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SOCIAL SECURITY SYSTEM IN TURKEY

SOCIAL SECURITY SYSTEM IN TURKEY. CONTENTS. Institutional Framework Social Security Schemes Statistical Data about the Turkish Social Security System. EU and Foreign Relations Department. INSTITUTIONAL FRAMEWORK. EU and Foreign Relations Department. Institutional Framework.

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SOCIAL SECURITY SYSTEM IN TURKEY

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  1. SOCIAL SECURITY SYSTEMIN TURKEY

  2. CONTENTS • Institutional Framework • Social Security Schemes • Statistical Data about the Turkish Social Security System EU and Foreign Relations Department

  3. INSTITUTIONAL FRAMEWORK EU and Foreign Relations Department

  4. Institutional Framework • Summary of the old structure • Legal basis • Organizational structure EU and Foreign Relations Department

  5. Summary of the Institutional Structure of the Old System (1- Actors)‏ • Social Insurance Institution (SSK) – Workers employed under a service contract • Bağ-Kur –Self-employed • Retirement Fund (Emekli Sandigi) - Civil Servants • Ministry of Finance and Ministry of Health • Public Bodies (healthcare for civil servants)‏ EU and Foreign Relations Department

  6. SSK Bağ-Kur Retirement Fund MoF and MoH Public Bodies Old Age Old Age Old Age Invalidity Invalidity Invalidity Survivorship Survivorship Survivorship Occ. Disease Work Accident The agricultural employed are not covered Maternity Maternity –no cash benefit (through health care system)‏ Maternity (no contribution is made by the insured – health care costs)‏ Maternity for civil servants (no contribution is made by the insured)‏ Health Care Health Care Health Care for pensioners Non-Contributory Payment Health Care for civil servants Summary of the Institutional Structure of the Old System (2)‏ EU and Foreign Relations Department

  7. Legal Basis (1) • The Constitution of the Republic of Turkey Article No 60: Everyone has the right to social security. The state shall take the necessary measures and establish the organization for the provision of social security. • Social Security Institution Law No: 5502 • Social Insurance and Universal Health Insurance Law No: 5510

  8. EU andForeignRelationsDepartment Legal Basis (2) • ContributorySystem: • Social Insurance and Universal Health Insurance Law No:5510 (as of 1st October 2008) • Law on Unemployment Insurance No. 4447. • Obsolete Laws of which articles are still in effect • Social Insurance Law No:506 and Social Insurance Law For Agricultural Employees No. 2925 • Social Insurance Law No: 1479 for the Craftsmen and Artisans and Other Self Employers • Law on Retirement Fund No. 5434 (for civil servants) • NonContributorySystem: • Law on payment of pension to the old aged persons (65 years old and over) who are destitute No. 2022 • Law on Social Assistance and Solidarity Fund No. 3294 • General Directorate for Social Services and Child Protection Law No. 2828 • Law on issuance of Green Cards for the citizens who are incapable to pay for Health Care Services No. 3816

  9. ORGANIZATIONAL CHART OF THE SOCIAL SECURITY INSTITUTION

  10. SOCIAL SECURITY SCHEMES EU and Foreign Relations Department

  11. Social Security Schemes • Old Age, • Invalidity, • Survivorship, • Work Accident and occupational diseases, • Health Care, • Unemployment (Executed by Iskur), • Non-contributory payments EU and Foreign Relations Department

  12. Premium Rates

  13. Scope Employed, self employed, civil servants Conditions Age : 65 (gradually increasing from 58 for woman and 60 for man as of 2036)‏ Contribution period : contributory period of 9000 days for civil servants and self employed; 7200 days for workers Benefits Old age pension, lump sum payment Old Age EU and Foreign Relations Department

  14. Special conditions for entitlement to old age pension (I) • Workerswho had alreadylost 60% of theirworkingcapacitybeforetheystartedworking (whowereinvalid at thedatetheybeganworking) areentitledtoreceiveoldagepensioniftheyhavecompleted - 15 years of insuredworkandpayedinvalidity, oldageandsurvivorsinsurancepremiumsfor 3960 days. - 50 % to 59 % of theirworkingcapacitybeforetheystartedworking (whowereinvalid at thedatetheybeganworking) areentitledtoreceiveoldagepensioniftheyhavecompleted 16 years of insuredworkandpayedinvalidity, oldageandsurvivorsinsurancepremiumsfor 4320 days.     - 40% to 49% of theirworkingcapacitybeforetheystartedworking (whowereinvalid at thedatetheybeganworking) areentitledtoreceiveoldagepensioniftheyhavecompleted 18 yearsof insuredworkandpayedinvalidity, oldageandsurvivorsinsurancepremiumsfor 4680 days.

  15. Special conditions for entitlement to old age pension (II) - Theage limit for mine workers, workingregularlyoralternately in minesregisteredbytheMinistryfor minimum 20 years, is 55 years of age. Mine workersmustcomplete minimum 7200 premiumdays. - Thosewhohavecompleted 55 years of ageandaremedicallydeterminedto be permaturelyagedareentitledtoreceiveoldagepension in casetheyfulfilltheotherrequirements. - Total workingperiods of femaleworkerswhohave a disabledchildareincreasedby 0,25. Also, thisperiod is deductedfromtheage limit.

  16. Department of EU and Foreign Relations Pension allocation formula Pension = Averagemonthlyearning x replacement rate - Pastannualearnings on whichpremiumsarebasedareupdatedusingtheupdatecoeffiecientpertainingtoeachyear, untilthepresentvalue of allpastearnings at the time of thepensionclaim is found. -(Updatedpastearnings + thecurrentearnings ) / total number of premiumdays = averagedailyearning - Averagedailyearnings x 30= Averagemothlyearnings

  17. Department of EU and Foreign Relations Replacement rates • Thereplacement rate is 2% forevery 360 dayscoveredbyoldage, invalidityandsurvivorsinsurance. Periodslessthan 360 daysaretakenintoaccountproportionally. • Theoldage, invalidityorsurvivorspensionallocatedaccordingtothisformulacannot be lessthan 35% of minimum wagepertainingtotheJanuary of thetheyear of deathorpensionclaim. (40%, iftheinsured has a spouseor a childunder his responsibility) • Pensionsareincreasedbythe rate of inflation in thepast 6 months

  18. Scope Employed, self employed, civil servants Conditions minimum 60% loss of working capacity or earning capacity after entry into the insurance system. Contribution period:Minimum 10 years of insured employment and 1800 premimum days. 10 years of insured employment is not sought for those who need constant care by others. For the self employed, no premium debts including UHI premiums * Reduction is made for the disabled persons which are not entitled to Invalidity Pension Invalidity pension Benefits Invalidity EU and Foreign Relations Department

  19. Duty Invalidity (Civil servants only) • Civilservantswhobecomeinvalidduringthecourse of theirduty, or as a result of theiractionswhichaimtoprotectthierinstiution, or on a vehicleprovidedbytheirinstitutionfortravellingtoorfromtheworkplace, ordueto an accidentoccuring at theworkplacearedeemed as invalidduetoduty. • Dutyinvaliditypension is calculated on thebasis of 30 years of service, irrespective of therealperiod, andincreased on thebasis of thedegree of theinvalidity. Degree of invalidityIncrease rate                 1                                                               % 30                  2                                                               % 23                  3                                                               % 15                  4                                                               % 7                  5                                                               % 3                  6                                                               % 2

  20. Replacement rates • Forworkerswithupto 7200 premiumdays; 40% • For self employedwithupto 9000 premimumdays 50% • 10% increase, in casetheinsuredperson in need of constantcarebyothers • Forbothworkersand self employed, 2 pointsincreaseforeveryextra 360 daysover 7200 and 9000 respectively. Extraeriodsshorterthan 360 dayswill be calculatedproportionally. • Replacement rate cannotexceed 90%.

  21. Personal Scope Widow/ers, children and parents of the employed, self employed, civil servants Conditions Contribution period: 1800 days of contribution for workers, civil servants and self employed. Survivors of workers can apply for pension if the deceased had been insured for 5 years and had 900 days of premium payment excepting the service debt periods. Benefits Old age pension, lump sum payment, marriage payment and funeral payment. Survivorship EU and Foreign Relations Department

  22. Personal Scope • Turkish citizens residing in Turkey, • Persons employed in Turkey and transferred to abroad for business and their dependants, • Refugees and stateless persons, • Foreigners residing in Turkey and not covered by insurance according to the Legislation of another country • Contribution:Minimum 30 contributory period of days the scheme in preceding year and not having contribution related dept to the Institution in preceding 60 days • Exemptions From Conditions: • Children under 18 • Delivery of urgent health services • Treatment of communicable diseases • Work Accidents and occupational diseases • Protective health services to prevent addiction to harmful substances (such as smoking etc.) • Maternity • The persons in the need of medical care from another person • In case of disaster, war and lock – out Conditions Health Care‏ EU and Foreign Relations Department

  23. PAYG system Largedeficits - arrears • informality lowactive/passiveratio in spite of favourabledemography - earlypensionage

  24. STATISTICAL DATA FOR TURKISH SOCIAL SECURITY SYSTEM EU and Foreign Relations Department

  25. Statistical Data for Turkish Social Security System • Population Covered by Social Security Schemes • Financial Structure EU and Foreign Relations Department

  26. Population Covered by SSI EU and Foreign Relations Department

  27. Financial Structure 1 € = 2.27 TL EU and Foreign Relations Department

  28. Department of EU andForeignRelations Thanks for your attention For further information www.sgk.gov.tr

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