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GOSI to enforce new insurance scheme by April
Riyadh,20th March 2001

    A new social insurance scheme covering private and government establishments will come into effect on April 1 and will include an increase in the subscription rate to 18 percent, the General Organization for Social Insurance (GOSI) announced yesterday.

  GOSI Governor Sulaiman ibn Saad Al-Homaid said the new system would be applied from Muharram 1 (March 26) for those businesses which use the Hijri calendar, and from April 1 for those rely on the Gregorian calendar. Other features of the system include a provision for early retirement, pension payment for families of prisoners and making the self-employed liable for social insurance.

  A package of instructions issued by GOSI to establishments joining the insurance system stipulated that the amount subject to deduction is based on the annual salary and house rent with the latter calculated at two month’s payment. The subscription rate should not exceed SR45,000 per month and should not be less than SR400.

  For the first-time subscribers, the age must be less than 60 years under the Hijri calculation (58 years, one month and 20 days under Gregorian) at the time of insuring.

  The 18 percent subscription is divided equally between the employer and the person covered. The 9 percent premium is being implemented in stages starting with 6 percent to be paid upon the introduction of the new system. The rate is then raised to 7.5 percent for another year and should reach the 9 percent target on April 1, 2003.

  The scheme added new categories to those covered by GOSI including people employed in the agricultural, forest and farming sectors in addition to sailors.

  State agencies and corporate ventures with government stakes will require establishments dealing with them to submit a certificate from GOSI stating that they are registered with the organization and have fulfilled all their obligations or clearly indicate they are not subject to GOSI system. This requirement is to be met if these establishments want to apply for government contracts, procurement, and subsidies or want to fulfill any transaction relating to their commercial register.

  The new system brings parity between the insurance contribution of private sector employees with those of the civil service and the military.

  GOSI has over the past 26 years given more than SR24.4 billion in pension and compensation. The organization has provided insurance coverage to 6.6 million subscribers and more than 24,000 establishments since its inception in 1970.

Source: Arab News

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20 March 2001 06:07:27 PM

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