Expansion of compulsory social insurance coverage

Expansion

of compulsory social insurance coverage

 

A multilevel model of the social protection system has been formed and is successfully functioning in the Republic of Kazakhstan, providing for the distribution of responsibility between the state, the employer and the employee at the basic, mandatory and voluntary levels.

Compulsory social insurance, as a mandatory (additional) level of social protection for working citizens, is implemented through the State Social Insurance Fund (Fund).

The financial resources of the compulsory social insurance system are formed at the expense of social contributions (hereinafter referred to as social contributions) paid to the Fund by employers for employees, as well as individual entrepreneurs and persons engaged in private practice for themselves. At the same time, for employees who have concluded employment contracts, social contributions are not deducted from the employee's salary, as mandatory pension contributions, but are paid at the expense of employers.

The timeliness and completeness of the payment of social contributions ensures that participants in the compulsory social insurance system receive social benefits upon the occurrence of such social risks as disability, loss of breadwinner, loss of work, loss of income due to pregnancy and childbirth, as well as in connection with caring for a child under one and a half years old.

About 6.4 million working citizens participate in the compulsory social insurance system and more than 1.2 million people receive social benefits from the Fund annually. Since 2005, the Fund has made payments totaling about 4.2 trillion tenge, of which 230.1 billion tenge in the East Kazakhstan region.

Taking into account the changes that are taking place in the domestic labor market, in particular with the widespread use of such a new type of employment as "platform employment", the category of persons for whom social contributions must be paid is expanding.

Thus, according to the norms of the Social and Tax Codes of the Republic of Kazakhstan, from September 1 of this year, a tax regime using a special mobile application has been introduced for persons providing services through Internet platforms and mobile applications (such as Yandex, Uber, Glovo, Wolt, etc.), i.e. taxi drivers and couriers involved in platform employment.

The operator of the Internet platform (for example, the food delivery company «Wolt») will withhold 4% of income, of which 1% is individual income tax, 1% is social security, 1% is mandatory pension contributions and 1% is contributions to mandatory social health insurance.

Starting from January 1, 2025, social contributions will be deducted from the income of individuals receiving income under civil contracts concluded with tax agents (GPH), including those working in representative offices of international organizations in the Republic of Kazakhstan, diplomatic missions and consular offices of foreign states accredited in the Republic of Kazakhstan and transferred to the Fund.

The rate of social contributions from January 1, 2025 will be 5%. At the same time, according to tax legislation, taxpayers reduce the calculated amount of social tax by the amount of social contributions paid to the Fund.

The object of calculating social contributions is the employer's expenses paid in the form of income as wages, with the exception of income from which social contributions are not paid.

It should be noted that the monthly object of calculating social contributions from one payer should not exceed 7 times the minimum wage (minimum wage) established for the corresponding financial year by the law on the republican budget, and should not be less than 1 minimum wage.

When social risks occur, the amount of social payments from the Fund is calculated individually and directly depends on the completeness of the social contributions paid to the Fund and the length of service in the compulsory social insurance system.

In this regard, before applying for social benefits, we recommend checking the amounts of social contributions received by the Fund online through the egov e-government portal.kz and mobile applications of second-tier banks or by applying with an identity document to the branch of the State Corporation «Government for Citizens» (PSC) or to a branch of the Fund.

According to the results of 8 months of 2024, about 1.2 million people received payments from the Fund totaling 622.4 billion tenge, of which 33.8 thousand people received social payments from the Fund in the East Kazakhstan region totaling 19.5 billion tenge.

In conclusion, it should be noted that compulsory social insurance provides higher social protection against the onset of social risks for working Kazakhstanis compared with non-working ones. In this regard, the availability of concluded employment contracts for the employment of our fellow citizens and compliance by all parties to the social partnership (employers, employees and the state) with the rights and obligations provided for by current legislation is of particular importance.

 

Branch of JSC «GFSS» in East Kazakhstan region