In the Turkish Social Insurance Regime, retirement pensions are being calculated as net amount and deposited into the accounts of the retired person directly. No deductions are made under any name such as income tax, support premium, health insurance, basic deduction, age deduction, early payment deduction etc. from various incomes and pensions such as old-age pension, invalidity pension, and permanent incapacity income.
Contrary to the system in many European Union (EU) member countries, which is calculating pensions as gross and paying the monthly payments after deduction of income tax and health premiums, there is no such a practice of deduction from pensions in Turkey. This applies to people who receive a pension both under normal conditions and under partial retirement (pension within the conditions of the extreme old ages).
Retirees in Turkey are not subject to income tax due to their pensions. Likewise, as long as the person and the beneficiaries are in retirement status, they are automatically included within the scope of healthcare that is being financed by the Social Security Institution without the need to pay an extra general health insurance premium.
No deduction will be made from the salaries of retiree employees who continue to be within the working life after their retirement. A Social Security Support Premium (SGDP) is being applied only over the salary that the person will receive from the workplace, without touching his/her pension. SGDP, which has a worker’s share of 7.5%, is essentially a premium calculated and paid by the employer who employs the pensioner, it has no relation with the monthly pension received by the retiree.
The only deductions made from pensions in Turkey are the contribution fees to the healthcare services. A contribution fee is being taken from healthchecks, medicines, visual aids, prosthesis and orthotic apparatuses. Contribution fees required to be received in accordance with the provisions of the SSI Health Implementation Communiqué and being are collected by deduction from the salaries of the individuals. However, even here, there is an advantageous situation for retirees, because the drug and healthcare beneficiary contribution, which is applied as 20% for active workers, is applied at at a discount rate of 10% for retirees.
As to note, this rules are also applied to insurance holders and pensioners who are not Turkish citizens. The Turkish Social Insurance System does not make any difference between a Turkish employee and a foreigner employee regarding being entitled to social insurance benefits and pensions.
In summary, pensions in Turkey are calculated and paid in net, not gross, and no income tax, health premium or similar deductions are made from pensions. The only deductions to be made from pensions are contributions of beneficiaries to the healthcare services in accordance with the Health Implementation Communiqué. This rules are also applied to insurance holders and pensioners who are not Turkish citizens.
