Strengthening social protection in focus of gov't
By Nigar Abbasova
Labor and Social Protection Minister Salim Muslimov said that the recent presidential order to increase the minimum monthly wage will cover almost 145,000 people.
Muslimov, addressing a press conference on January 24, said that the wages of nearly 71,000 people in the country are currently less than the minimum wage rate. Noting that these are mainly part-time or hourly employees, the minister added that the wages of some 75,000 people is at the level of 105-116 manats ($ 57.3 – $63.3).
“Thus, in tote, the wages of almost 145,000 people will increase by 40.3 million manats ($ 22.01 million), with 71,000 people accounting for an increase of 30.6 million manats ($16.7 million), and an increase of 9.8 million manats ($ 5.35 million) falling to a share of 74,000 people,” he said.
The minister added that allocations on compulsory social insurance will increase by 10 million manats ($ 5.46 million).
President Ilham Aliyev signed an order on January 21 to increase the minimum monthly wage from 105 to 116 manats starting from January 1, 2017.
Under the Azerbaijani legislation, monthly wage of an employee who has worked as per monthly norm of working time and performed functions cannot be less than the minimum wage set up by the state.
Muslimov further said that some 122.5 million manats ($ 66.89 million) are needed for the indexation of the insured part of labor pensions in the country in 2017. He noted that nearly 10.21 million manats ($ 5.57) are needed for these measures on a monthly basis.
The minister went on saying that nearly 127 million manats ($ 69.35 million) (more than needed) were allocated from the budget of the State Social Protection Fund for 2017. He clarified that an excess is due to the fact that the forecasted level of inflation was at the level of 13 percent, while it stood at 12.4 percent in 2016.
The indexation will cover 94 percent of pensioners or 1.24 million people, while the remaining 76,000 people receive individual pensions, i.e. these are the people who receive a premium in addition to their pension.
The insured part of those people’s pensions will also be indexed, but at the same time the volume of premiums paid to them will be reduced, explained the minister. Therefore, the volume of their pensions will remain unchanged, he added.
Muslumov added that all pensioners will receive indexed pensions starting from February 2017, as well as the additional amount for indexation of pensions from January.
“In other words, in line with the indexation, 20.4 million manats will be paid to pensioners in February,” added Muslumov.
Speaking about the labor pension system, the minister said several changes will be made, while relevant bill has already been submitted to the Azerbaijani Parliament and soon it will be discussed in the Committees.
The minister added that the concept of the basic part of labor pensions and a 12-year-service required for assigning a pension are planned to be eliminated as part of the changes.
“We plan to gradually move the brunt of payments on social allocations from employers to employees, in line with the system in effect in European countries. This means that the burden should be divided equally between employees and employers. For now, employers pay some 22 percent of social allocations, while employee pays only 3 percent,” he said.
The minister clarified that the main obstacle is the fact that employers sometimes do not conclude labor agreements or indicate only a part of the paid wages.
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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova
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