HIV/AIDS and Regional Social Security Systems

 November 30, 2014 |  Administrator

This disease is one of a number of macro-environmental factors impacting social security systems in the region and is known for it fast spread. People who contract HIV/AIDS may remain infectious for many years without knowing they have the virus, according to a World Bank's document - Intensifying Action against HIV/AIDS. Despite this fact, the Joint United Nations Program on HIV/AIDS stated that "the Caribbean has led the world in reducing the number of new infections by 42% between 2005 and 2011".

HIV/AIDS reduces life expectancy and impacts investments, productivity and education. In addition, it primarily affects persons aged 15 to 49, who are in the most productive period of their lives as workers and parents. Persons affected may suffer repeated and prolonged illnesses, imposing great costs on households and national health systems. This is reflected in the UN Report which states that ‘spending on HIV/AIDS was estimated at US$18.9 billion in 2012; and, projected an estimated US$ 22 - 24 billion would be required annually by 2015’.

There is no known vaccine and no cure for the disease. This is important to note when looking at the impact of HIV/AIDS on social security systems, everywhere, as the social and economic consequences of HIV/AIDS are wide-ranging. However, the prevalence rate per capita is critical as economic growth may further be placed under pressure due to increase expenditures for treatment of HIV/AIDS and related diseases. The AIDS Secretariat reported a total of 1,042 positive tests in Antigua and Barbuda between 1985 and September 2014. Of this total, 41 were recorded in 2014 and 11 deaths were attributed to this disease, thus far. As at September 2014, the Secretariat reported 788 persons living with HIV.

Social security systems were developed to provide a better quality of life for the insured and their dependants. The possible threat of HIV/AIDS on social security systems can be viewed from the following two perspectives: -

  • Financing of Social Security Systems

    Social security systems are financed by contributions from the labour force and from returns on investments. Currently, regional social security systems are operating in an environment where sustained economic growth has not been realized in recent years and globalization points to a not-too-optimistic future. A major, if not the greatest threat, to the financing of regional social security systems is the limited employment opportunities in many of these struggling economies.

    Many infected persons, though not physically incapable of work, may as a consequence of discrimination be forced out of the formal sector into the informal sector. As a result, it is projected that losses in social security remittances will approximate ten (10) times what expected contribution incomes have been. Additionally, the rate of HIV/AIDS infections and its potential to reduce the labour force do not augur well for the future financing of social security systems. Moreover, the obvious consequence of HIV/AIDS to social security systems is that the inflows to these systems will gradually decline due to a reduction in the number of employed persons and the weakening of the income generation systems. It must be noted that a decreased labour market usually poses a threat to the economic development in any country.

  • Increase cost of Benefits

    Given that HIV/AIDS infected persons are more susceptible to opportunistic diseases and infections and are even more likely to be incapacitated by them, it is reasonable to expect that the cost of sickness benefits will continue to increase. Social Security, being founded on the principle of social protection for its insured, has the responsibility to make benefits available to those who so qualify. As such, the probability of the high demand on benefits payment will not only affect the Short-Term Benefit branch but can quickly segued to the Long-Term Benefit branch, as well.

    As an illustration - when a relatively young person repeatedly claims for Sickness Benefit, this will increase the number of claims thereby increasing the number and value of Short-Term Benefit payments. Further, after prolonged illness the individual may apply for Invalidity Benefit thus placing a long-term demand on the social security system. In the event the person dies and leaves dependents, a further demand will be placed on the System through the payment of Survivors’ Benefit as well as Funeral Grants.