In May, a new decree entered into force raising the ceiling of insured wages subject to contributions at the National Social Security Fund (NSSF) by 55%, alongside adjustments to family and education benefits. The measure was introduced in response to the sharp erosion of real wages and rising living costs driven by prolonged inflation and economic contraction.

LIMS argued that while the adjustment partially addressed immediate purchasing power pressures, it does not resolve the structural imbalance of the social security system. Expanding benefits in a context of weak economic growth and declining real wages increased the financial obligations of the NSSF without a corresponding expansion in its contribution base, thereby deepening its medium- to long-term funding vulnerability.

The core issue is not the level of benefits but the institutional design of the system. The NSSF operated as a compulsory, monopoly provider with limited incentives for efficiency or service improvement. Without structural reform of this model, incremental adjustments risked reinforcing fiscal strain rather than improving protection outcomes.

A structural alternative would involve transforming the system toward a more competitive framework, including allowing voluntary participation and enabling competition with private insurance and mutual fund providers. Such a shift would introduce performance incentives, improved service quality, and reduced institutional inefficiencies. Without reform of the financing and governance model, continued benefit expansion risks weakening the long-term sustainability of Lebanon’s social protection system.

• Will Increases in Social Security Benefits Save the Lebanese Employee or Sink the Fund? May 25, 2026: OTV, Video interview (AR)