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seven-chapter new social insurance system was issued in the Kingdom of Saudi Arabia

A seven-chapter new social insurance system was issued in the Kingdom of Saudi Arabia.

The new regulations govern the social insurance system, and covering the administrative organization of the General Organization for Social Insurance (GOSI), including its headquarters and branches, board of directors, administration, and finances.

The regulations delineate all aspects of social insurance, including vocational risks and pension entitlements. They stipulate, for example, that vocational risk insurance is applicable to all workers indiscriminate of sex, age, or nationality; and that the rate of subscription is 2 percent of the salary of the subscriber to be paid by the owner of the business. Pension entitlement begins at the age of not less than sixty years.

Subscription, voluntary for Saudi citizens in private business, is set at 18 percent of the salary, of which 9 percent is borne by the employer. Pension insurance, however, excludes civil service, armed forces and police personnel who enjoy special retirement pension systems; foreign personnel of international, political or military organizations; and workers involved in agricultural, marketing, pastoral, or maritime activities, including fishermen.

The new social insurance scheme, recently ratified by the Council of Ministers, will come into force on the first day of the new Hijra year or on March 26, 2001, according to Sulaiman Al-Homaid, governor of the General Organization of Social Insurance.

Al-Homaid highlighted some notable features of the new scheme at a press conference. He said under the new rules, the subscription rate would go up to 18 percent.

The new scheme includes provision for early retirement, pension for families in the event of a breadwinner being imprisoned, and provision for artisans and those who pursue their own trades to seek social insurance coverage.

Compensation before the age of 60 or on disability are two other features of the new system. Moreover, in the new system women will be able to retire at the age of 55, he said.

There are also some new provisions, for example compensation at a rate of his average pay and for the loss of earning due to occupational hazards. The transportation of the dead body of a subscriber to his home inside or outside the Kingdom is another provision under the new scheme.

Al-Humaid said the minimum level of pension in the event of non-occupational disability was increased to 50 percent from 40 percent.

Receiving a pension from the civil service is not an obstacle to receiving the GOSI pension. The rate of the disability pension will be 100 percent of the average monthly pay in the case of total disability. For partial incapacity, the pension rate will be proportionate to the level of disability, he said.

The subscription rate will be increased to 6 percent in the first year and 7.5 percent in the second year and to 9 percent in the third year. The total subscription is fixed at 18 percent, half of which will be contributed by the employer. 

The new statutes of the social insurance will be published in the government gazette on or after Dec. 27. The new system also brings parity between the insurance contribution of the employees of the private sector with that of the civil service and the military.

The minimum pension will be SR1.500 which is same as in the government service.

Source: Ain-Al-Yaqeen


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 December 23, 2000 23:15:03