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In many countries, informal work remains the dominant reality for a large share of the labour force. Extending social protection to excluded workers is not just a policy aspiration, but a necessity to ensure decent work and promoting social justice.

Yet for millions of workers and micro-entrepreneurs, the cost of regular social insurance contributions remains a key barrier to enrolment. Across this landscape, contribution subsidies are emerging as a practical and promising tool to bridge the affordability gap and promote long-term inclusion.

Contribution subsidies are financial incentives designed to lower the cost of joining social insurance systems. They are especially relevant in low- and middle-income countries (LMICs), where informality is widespread and public resources are often limited.  

To better understand global experiences, the International Labour Organization (ILO) and the International Social Security Association (ISSA) developed a Global Compendium of contribution subsidy mechanisms, sourced from 185 social security organizations in 149 countries. Forthcoming studies based on these results seek to develop the evidence base on contribution subsidy mechanisms, laying out an analytical framework around key design choices, contextual factors, and overall impact of the contribution subsidies to support policy makers and practitioners in designing these tools.  

The Arab Social Protection Compass series hosted a webinar on the topic titled 'Bridging the Coverage and Formalization Gap Through Subsidized Social Security Contributions', where the results of the global study were discussed. The session brought together lessons from selected country experiences, including Jordan’s Estidama++ programme, an example of how well-designed subsidies can lead to lasting results.

“Jordan’s Estidama++ programme stands out as a case where a short-term subsidy led to lasting enrolment in social security system. It is designed to support vulnerable workers and small businesses during the post-COVID recovery, by helping them cover their social security contributions for a set period, aiming to help the workers take an important step toward formal employment and encourage them to remain in the social protection system even after the subsidy ended,” said Mohammed Khrais, SSC Head of Research and Actuarial Studies Administration. 

The global survey yielded a diverse range of programmes, totaling 41 subsidy schemes across 26 countries, ranging from simplified models like Uruguay’s Monotax tax system, to sector-specific or gender-focused schemes in Iran and Malaysia. While some schemes are permanent, others, like Jordan’s Estidama++ and Türkiye’s 6-point employer subsidy, are time-bound, aiming to facilitate the transition toward formalisation and long-term protection.

“Contribution subsidies are increasingly recognized as a tool to support inclusive and rights-based social protection. The forthcoming ILO–ISSA reports and Global Compendium provide a step to document and assess their potential. Ongoing dialogue and knowledge exchange, such as this webinar, support learning among different country experiences, helping to shape context-specific approaches that make social protection systems more accessible” said Fernando Martinez Cure, ILO Project Manager in Jordan and Social Protection Specialist. 

The ILO–ISSA webinar highlighted these insights and more, creating space for dialogue among global experts, policymakers, and practitioners. The event is part of a broader initiative to not only document these schemes but to explore how they can be scaled, adapted and better integrated into national social protection strategies.