Phenix Center for Economic & Informatics Studies Phenix Center for Economic & Informatics Studies
The Phenix Center for Economic and Informatics Studies welcomed the amendments announced by the Prime Minister on Tuesday to the draft amended Social Security Law, particularly those related to postponing the implementation of certain provisions and adopting a long-term gradual application beginning in 2030.
In a statement issued today, the Center noted that this gradual approach helps safeguard the acquired rights of broad segments of social security contributors, reduces the number of those adversely affected among current subscribers, mitigates potential negative impacts, and helps avoid a legislative shock that could disrupt the social security system as a core pillar of the broader social protection framework. Such disruption, the Center emphasized, had affected wide segments of society and negatively impacted public confidence in the current and future sustainability of the social security system.
The Center stressed that the fundamental challenge facing the social security system does not lie solely in increasing the statutory retirement age or extending the required contribution period for early retirement. Rather, it lies in the system’s overall ability to strike a balance between financial sustainability and social justice. While increasing the retirement age may be one possible tool to enhance sustainability, it cannot, on its own, constitute a comprehensive reform of the system.
The Center further emphasized that any reform limited to adjusting retirement parameters, without being accompanied by a parallel package of reforms, will remain incomplete. The most significant structural challenge not addressed by the recent amendments is the weakness of coverage. More than half of workers in Jordan remain outside the social security umbrella, particularly self-employed workers, freelancers, platform and gig economy workers, agricultural workers, and segments of those engaged in the informal economy.
Addressing this gap, the Center argued, requires the development of new and flexible insurance instruments, supported by the government, that take into account the irregular or seasonal income patterns of these groups and enable them to join the system under fair and incentivizing conditions. Such an approach would represent a direct government investment in expanding the contributor base and would help correct structural imbalances that accumulated as a result of previous government expansion of early retirement schemes.
The Center affirmed that expanding coverage is not a complementary option, but a prerequisite for successful reform. Raising the retirement age alone may postpone financial pressures, but it does not address the narrow contribution base, does not ensure intergenerational equity, and does not strengthen societal trust in the system.
In addition, reforming the social security system requires a parallel package of labor market policy reforms, particularly with regard to wages. Low wage levels remain a key driver behind private-sector workers’ preference for early retirement, often in search of supplementary income. Therefore, meaningful and gradual wage increases are necessary. Addressing the root causes is no less important than extending the contribution period required for early retirement eligibility.
A comprehensive reform, the Center concluded, should be built on a careful balance between protecting acquired rights, ensuring financial sustainability, expanding coverage, and strengthening good governance and the professional and independent management of social security funds.
While the recent amendments represent a positive step in the right direction, the Center stressed that they must be urgently complemented by an integrated policy package addressing coverage gaps, low wage levels, and other structural weaknesses. Without such measures, the reform will remain limited in impact and unable to address the structural challenges facing the social security system in the medium and long term.
