Price of contributions up as minimum wage requirements and pensions are increased by the government
TIRANA, July 5 – Social insurance contributions will increase for all Albanians making voluntary payments, according to the latest government decision.
The move comes after the government decided to increase payments for those currently withdrawing from the current pensions scheme, which in Albania is inter-generational, where those currently working pay for the benefits of those currently retired.
These pensions requirements are tied to minimum wage standards on which such liability was accounted for 16,120 lek, but now it has gone to 16,820 lek, meaning an increase of 700 lek.
Under the changes, the minimum monthly contribution immediately increases for all branches of insurance, going from 4,497 lek per month total to 4,693 lek per month.
These increased obligations for Social Insurance contributions are aimed to bring more money to the fund that the government collects each year and deposits in the pensions fund.
That fund is hardly enough to cover the current pension scheme which the government has to fund through its own budget.
Also, because the government has increased the minimum wage levels, which serve in the calculations for monthly social insurance withholding, the change in the contribution was mandatory.
Under this change, the minimum monthly amount of the contribution of social health insurance and self-employed and family members, the untreated with pay, will be 7 percent of the monthly minimum wage, equal to 1,177 leks per month.
