English Translation
WHAT IS SOCIAL SECURITY ASSISTANCE UNIT?
I. Introduction
Social security assistance unit (SSAU) is frequently heard of and used in social insurance practices by those who are associated with the matter. Abbreviated as SSAU, the unit can shortly be defined as the premium paid by those who begin to work under insurance while they were receiving disablement annuity or retirement pension and their employers and by those who work for their own name and account.
Social security systems are established in order to provide the income they need to people during periods when they lose their energy for work due to reasons such as old age, illness or accidents thus helping them to provide a living without lowering their life standards. However, the assistances provided by the system currently in our country are not sufficient because of reasons such as early retirement, inadequate operating of funds, unemployment due to social and economic circumstances, inflation at high rates, and as a result, most of the people who are granted the right for retirement are obliged to work. This creates a situation which is against the reason for the existence of the pension, and also restricts the work opportunities of those who have not been granted the right for retirement yet and who are obliged to work. Today, 60% of those who have retired from Social Insurance Institution, 35% of those who have retired from Bağ-Kur and 65% of those who have retired from Emekli Sandığı are below the retirement age limits 58-60.
In order to eliminate or restrict this unfavourable situation created by those who continue to work though they receive pension, the social security assistance unit practice has been adopted with the regulation under the Code no. 3279 in 1986. This Code not only brought a general regulation about the situations of those who continue to work while they receive pensions, but also eliminated the inequality rising out of receiving pension and working at the same time between those who receive pension from SSK and those who receive disablement annuity.
II. Regulations brought with the Code no. 3279 and their grounds
As we have mentioned above, the practice has been started with the amendment made in the 63rd article of the Social Security Code in 1986 by the Code no.3279. With this amendment brought with the Code no. 3279, it has been stipulated that
a)The old age pensions of those who begin to work under insurance while receiving old age pension according to the Social Security Code are terminated from the date of the commencement,
b)Premiums will be received from those whose old age pensions have been terminated during the time they commence working again according to the 78th article over their income subject to premium,
c)The insured whose old age pension had been terminated but who quitted work and submitted a written request for being granted the old age pension again, will be paid the amount recalculated starting from the beginning of the month which follows the request for the pension,
d)In the case that those who commence working under insurance while receiving old age pension submit a written request, the old age pension shall be continued to be paid, but the Social Security Assistance Unit will be deducted from their income subject to premium which is determined according to the 78th article, and the ¼ of this premium will be paid by the insured and the ¾ will be paid by the employer,
As is noticed, there are two options for those who commence working while they receive pension from a social security institution. One of the options is letting the retirement pension received to be terminated and paying security premiums as subject to all security branches like all other employees who have not yet been granted the right for retirement, and ensuring that the periods of such payments are taken into account when the retirement pension is calculated again in the future. The other option is paying the SSAU while continuing to receive the retirement pension. Pursuant to the Code no. 3279, the employee is obliged to choose one of these options.
Probably the most significant grounds the Code no.3279 which sets the legal basis for the application of the SSAU is built on, is to prevent or restrict the unregistered employment created as a result of retirement at early ages, by those who retire at around ages 38-40 when they have not lost their energy for work yet, however, obliged to work due to low retirement pensions, and ready to work for a much lower wage and without insurance. (It is estimated that there are 2.165.347 people who are employed unregistered without paying social security assistance unit though they are retired as of December 2006). The legislator wanted to prevent the employers from employing those who receive retirement pension by maintaining the SSAU amount at a high rate and by stipulating that the ¾ of this amount is to be paid by the employer. Providing income for the system can also be considered a second ground along with this important determinant.
III. Those under the scope of the SSAU application
We have to state here that working by paying SSAU does not apply to those who are not in a state available to carry on their duty due to their disability or illnesses that are impossible to cure, and who receive disablement annuity from Social Insurance Institution. In the case that these people commence working again, the disablement annuity is terminated and they pay premiums subject to all security branches. On the other hand, in the case that these insured people quit their work and request to be granted pension again, their disablement is determined with examination. If there is continuation, the disablement annuities will be calculated again by taking the premiums they have paid into account, and will be continued to be granted to them.
Those who commence a work subject to the Social Security Code while receiving disablement annuity or old age pension from social security institutions other than Social Insurance Institution on the other hand, have the right to continue to receive their retirement pensions by paying SSAU.
IV. Social assistance provided in return for SSAU
Those who commence working under insurance while receiving retirement pension from any social security institution, will be protected against occupational accidents or diseases under the scope of the 12th article of the Social Insurance Code in return for the SSAU they pay.
V. Rate of the SSAU
The SSAU rate which was 24% at the beginning has been increased to 30% with the regulation brought with the Code no. 4447 in 1999. The applied rate is still 30%. As we have mentioned above, the 7, 5% of this rate is paid by the employee while the 22,5% percent is paid by the employer.
The high percentage (22,5%) of the SSAU to be paid by the employer has been subject to criticism since it provides protection only against occupational accidents and diseases. This is because the percentage of the premium paid by other employers for these insurance branches vary between 1,5-7%.
Today, a SSAU of 30%, the 7,5% of which will be received from the employee and 22,5% of which will be received from the employer, will be deducted from the wages of those who commence a work subject to the Social Insurance Code while receiving disablement or retirement pension from any social security institution. These rates are applied to the gross salary of the employer provided they do not exceed the lower and upper limits of the revenues subject to premium.
With another regulation brought about the matter on the 63rd article of the Social Insurance Code with the Code no. 4447, it has been stipulated that those who continue their work as freelance lawyers or public notaries while continuing to receive old age pension according to the Social Insurance Code, will have to pay a SSAU of 15% of the wages they receive, including the fringe increase.
The social security assistance unit does not have a return in the system; it is a premium paid as a financial support to the system as its name also suggests. In this respect, SSAU is not considered among the periods of insurance during which premiums are paid and the provisions of The Law on Combining Services Rendered While Being Subject to Social Security Institutions no.2829 are not applied. In other words, it is not possible to take the periods during which SSAU was paid into account in the calculation of the retirement pension. There is also no single payments for these periods.
VI. Registration of those who work as subject to the social security assistance unit
According to the provisions of the 20th article of the Social Insurance Operations Regulation, though it is not obligatory to register those who work as subject to the social security assistance unit, in order for the people who undergo occupational accident or who come down with an occupational illness to utilize the assistances put forth in the 12th article of Social Security Code, they have to be registered by requesting commencement declarations from the date on which they commenced working upon the realization of the occupational disease or going through the occupational accident. Among the people who receive duty disablement pension, those who want to be subject to old age and death insurances have to be registered by requesting commencement declarations from the beginning of the month following the written request date.
VII. Declaration of the social security assistance units to the administration and their payment
Under the provisions of the 20th article of the Social Insurance Operations Regulation which came into effect on 01.05.2004 and which was promulgated in the Official Gazette dated 16.01.2004,the declaration of monthly insurance premiums , insurance premiums payroll of four months and monthly social security assistance unit payroll arranged by the employers for the insured employees they employ, have been transformed into a single document under the name „Monthly Premium and Service Document“. Pursuant to these amendments brought to the regulation, social security assistance units calculated over the wages of the employees, are declared and paid to the administration with the Monthly Premium and Service Document which is arranged in three copies every month. One of these copies is submitted to the Institution, the second is kept by the employer, and the third copy has to be displayed in a place where it can be seen by the insured from the end of the month in which it had to be submitted to the Corporation till the end on the month within which the following document has to be submitted.
However, the Monthly Premium and Service Document is arranged individually for the insured who falls under different groups (insurance branch) within the same work place, and in the determination of whether the establishment is subject to the e-declaration practice, the total number of the registered employees under insurance are taken into account. For example, in an establishment, if the employer has 3 insured employees subject to all insurance branches, 1 insured employee subject to short term insurance branches and 1 insured employee subject to social security assistance unit, since all these insured employees are employed by one employer and the total number of the insured is more than 2, the e-declaration practice will be obligatory. As a result, three individual Monthly Premium and Service Documents will be arranged for the same month and the documents aforementioned will be submitted to the Institution via Internet.
On the other hand, due to the amendment brought to the 79th article of the Social Insurance Code with the Code no. 5073, in the submission of the of the Monthly Premium and Service Document submitted to the Board of Directors of the Institution, taking issues such as the nature of the establishment and the document, number of the insured employees, the advancement status of the provinces and developments in informatics and technology into account, due to the usage of the authority to make the employer obliged, there is an obligation for the establishments in which 2 or more employees under insurance are employed to submit the document mentioned in electronic form (via internet). It has been stipulated under the 140th article of the Social Insurance Code that those who do not fulfill this obligation shall be subject to administrative fine.
VIII. Severance Pay to be Granted for Periods during Which SSAU was Paid
When an employee who commenced a work subject to Social Insurance Code while receiving retirement pension from any social security institution, and who paid SSAU during the period of the work quits his job aforementioned, he has the right to be granted severance pay provided that he has fulfilled the desired conditions.
IX . Amendments Brought to the SSAU Practice with the Code no. 5510
The Social Insurance and General Health Insurance Code no. 5510 which brings radical changes to our social security system also included provisions about the SSAU practices. To be more specific, under 4th paragraph of the 30th article of the Code aforementioned it is stipulated that, “Among the people who commence working again as insured employee subject to this code while receiving old age pension, people who declare that he will continue to be engaged in activities subject to the clause (b) of the first paragraph of the 4th article, old age pensions will be continued to be paid to those who submit written request. Pursuant to the clause (e) of the 81st article, social security assistance unit is deducted over revenues subject to premium determined according to the 80th article.”; and under the 80th article of the Code being referred to in the text of the article aforementioned, it is stipulated that the gross sum total of the payments made during that month will be taken as basis for the wages the worker is entitled to and premiums, bonuses and any kinds of allowances of similar sort, and that the portion of the death, birth and marriage assistances, traveling expenses related to duty, severance pay, termination indemnity or single payment in the nature of severance pay, discovery fee, notice pays and cash compensations, retirement bonus and surcharges on food, children and family whose amounts will be determined by the Ministry annually, amounts of private health insurance premiums and private pension contribution payments which are paid to private health insurance companies and private pension systems and whose monthly sum total do not exceed 30% of minimum wage, the portion of the contributions in kind which are obligatory for performing the duty and other contributions in kind which are to be determined by the Ministry which do not exceed 30% will not be considered in the income subject to premium; while it is stated in the 81st article that “The social security assistance unit rate to be applied to those who are engaged in a work subject to this Code while receiving old age pension, is the sum total of the premium rates specified in clauses (a), (c) and (f). The portions pertaining to the insured and the employer equals to the amounts specified.”
It has been determined that the provisions of the 30th article will apply for those who received old age or retirement pension from existing social security institutions before 01.01.2008 and who will continue to work subject to this Code as of the date aforementioned excluding those specified in the 10th temporary article of the Code and the 30th article of the Code no. 5335 (those assigned by the President, those assigned or nominated under Council of Ministers Resolution or joint decree and assignments for the academic positions of higher education institutions.)
As can be understood from the statements given above, employees who commence working under insurance while receiving retirement pension will either let their retirement pensions to be terminated and pay premiums just like other workers as before, or will continue to receive retirement pensions but pay SSAU. However, as can be noticed, there has been a difference in both the rate of the premium and the distribution of this rate between the employer and the employee. To be more specific, the SSAU rate has been increased to 33,5% from 30%, and the distribution of this rate between the employer and the employee has been redetermined as 14% and 19,5%. When the Code no. 5510 came into effect at the beginning of 2008, for those who work under insurance under the scope of this code and who receive retirement pension at the same time, a SSAU of 33,5%, 14% of which will be paid by the employee and 19,5% of which will be paid by the employer, will have to be paid over their gross wages, provided that the wage falls between the monthly gross amount of the minimum wage and 6,5 times of this amount.
As is observed, when the new Code comes into effect, the premium to be paid by retired persons who are employed as wage-earners will be increased from 7.5% to 14%; the premium to be paid for the same employee by the employer on the other hand will be decreased to 19,5% from 22,5%.