Definition of Social Security

Social Security is a citizen protection system. Its purpose is to protect individuals so that there are no social imbalances.

The concept of Social Security is widespread in most countries, especially among those that defend a welfare state (also known as a social state). However, each nation has its own structure, legislation and financing mechanism in relation to this protection system.

The benefits or aid of Social Security can be very diverse: care for people with disability, retirement, widowhood or disability pensions, unemployment payment, coverage for an occupational accident and, ultimately, measures aimed at avoiding the abandonment of citizens. There is general agreement on the need to maintain this type of benefit as a right, since it is a way of avoiding the social exclusion of broad sectors of the population.

The state has a series of services, aids and benefits that are obtained through the collection of taxes. In other words, the active population

and who works has the obligation to support the sectors of the population that cannot do it (elderly, sick, disabled ...). One important circumstance must be taken into account: that the active worker who pays the insurance social worker is, in turn, a potential beneficiary (he can become ill and when he retires he will also have a pension). In this sense, social security has a redistributive character (what is contributed is for the benefit of all).

Risks in Social Security

The main problem that affects most countries with this protection system is its long-term financial sustainability. For it to be possible to continue providing a series of services (especially pensions), it is necessary that there is a adequate ratio between the number of beneficiaries and the number of people who contribute to the maintenance of the system.

There is another aspect that is also presented as problematic: the aging of the population and the low birth rate in many countries. These two factors demographics affect the viability of social security. For a society to remain in Balance its demographic structure must allow generational change (in Spain, the fertility rate is 1, 3 children per woman according to 2012 data and in the same year in Mexico it amounted to 2, 2 children per woman).

Given the different risks that affect the maintenance of Social Security, several solutions are proposed: reduce benefits (for For example, health care is not universal) or incentivize private pension plans to reduce spending on pensions public.

Topics in Social Security