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Qatar’s new social insurance law to boost employee morale
The impending regulations are intended to reduce the negative impact of early retirement.
Qatar’s General Retirement and Social Insurance Authority has announced a new retirement pension plan and issued a social insurance law regarding pensions and retirement effective January 3, 2023.
Presently, social security only applies to Qatari citizens (and some GCC nationals) employed by ministries, public institutions, agencies, joint stock companies and others as determined by the Council of Ministers at the GRSIA. However, the scope of the law is much wider as it will also apply to employers in the private sector who hire one or more Qatari citizens regularly in return for a wage.
The law states that the private sector will include workers subject to the provisions of Qatar Law No. 14 of 2004, as amended (the Qatar Labour Law) or in companies and institutions that are excluded from the Qatar Labour Law and have their staff regulations.
The new provisions will also apply to employers in the private sector, whether the employer is established through the jurisdiction of the State of Qatar or in one of the relevant non-State jurisdictions (the Qatar Financial Centre).
As per the law, a minimum monthly allowance of 15,000 Qatari rials (approximately $4,120) is granted to eligible employees working in the public sector; however, no minimum amount has been determined for the private sector yet. Pension allowances granted shall be a maximum of approximately $27,465 per month in all cases, except for those who are already effectively enrolled with an amount exceeding $27,465.
Under the new Social Security Law, the minimum age of retirement has been increased from 40 years of age to 50 years.
Reportedly, the scheme will be optional for Qatari citizens, (to be specified by the GRSIA), that are in a social insurance system chosen by them (whether as an employee or self-employed) and which shall be appropriate for their estimated income level (the income bracket system).
The changes are in line with Qatar’s 2030 National Vision to ensure that Qatar becomes an advanced society capable of sustaining its development and providing a high standard of living for its people.
The Social Insurance Law and impending regulations are intended to reduce the negative impact of early retirement. The new law aims to motivate citizens to stay in the labour market for as long as possible.
The application of the new provisions to all public and private employers implies that there will be many employers who will need to acquaint themselves with the pension system and budget and implement changes to their payroll to pay the monthly contributions.