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Report of the Minister of LSPP RK at the plenary session of the Mazhylis of Parliament on 12.06.2009 on draft Laws "On compulsory social insurance" and "On amendments to some legislative acts of the RK on issues of compulsory social insurance"

Dear Nurlan Zairullaevich!

Dear deputies!

The draft Law of the Republic of Kazakhstan "On compulsory social insurance" in the new edition was developed to implement the instructions of the First President of RK – Elbasy.

The main goal is to strengthen the relationship between work experience and the amount of payments in the system of compulsory social insurance, as well as to ensure from 2020 the growth of social benefits for disability, loss of breadwinner and loss of work by an average of 30%.

In order to achieve these goals, the draft Law provides for the revision of the parameters for the appointment of social payments for three types of social risks, namely,

First, it is proposed to revise the coefficient of experience of participation in the system for recipients whose experience exceeds 5 years.

This coefficient is used to determine the amount of three types of social benefits.

To date, the maximum value of this coefficient is 1.0 for citizens with experience of participation from 5 years and above. Thus, there is no mechanism to encourage greater participation in the system for participants with 5 or more years of experience.

In this regard, it is proposed for each full year in excess of 5 years of experience of participation in the system, to increase coefficient by 2%.

The number of participants in the system of compulsory social insurance with more than 5 years of experience is 3.4 million people or about 55% of the total number of participants (6.1 million people) in 2018.

Second. In order to increase the level of social protection of persons with disabilities, it is proposed to determine the amount of social benefits for disability based on the actual established medical and social examination of the degree of disability (from 30% to 100%).

Today, the average coefficients of general disability are applied (for example, in case of disability from 30% to 59% , the coefficient 0.3, from 60% to 79% coefficient 0.5, from 80% to 100% coefficient 0.7). According to the new mechanism, when determining the degree of disability 65%, the coefficient will be 0,65, 80% - 0,8, 100% - 1,0 accordingly.

If consider a specific example, for the participant of the system with 7 years of experience and average monthly income of 100 thousand KZT, which set the degree of loss of general ability to work at the level of 65%, the amount of payment, taking into account the new parameters will be 31 080 KZT, with the current parameters

- 22 988 KZT (growth by 35%).

Taking into account that the system of compulsory social insurance is an additional (compulsory) level of social protection, it is necessary to add to this payment the payment of the state social disability benefit. For example, for a disabled person of group 2, the amount is 45 438 KZT in 2019, accordingly, the total amount of payment will be 76 518 KZT.

 

For reference: at the end of 2018, the average annual number of recipients of social benefits for the loss of general ability to work amounted to 83.1 thousand people, the total amount of payments was 12.3 billion KZT.

Third. In order to increase the social security of families without a breadwinner, it is proposed to increase the amount of social benefits by changing the dependency coefficients.

For example:

1) with one dependent it is proposed to increase from 40% to 50%;

2) with two from 50% to 65%;

3) with three from 60% to 80%;

4) with four or more dependents from 80% to 100%.

In general, the growth of each coefficient is about 25% of the previous value.

For example, in case of loss of a breadwinner who has been a member of the system for 7 years and with an average monthly income of 100 thousand KZT, the amount of social benefits per dependent under the new parameters will be 23 907 KZT, which is 30% higher than the amount of payments under the current parameters - 18 390 KZT.

Taking into account that the system of social security of persons who have lost a breadwinner is multi-level, in the amount of the state social benefit for the loss of a breadwinner, the total amount of payment will increase to 49 448 KZT.

 

For reference: at the end of 2018, the average annual number of recipients of social benefits for the loss of a breadwinner amounted to 45 thousand people, the total amount of payments was 8.7 billion KZT.

Fourth. It is proposed to revise the parameters of the appointment of social benefits for the loss of work, in particular:

1) increase the income replacement coefficient from 30% to 40% (in order to comply with ILO recommendations);

2) increase the duration of social payment for loss of work from 4 to 6 months depending on the length of participation in the system (Currently, social payment is carried out for 6 months only for certain reasons of loss of work – staff reduction, liquidation of a legal entity).  

For reference: at the end of 2018, the average annual number of recipients of social benefits for loss of work amounted to 47.6 thousand people, the total amount of payments was 3.6 billion KZT.

At the same time, in order to prevent a gap between the amount of social payments of new and established recipients, it is proposed to carry out a one-time recalculation of the amount of social payments with the use of new parameters for the recipients of social payments for disability and loss of breadwinner.

Dear Nurlan Zairullaevich!   

Dear deputies!

In general, the proposed amendments to the bill will increase the amount of social benefits for three types of social risks: disability, loss of breadwinner and loss of work, for 200 thousand recipients by an average of 30%.

At the same time, it will strengthen the relationship between the amount of social benefits and the length of participation in the social insurance system.

The implementation of the project will not require additional financial costs from the national budget and will not entail negative socio-economic or legal consequences.

In this regard, let me express my gratitude to the deputies for the amendments and constructive work.

Please support!

Thank you for your attention!

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