Parliament is set to debate a proposal to increase monthly unemployment allowances for Bahraini job-seekers.
The proposed legislation aims to raise the allowance for university graduates from BD200 to BD300 and for non-degree holders from BD150 to BD250 a month.
According to the proposal’s preamble, the adjustment is intended to reflect the rising cost of living, the impact of value added tax and the right to social support as guaranteed by Article 5(c) of the Constitution.
The Cabinet has, however, called for a rethink on the amendments to the 2006 Insurance against Unemployment Law.
The government has expressed reservations, arguing that such financial adjustments can and should be made by executive decisions without amending the core legislation.
“The legislative principle is that amendments should be reserved for cases of real necessity,” the government said. “Financial adjustments to allowances can be executed by ministerial decree, based on actuarial studies and financial reviews, without destabilising the law,” it added.
The government highlighted Article 25 of the current law, which mandates triennial reviews of the benefit ceilings and contribution rates based on consumer price indexes. These reviews are submitted to an actuary, then presented to the Labour Minister, and finally approved by the Cabinet.
Acting Labour Minister and Legal Affairs Minister Yousif Khalaf echoed the government’s stance, emphasising that unemployment insurance is governed by actuarial science, which necessitates rigorous financial assessments before any changes to benefits.
Mr Khalaf
“The proposed law risks overburdening the (Unemployment) Fund without ensuring long-term solvency or identifying alternative sources of financing,” he warned.
He shared updated statistics as requested by Parliament’s services committee.
As of the third quarter of 2024, there were 17,127 registered job-seekers, including 14,947 first-timers or individuals with under 12 months of insurance contributions.
Among these, 9,284 hold a bachelor’s degree or higher, representing 62 per cent of this subgroup – 7,691 are women and 1,593 men.
Overall, 72pc of registered unemployed individuals are females. The duration of unemployment varies depending on specialisation and education level.
Representatives from the Social Insurance Organisation said the proposed rise may discourage active job-seeking, particularly among university graduates. The increase could significantly affect fund expenses, they added.
As of June 2024, the fund’s total assets stood at BD502 million, with BD36m disbursed in 2023 for unemployment benefits.
Annual investment returns are approximately 6pc, though variable depending on market conditions.
Services committee chairwoman Jalila Al Sayed acknowledged the concerns raised but defended Parliament’s rationale.
Ms Al Sayed
“This proposal is not made lightly. We are responding to real economic hardships faced by thousands of Bahraini families. Inflation, housing costs and basic living expenses have outpaced the support levels set nearly a decade ago,” she added. She stressed that the committee was open to dialogue with government and technical bodies.
“If the law is to serve its purpose, it must be updated when ground realities change. Our aim is to ensure dignity not dependency,” said Ms Al Sayed.
mohammed@gdnmedia.bh
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