On Sunday, the House of Representatives in principle approved a government-drafted bill that directs cash-based subsidies to citizens who fall below the poverty line and have no access to social insurance. A Takaful and Karama Fund, affiliated with the Social Solidarity Ministry, will be established to provide payments to targeted citizens. The fund’s resources will come from the state budget, private contributions, and investments.
Social Solidarity Minister Maya Morsi told the House on Sunday that the draft law aims to turn the Takaful and Karama initiative from a social protection programme into a legal right for poor citizens.

“We want poor and needy citizens to receive cash subsidies as a right and not as a discretionary donation or grant from the state or other public institutions,” said Morsi.

According to Morsi, the 44-article draft bill reflects the state’s commitment to human rights and to ensuring vulnerable citizens facing unemployment, illness, disability, and old age have access to social protection benefits. She noted, however, that “the draft law can’t be described as unemployment insurance legislation, but rather as economic empowerment.”

A report prepared by the House’s Social Solidarity Committee said the draft is a significant step towards creating a robust social safety net in Egypt and comes as an increasing number of Egyptians fall below the poverty line. Citing World Bank figures saying 32.5 per cent of the population in Egypt lived in extreme poverty at the end of 2022, up from 29.7 per cent in 2020, the report blamed the increase on “the outbreak of the coronavirus pandemic and the war in Ukraine which pushed Egypt into an economic crisis with poor citizens suffering from soaring inflation rates.”
Article 1 of the draft law defines the term “poverty” as the lack of essential and basic human needs like food, drink, housing, dress, and health and educational services.

The report also says the role of the Takaful and Karama Fund will not be confined to distributing cash payments but will include helping poor citizens become engaged “in micro and small-scale productive projects to increase their incomes and improve the quality of their lives.”

It stipulates, however, that for a poor family to access cash-based subsidies, it can have no more than two children and they must be below 26 years of age.

State employees with judicial powers will be appointed by the justice minister to gather information about poor families who do not have access to social insurance. They will have to update information every three years to decide on continued eligibility to cash.

Article 20 obliges beneficiaries to go to nearby social solidarity units before the end of February each year to update information about their social, economic, health, and educational circumstances. Failure to do so could result in the suspension of cash subsidies for a period of two months.

Article 2 states that Egyptians who are unable to support themselves or their families or are unable to work due to disability or old age will have a legal right to cash-based subsidies from the fund. Foreigners who live in Egypt and meet the same conditions are also legally entitled to receive in-kind and cash-based subsidies.

Poor families benefiting from cash-based subsidies will be entitled to ration cards for subsidised food and bread and be exempted from paying government school or university fees.

Morsi said there are around 10 million people with disabilities in Egypt, of whom 1.2 million have obtained Integrated Services Cards that exempt them from paying for public transport and school fees.

Article 15 states that in cases in which a large number of individuals or families apply to receive cash-based subsidies, priority will be given to citizens with severe disabilities or chronic diseases, the elderly, orphans, divorced women who care for children, and families without a breadwinner.

The prime minister, in consultation with the finance minister, will decide the minimum and maximum cash-based subsidies that poor and low-income citizens receive on a monthly basis. In order to receive a monthly subsidy, the children of recipient families must go to state-run medical centres for healthcare and attend school regularly between the ages of six and 18.

* A version of this article appears in print in the 5 December, 2024 edition of Al-Ahram Weekly