Low-Code” or “Accelerate Code”.
Artificial Intelligence is used to translate Models into Code and into Solutions.
Drastically reduced Time to Market: days instead of months/weeks instead of years.
Increased productivity by a factor of 10 regarding low/no/accelerate-code platforms.
Through our Agile development method, our software is built to change every day (continuous improvement by design).
Quidgest is a universal provider. If customers need a new software solution, we are able to supply it.
Our clients have the best of two worlds: Software package (Proved, Robust) + Bespoke (My Solution).
Quidgest solutions use only standard (frequently, open-source) languages, databases and tools.
Working at the Model level, our experts speak the industry language (in this case Social Assistance and Pensions Management language), not the IT jargon.
With Quidgest, Design Thinking / Digital Transformation / DevOps / Lean IT are easy to do.
The automatic generation of code through Genio, Quidgest’s Agile and Artificial Intelligent, self-generating coding platform, increases productivity by a factor of 100, making it an ideal tool for the development of complex, urgent and specific high-quality solutions for its clients.
CASE STUDIES IN SOCIAL MANAGEMENT
A Pensions Management System has been implemented by the Government of East Timor, to manage Veteran Pensions. The application of this system originated from the need for the social inclusion and reintegration into society of War Veterans, which was seen as crucial to the Peace processes of these two countries. “Combatentes” (Warriors / Veterans) Pensions, including survivors (widows and orphans), assumes roughly 7% of the government annual budget.
The project begun in 2006 and is believed to have had a structural impact in the resolution of the East Timor 2006 crisis, firstly recognizing “combatentes” participation in the liberation war through a database and later giving them or their heirs a pension. In this way, Quidgest solution was an important contribution to peace in East Timor. A similar solution was implemented and is in place since 2015, by the Government of El Salvador. It has a similar role in promoting the peace and social inclusion of veterans, after one of the most violent civil wars of the 20th century.
Curiously, one of the first experiences in the history of Social Assistance was, in the United States after civil-war, the Disability and Dependent Pension Act. By 1894, 37% of the US government budget was set aside for pension payments. The act paved the way for future government pension spending. It would take another step in 1904 when an Executive Order was issued by Theodore Roosevelt declaring all veterans over the age of 62 to be eligible for a pension, effectively making old age disability.
The same system has also been implemented by the Government of Jamaica, as an extension of the wider Human Resources Management System (myHR+), a project for the entire Government of Jamaica. The Pension Management System is the scheme for all Jamaican government workers (around 120.000).
The BSC developed by Quidgest has been implemented in Portugal by the Social Security Financial Management Institute (IGFSS), for the strategic management and long-term sustainability of the Social Security budget, which is, at 30 Billion Euro, the largest budget managed by a sole institution in the country.
In health services, healthcare management, and health subsystems have also been implemented by major companies in Portugal, such as EDP SãVida and Altice Cuidados de Saúde. EDP and Altice (ex-Portugal Telecom) are two major Portuguese Energy and Telecommunications companies, and SãVida and ACS are the two healthcare schemes for their workers. The Health Care Plans Management System developed by Quidgest for EDP manages 50.000 beneficiaries (workers and their families) and the network of healthcare providers, of around 15.000.
In another area, also in improved citizen services, non-profit social institutions, such as Fundação Bissaya Barreto and Fundação D. Pedro IV, have implemented the Quidgest solution to plan and deliver social assistance.
Digital Privacy has become a major concern in Europe, and elsewhere. Personal Data Protection systems, also developed by Quidgest, were implemented side by side with the Social Assistance Management System in these non-profit foundations.
Cascais Envolvente is the institution in charge of managing Social Housing in the county. Public houses or social houses are owned and managed by the local government, with the aim of providing affordable housing to county’s citizens.
Quidgest Social Case Solution was adapted to manage, in a sustainable way, the entire process of urbanizing, building, maintaining, renting, selecting residents through transparent criteria, collecting rents, and reinvest results.
IEFP (Institute for Employment and Professional Training) is the responsible for the execution of active labour market policies in Portugal. These policies include training; employment incentives; sheltered and supported employment; direct job creation; first-job incentives. Replacing an Oracle solution, this project has started in September 2019 and will be in operation by the end of 2020.
Discover the most comprehensive functionality solution on the market, with no user limit or annual renewals.
ABOUT QUIDGEST
Quidgest is a global portuguese technology company, pioneer in automatic software modeling and generation. Through the agile platform Genio presents a vast portfolio of solutions, in different areas, aimed at continuous improvement in the management of companies and public institutions of excellence.
CONTACT US
R. Viriato, 7, 1050-233 Lisboa | Portugal
Tel. +351 213 870 563 | quidgest@quidgest.com