The Social Security Institution’s Role in Turkey

January 29, 2023by Bünyamin Esen0

The Social Security Institution (SSI) of Republic of Turkey is a public institution responsible for providing social security benefits to eligible individuals, such as retirement pensions, disability benefits and survivor benefits. The institution also finances the healthcare expenses for the population who are within the scope of the social insurance system. The SSI operates under the jurisdiction of the Ministry of Labour, and Social Security.

As the Turkish social insurance system is a pay-as-you-go type Bismarckian social insurance system, the SSI is funded through payroll taxes (social insurance premiums, with its technical name) that are being paid by employers and employees, as well as government appropriations. Employers are required to contribute a percentage of their employees’ salaries to the SSI, while employees also contribute a percentage of their salary. In general, social insurance premiums in Turkey are around 32-34 per cent of the wages/earnings subjected to social insurance premium.

The SSI’s budget is a special budget, seperate from the General Budget of the State, and its earnings and appropriations are being governed seperately. The SSI’s budget is approved by the Turkish parliament each year.

As an independent organisation, in accordance with the law, the SSI is being governed by its own board of directors, which consists of representatives of employees, indepent workers, retirees and different public institutitons, including the Turkish Administration of Treasure. Thus, the Turkish government is not directly governing the institution in terms of its financials.

Turkish social insurance system is governed in accordance with the Social Insurance and General Health Insurance Code No. 5510, which is the primer law of the system. According to the code, eligibility for benefits is determined by factors such as employment history, declared earning subjected to premium and other factors determined by the law.

The SSI’s pension system is based on a pay-as-you-go model, which means that current workers’ contributions are used to pay for the benefits of current retirees. The retirement age, in general, for men and women for those start to work first-time today is 65, with early retirement options for certain groups of people according to provisional rules.

The SSI also provides healthcare benefits to eligible individuals through a network of healthcare providers. The General Healthcare Insurance of Turkey, which is a public healthcare insurance much similar to the Affordable Care Act of the USA, is being governed by the Social Security Institution. The coverage includes inpatient and outpatient care, prescription drugs, and preventive services. The SSI also covers the cost of certain medical treatments of chronical diseases, such as cancer treatments and organ transplants in accordance with the Health Transactions Communique.

Although the SSI is not providing the unmeployment benefits–as this allocation is made from the seperate Unemployment Insurance Fund which is being governed by the Turkish Employment Agency–the premiums for the unemployment benefits are being collected through the SSI as deductions from wages. In the Turkish system the unemployment benefits are paid by the Turkish Employment Agency for a limited period of time and are based on the individual’s employment history and income level.

In summary, the Social Security Institution (SSI) in Turkey is a government-run organization that administers various social security programs such as pensions, healthcare financing, unemployment, and disability insurance for the citizens of Turkey. It is funded through a combination of payroll taxes (social insurance premiums) and government appropriations, and provides benefits and services to eligible individuals based on the rules at the Code No. 5510.

Bünyamin Esen

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