Social Security Program in Saudi Arabia
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Social Security Program in Saudi Arabia
Many people rely on Social Security benefits as part of their source of income during the retirement period. Although most working Saud Arabians do not plan to finance their retirement exclusively with Social Security payments, it is a reliable basis of income. Other covered groups include the disabled and survivors (Office of Retirement and Disability Policy, 2016)
Regulatory Framework and Coverage
Saudi Arabia’s government implemented its first social insurance law in 1973, although it was later changed to the current one in 2001. The current social insurance program is known as the social insurance system (Office of Retirement and Disability Policy, 2016). The Social insurance system covers both private and public workers. The scheme also voluntarily covers self-employed people. The following groups are, however, not covered by the current social security program: Fishermen, agricultural workers, foreign workers, and family workers (Social Security Policy)
Qualifications
Men aged 60 years and women aged 55years, both with paid/ credited contributions for not less than 120 years, are entitled to payment. The credited contributions, however, should not be more than 60 months. Also, men aged 55 years working in an unhealthy or strenuous working environment but have contributed for not less than 120 months are qualified for social security cover. All people at any age but have made contributions for a period not less than 300 months qualify for the cover. However, it is worth noting that only those retired from covered employment are qualified (Office of Retirement and Disability Policy, 2016)
Source of Fund
The program gets its fund from various sources. For instance, insured individuals’ pay 9% of their gross income, 18% of the declared income from self- employed people, and 9% of the payroll for both private and public workers of their payroll. The government itself allow a yearly subsidy and top up any operating deficits (Office of Retirement and Disability Policy, 2016)
Benefits of the Program
The minimum monthly pension for the aged, survivors, and disabled is 1,984 riyals, depending on their contributions. The minimum individual pension for survivors is 396.75 riyals per month, while the least pension for a combined survivor is 1984 riyals per month (OECD, 2019).
In conclusion, as the need for social protection is grows, the right to social security in Saudi Arabia is yet to be fulfilled entirely. Social protection remains a core factor in attaining a sustainable economy.
References
OECD (2019). Saudi Arabia. https://www.oecd.org/els/public-pensions/PAG2019-country-profile-Saudi-Arabia.pdf
Office of Retirement and Disability Policy (2016). Social Security Programs Throughout the World: Asia and the Pacific. https://www.ssa.gov/policy/docs/progdesc/ssptw/2016-2017/asia/saudi-arabia.html#:~:text=for Social Insurance.-,Permanent Disability Benefits,paid to non-Saudi workers
Social Security (n. d). Saudi Arabia’s social security system. https://www.justlanded.com/english/Saudi-Arabia/Saudi-Arabia-Guide/Jobs/Social-Security