The social security system in Turkey went through a major transformation in 2007, resulting in a more efficient and fast functioning system, based on centralizing the control of different social security funds in a single institution.
Within the scope of the program:
The three insurance funds, namely SSK, Emekli Sandigi and Bag-Kur, were merged under a sole body called the Social Security Institution (SSI) in 2007. The three insurance funds together cover around 81% of the population as of 2008. The system started to be fully operational at the beginning of 2008.
Social Security Premium Payments
Social security premiums (as a percentage of employee's gross earnings) are payable by both employers and employees. The below table shows the rates that apply in the case of office employees in the private sector. Rates for employees working in specific sectors (such as mining, oil/gas exploration) may vary depending on the risk category of the work performed.
|
Type of risk |
Employer's share (%) |
Employee's share (%) |
Total (%) |
|
Short - term risks |
1-6.5* |
- |
1-6.5* |
|
Long - term risks |
11 |
9 |
20 |
|
General health insurance |
7.5 |
5 |
12.5 |
|
Contribution to unemployment insurance |
2 |
1 |
3 |
|
Total |
21.5* |
15 |
36.5* |
|
*The rates change according to the risk categories of jobs. Depending on the risk category, the employer's share varies between 1% and 6.5%. |
Foreigners making social security contributions in their home countries do not have to pay the Turkish social security premiums if there is a reciprocal agreement between the home country and Turkey.
Unemployment Insurance Premium Payments
Employees, employers and the state are required to make a compulsory contribution to the Unemployment Insurance Plan at the rates of 1%, 2% and 1%, respectively, of the gross salary of the employee. Like the social security premium payments, unemployment insurance premiums are also to be paid on a monthly basis. Employers are able to deduct such contributions from their taxable income. On the other hand, an employee’s contributions are deductible from the income tax base of the employee.
A foreign individual who remains covered under the compulsory social security system of his/her home country that has a social security agreement in effect with Turkey is not liable for insurance payments to the Turkish social security. The proof of foreign coverage is to be filed with the local social security office. If the employee is not subject to a foreign social security, full contributions would generally be imposed. Unemployment insurance premiums are declared and paid to the Social Security Institution together with social security premium contributions.
Turkey's loan agreement with the International Monetary Fund (IMF) will help the country manage costs and maintain efficiency. In addition, the EU accession period and Turkey’s efforts to comply with the EU regulations will also make positive contributions to the reform program.
- Uniform norm and standards for workers, civil servants and the self-employed
- Gradual increasing of the retirement age to 65
- Decrease in accrual rate to 2%
- The valorization of past earnings by Consumer Price Index (CPI) +30 % of GDP real growth
- Indexation of pensions to CPI
- Universal health insurance
- A new health scheme for the poor
- Introduction of co-payments for secondary and tertiary healthcare