Act No. 7431 on the Amendment of the Social Insurance and General Health Insurance Law and Some Certain Laws and Statutory Decrees is being published in the Turkish Official Gazette dated January 13, 2023 and thus has entered into force. Some important amendments concerning employers and employees have been made with this act in the Turkish social security system.
With the provision of the Act No. 7431, the invalidity, old-age and survivors’ pensions that Turkish retirees will receive in the calendar year of 2023 have been increased by 30 percent.
With the regulation in the law, the lower limit of pensions for the year 2023 has been increased from 3 thousand 500 TL to 5 thousand 500 TL. Persons with a calculated pension below this line by the Social Security Institution will receive a pension over the lower limit.
With the law, a raise covering the wages of public officers has also been made. Accordingly, the wage increases of the public employees which is determined with the provisions of the 6th Period Collective Agreement of 2022 and 2023 are increased. The increase rate has been decided as 30 percent with the addition of “welfare share” for the wages of public officers for the first half of 2023.
As another important regulation in the law, the monthly support amount given to employers by the Social Security Institution has been increased. Accordingly, it is seen that the minimum wage support provided from 2016 to the end of 2022 in order to support employers to protect and increase employment by reducing labor costs, has been increased especially to ensure that small employers can cope with this burden more easily. In this regard, the minimum wage support is being increased from 100 Turkish Liras per month per employee to 400 Turkish Liras per month per employee for the first half of the year 2023.
With another amendment made in Law No. 5510 within the scope of the Act, a three-months legal period has been granted to employers in order to declare the services of the insured persons, whose services are reported to SSI as insufficient due to faulty transactions in short-time working payments made during the Covid-19 Pandemic. Administrative fines will not be applied to employers who make a notification to the Social Security Institution within this new statutory period.
In addition to this, an additional tax exemption has been put into effect for the transaction regarding the UEFA’s 2023 Champions League Final to be held in Istanbul.
After the enactment of Law No. 7431, the maximum amount of severance pay to be paid to workers by employers, which is exempt from income tax, has also changed. In this context, it is expected that the civil servant salary coefficients and the severance pay ceiling will be announced in a short time with a circular to be issued by the Ministry of Treasury and Finance. Our expectations are in the way that the severance pay cieling to be exempt from income tax will be 19 thousand 982 Liras 82 Pences per month.
