In a new legislative step reflecting the state’s commitment to readjusting the social protection system, the House of Representatives, Egypt’s lower house of parliament, gave final approval to a government-drafted amendment to the 2019 Social Insurance and Pensions Law this week.
The amendment aims to enhance social protection by ensuring the continuity of pensions as a fixed income for priority groups, enabling them to cope with increasing living costs and maintain a decent standard of living, according to Gamal Awad, head of the National Authority for Social Insurance (NASI).
He indicated that the amendment comes at a crucial time, as the state seeks to achieve a balance between guaranteeing the rights of pensioners and the sustainability of the system’s financial resources, thus preserving its ability to meet current and future obligations without placing undue burdens on the state budget.
According to the bill, Article 111 of the existing law will be amended to increase the annual contribution paid by the Treasury to the NASI during the current 2025-2026 fiscal year to LE238.55 billion instead of LE227.08 billion, an increase of about LE11 billion.
The amendment also states that the annual contributions will be increased to start at a rate of 6.4 per cent as of 1 July this year, with a gradual increase of 0.2 per cent annually to reach seven per cent in July 2029, in addition to allocating a fixed amount of LE1 billion annually for a period of five years.
According to Awad, the increase in the value of the Treasury’s contribution is a necessity “because without it the pensions system could face a deficit by 2036, and so the proposed amendment comes at the right time to prevent this, allowing the NASI to meet its obligations to insured individuals and pensioners.”
Awad explained that the authority has an investment fund that is responsible for managing pensions and social insurance funds and that this has a board of trustees. The amounts invested by the fund are estimated at LE732 billion, and they generated a return of LE124 billion in 2025, he said.
Mohamed Suleiman, head of the House’s Budget Committee, said the bill also aims to link pensions to inflation rates in order to preserve pensioners’ purchasing power and enable the NASI to manage its financial resources more efficiently and provide it with the financial tools to face future challenges.
“This will come through focusing primarily on increasing the annual contribution the Treasury is obligated to pay to the NASI, whether in terms of value, percentage, or payment period,” Suleiman said.
The House’s final approval of the bill, however, came amid criticisms from a number of opposition MPs. They said they hoped the government would present a more comprehensive amendment of the 2019 law and ensure that the Treasury’s financial contributions are enough to keep pace with inflation.
MP Mahmoud Sami Al-Imam, spokesman for the leftist Egyptian Socialist Democratic Party, announced his rejection of the bill, contending that “it is an amendment to just one article, leading to a very modest increase in the Treasury’s annual contribution to the authority.”
Al-Imam said that when the bill came to the House, there was optimism that there would be a fundamental change in the law to meet the needs of citizens and help them cope with high inflation rates.
“But the amendment was limited to just one article related to regulating the relationship between the Finance Ministry and the National Authority for Social Insurance,” Al-Imam said.
MP Mohamed Abdel-Alim Dawoud, spokesman of the Wafd Party, also announced his rejection of the bill, describing it as “taking away the rights of pensioners rather than protecting them.”
Dawoud said that around 12 million pensioners have been waiting for a law that would protect their dignity, recognise their contributions to the nation, and help them live a decent life, but the government had disappointed them.
Dawoud said the cost of a pensioner travelling from the Kafr Al-Sheikh governorate to Cairo for a doctor’s visit could reach LE4,000 today, an amount which exceeds the value of an average pension.
“This is not to mention the fact that many pensioners are receiving a monthly amount as low as LE1,500 or LE2,000,” Dawoud said.
He accused the NASI of failing to invest pensioners’ money in an effective way.
Independent MP Diaaeddin Dawoud joined the chorus of MPs voting against the government-drafted bill, considering it not to be commensurate with the problems faced by pensioners in Egypt.
Dawoud accused head of the NASI Gamal Awad of corruption and wasting pensioners’ money. House Speaker Hisham Badawi then intervened, demanding that Dawoud present evidence in support of his accusations.
Independent MP Ahmed Al-Sangidi also announced his rejection of the bill, saying that “more than 12 million Egyptians had hoped they would benefit from this bill with their families, and we as MPs hoped that the bill would live up to the aspirations of the Egyptian people, especially with the increases in the inflation rate coupled with a decline in the value of the pound.”
Al-Sangidi deplored the fact that the increase stipulated in the bill is far below the rate of inflation and does not compensate for the drop in the value of the pound against the dollar.
He expressed the hope that the bill would expand the umbrella of social insurance and pensions to include the vulnerable classes, especially irregular workers, in the light of the current difficult economic challenges and hardships.
Al-Sangidi referred to President Abdel-Fattah Al-Sisi’s decision on 30 April that forced the government to provide an exceptional financial grant of LE1,500 per month to irregular workers for a period of three months, starting from May and continuing until July, to help them meet economic challenges.
“We hoped the bill would be amended to give these workers a regular pension rather than offer them a modest financial amount for a limited period of time,” Al-Sangidi said.
* A version of this article appears in print in the 7 May, 2026 edition of Al-Ahram Weekly.
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