Azernews.Az

By Sara Israfilbayova

The State Social Protection Fund’s revenues are forecasted to total 3.578 billion manats ($2.104 billion) in 2018 and this figure is 5.3 percent more than the forecasted figure for 2017.

Minister of Labor and Social Protection of Population Salim Muslimov made the remarks at a meeting of the Parliamentary Committee for Labor and Social Policy as part of the discussions on the draft state budget for 2018.

“In the structure of the Fund’s revenues, 63.5 percent or 2.273 billion manats ($1.34 billion) will be accounted for compulsory state social insurance in 2018, which is 7 percent more than the figure forecasted for 2017,” Muslimov stressed.

He said that social payments to the population are forecasted to total 3.495 million manats (97.7 percent of all expenses) in 2018.

The minister noted that payments on labor pensions will increase by 193.2 million manats ($113.63 million), payments due to compulsory social insurance will decrease by 16.3 million manats ($9.59 million), and other expenses will rise by 1.9 million manats ($1.1 million).

Muslumov went on to say that 97.5 percent of all payments to the population or 3.407 billion manats ($2 billion) are planned to be allocated for the payment of labor pensions.

He mentioned that next year, 178 million manats ($104.7 million) will be directed to indexation of the insurance part of the pension following the results of the growth rate of salaries for 2017.

The minister also noted that the average volume of labor pension will amount to 216.5 manats ($127.3 million) in 2018, increasing by 6.9 percent.

“In 2018, 88.1 million manats ($51.8 million) will be allocated for the payment of benefits and social payments. Other expenses are forecasted to total 83.7 million manats ($49.2 million), which is 2.3 percent more than the forecast for 2017. This is mostly due to the software update,” said Muslumov.

President Ilham Aliyev on May 2, 2017 approved amendments to the law "On Labor Pensions".

The amendments provide for the elimination of the concept of the basic part of the labor pension and the 12-year service required for the appointment of a pension, as well as the gradual increase in the retirement age for women and men up to 65 years.

The retirement age will increase every six months until 2021 for men, until 2027 for women. In view of the elimination of the concept of "basic part of the pension", the law introduces the concept of "minimum pension". The size of the minimum pension is 110 manats ($64.7) from January 1, 2017.

Another change is connected with the compulsory social insurance. So, now 90 percent of the deductions paid by employee on compulsory state social insurance will be reflected in his/her account.

Deductions are formed from two sources: the deductions made ​​by the employer in the amount of 22 percent of the salary fund of the enterprise, and the deductions worth 3 percent of the employee's wage. Formerly, only 50 percent of these deductions were reflected in employee’s account.

The law came into force on July 1, 2017 and did not affect persons who retired before that date.

The minister stated that economically active population of Azerbaijan in 2018 is forecasted at the level of 4.84 million people, of which 1.56 million will be employed, and the average salary in the country will be about 550 manats ($323).

“In general, the number of newborns in the country is forecasted at the level of 156,000 next year, with an average life expectancy of 75.9 years. The population of the country aged 15-64 is 70.5 percent of the total population, and the number of residents over 65 - 6.8 percent,” the minister concluded.

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