TIRI MASAWI
Namibian workers will pay more towards social security from next month, but the increase comes at a time when the government itself has acknowledged that the country’s social protection system needs to be improved.
The maximum monthly contribution to the Maternity Leave, Sick Leave and Death Benefit Fund will increase from N$99 to N$112.50 from 1 September 2026 raising questions about whether the additional contribution will translate into better benefits.
SSC officials have admitted that the benefits could be improved but their hands are tied as the Social Security Act 34 of 1994 can only be changed by politicians through Parliament.
The increase means affected workers will now be paying N$1350 a year compared to N$1188 annually they paid before.
Minister of justice and labour relations Fillemon Wise Immanuel during the SSC’s 30-year celebrations last year, called for a rethink of the country’s social security system.
Immanuel questioned whether Namibia should continue with the existing system or develop one that is more inclusive, effective and responsive to the needs of workers.
“To think about whether we want to maintain the status quo or whether we should build an integrated system that is both inclusive, dynamic, effective and transformative,” he said.
He said the sustainability of the SSC would depend on stronger governance, oversight and accountability, as well as financial discipline.
His comments are particularly relevant now as workers are being asked to increase their contributions from N$99 to N$112.50.
While the amount may appear small, the change puts the spotlight on the value of the compulsory social security system and what workers can expect in return for their contributions.
The SSC says the increase forms part of a four-year adjustment of the contribution ceiling.
The ceiling will rise from N$12 500 this year to N$14 000 in March 2027, N$15 000 in March 2028 and N$16 000 in March 2029.
The contribution will continue to be calculated at 0.9% of basic salary until a worker reaches the applicable ceiling.
For workers earning N$12 500 or more from September, the maximum employee contribution will therefore be N$112.50.
Labour researcher Herbert Jauch says the increase itself is modest and will affect only workers earning N$12 500 or more.
“The vast majority of employees will not be affected by these changes as they only affect those earning 12 500 or more per month,” Jauch said.
He said the maximum increase is only N$13.50 a month.
However, he acknowledged that many Namibian households are already financially stretched.
Jauch also pointed to an important feature of the SSC system: not every contributor will receive a direct payment.
“The services/payments of the SSC only come into play in particular circumstances such as maternity leave, extended sick leave or death,” he said.
He added “Many employees do not benefit directly as the fund is set up on a solidarity principle, i.e. everybody contributes and those who need it will receive payment.”
WHAT ARE WORKERS PAYING FOR?
The N$112.50 is not a savings contribution that workers can cash out when they leave employment. It goes into a fund that provides financial support when a worker gives birth, becomes seriously ill, dies, becomes permanently disabled or retires.
For women, the biggest benefit is maternity leave.
A qualifying female worker receives 100% of her basic salary, up to a maximum of N$15 000 a month. The benefit is paid for at least 12 weeks and can be extended to 16 weeks in some cases.
This means a woman earning N$10 000 can receive up to N$10 000 a month while on maternity leave. But a woman earning N$20 000 will receive a maximum of N$15 000. She therefore faces a N$5 000 monthly shortfall unless her employer agrees to cover it.
One of the biggest questions surrounding the increase is what male workers get from the fund.
MEN ALSO BENEFIT
The fund also provides support when a worker is seriously ill.
A worker must first use up the sick leave provided by the Labour Act or their employment contract. They must then be booked off by a medical practitioner for at least 30 consecutive days.
For the first 12 months, the worker can receive up to N$11 250 a month. For a further 12 months, the maximum falls to N$9 750 a month.
There is also a death, disability and retirement benefit.
A qualifying member can receive a once-off payment of N$12 000 upon death, permanent disability or retirement from the age of 60. In the event of death, the payment can go to the member’s qualifying dependents.
This means the N$112.50 is essentially a payment for social protection.
Workers may contribute for years without making a claim. But if a worker becomes injured on duty, seriously ill, has a baby, retires or dies, the fund is there to provide financial support.
That is the principle behind the system: everyone contributes, while those who experience a qualifying event receive the benefit.
The debate, however, is whether these benefits are still enough.
The issue was also raised by Kasper Michael Mudumbi in response to the SSC’s Facebook announcement of the increase.
“What benefit can men get from this contribution?” he asked.
Another commenter, Petrus Heita, called for the SSC to educate workers about the system and explain how stakeholders benefit.
THE CONTRIBUTION IS NOT A PENSION
Part of the confusion may come from the fact that some workers appear to view their SSC deductions as money they should eventually receive back.
But the current MSD contribution does not work like a pension.
The Social Security Act does provide for a National Pension Fund and National Medical Benefit Fund. However, those parts of the Act have not been brought into force.
President Netumbo Nandi-Ndaitwah had given the deadline of 1 April 2026 to establish the two funds but nothing has materialised. Minister Immanuel has now handpicked Ben Nangombe as acting executive officer to accelerate the establishment of those funds within six months.
“We have seen what the SSC has been able to do. The transformation that the organisation has gone through over the past years speaks to the work that you are doing as staff members of the organisation. We should now be able to move forward especially in operationalising the National Pension Fund and National Medical Benefit Fund,” Nangombe said earlier this month.
The MSD Fund is therefore primarily a social protection scheme rather than a retirement savings account.
This explains why a worker may contribute for years without receiving a lump-sum payment simply because they have stopped working.
It also explains the frustration expressed by some contributors.
Esmeralda Claasen, commenting on the SSC’s Facebook post, asked why workers continue to have deductions when they may never use the benefits.
Frans Ndjahera went further, suggesting that long-term contributors should receive some form of payment after contributing for a certain period.
His comments reflect a common misunderstanding – or dissatisfaction – about how social security contributions work.
Workers may see money deducted from their salaries every month and naturally expect some form of direct return.
But social security is designed around protection against risk, rather than individual savings.
Former SSC board chairperson Johannes ǃGawaxab said infrastructure builds nations, businesses create wealth, but institutions such as the SSC preserve dignity. He said they stand beside a young mother welcoming new life, a worker recovering from illness or injuries, and a family mourning the loss of a loved one.
“Through the added responsibility of the National Pension Fund and the National Medical Aid Fund, they help safeguard the financial security and health of current and future generations. These are not merely programs. They are promises that a nation makes to its people,” he said.
THE EMPLOYER ALSO PAYS
Another factor that should be considered when looking at the increase is that workers are not the only ones contributing.
The employer also contributes to the fund.
For an employee earning N$12 500 or more, the employee contribution will be N$112.50 while the employer contributes another N$112.50.
That means N$225 a month will go into the fund for each worker at the maximum contribution level.
The increase therefore also raises the cost of employment for businesses.
For employers with hundreds or thousands of workers, even a small increase per employee can become a significant additional monthly cost.
COMMENTS