AMMAN –– The Cities and Villages Development Bank (CVDB) will pay the Social Security Corporation (SSC) JD16.5 million owed by municipalities in unpaid subscription fees for their employees.
The announcement was made Wednesday as SSC Director General Nadia Rawabdeh and CVDB Director General Haitham Nahleh signed an agreement to address the debts of financially troubled municipalities.
Rawabdeh said the bailout by the state-owned bank will enable municipalities improve their services to local communities, indicating that the agreement will bring down the overall value of unpaid subscription fees to JD99 million, with the largest share owed by private companies.
Nahleh said unpaid subscription fees are a financial burden on cash strapped municipalities, adding that the bank is working to enable municipalities exit their “bad financial conditions”.
Under the agreement, the CVDB will pay the outstanding fees of each municipality that owes the SSC more than JD20,000 in monthly instalments, while dues less than this amount will be given in one payment.
According to Nahleh, some municipalities owe millions of dinars to the SSC in unpaid subscription fees for their employees.
The SSC considers fees not paid for more than three months as debts and delayed payments are subject to interest, according to an official at the corporation.
Most municipalities across the Kingdom face difficult financial conditions, with official figures estimating that nearly 85 per cent of their budgets go to salaries.
Also on Wednesday, the Cabinet decided to disburse JD6 million to municipalities to support their development role, the Jordan News Agency, Petra, reported.
The assistance, to be distributed according to municipalities' needs in cooperation with the planning and municipal affairs ministries, is provided by the Kuwait Fund for Arab Economic Development under the Gulf Cooperation Council's $5 billion grant.
