General Organization of Social Insurance (GOSI) in its efforts to maximize the benefits to the nationals has stressed the importance of investments. It is investing in key sectors and has a local portfolio that includes 63 companies worth SR51.7 billion to provide benefits to the nationals.
It is also modernizing with e-platform that links them to key ministries, enabling the officials to provide quick and seamless services to its beneficiaries.
Abdulaziz Al-Habdan, assistant governor of GOSI for insurance affairs, spoke in an exclusive interview with Badea Abu Al-Naja of Saudi Gazette on benefits, schemes and provisions for nationals under the Social Insurance Scheme.
Saudi Gazette: Recently, some pensioners expressed resentment at reducing their pensions. Would you explain the reasons behind such a reduction?
Al-Habdan: Before the year 1422H, the dependent's grant was added to the beneficiary's monthly pension at the rate of 10 percent for one dependent, 15 percent for two dependents and 20 percent for three or more dependents.
In fact, such a grant was paid as long as the dependents were alive. However, the grant would not be paid if his dependents married or exceeded the specified age.
In whichever case, the pensioner should report any change to the dependents' status to GOSI via the annual declaration in particular, otherwise they would be violating the law.
The recent invalid dependents' cases were discovered following the electronic linkage between GOSI and the National Information Center systems.
Saudi Gazette: Speaking about the Annuities Branch of the Social Insurance Scheme, what is the total amount paid to the beneficiaries? Would you highlight the provisions for receiving the Annuities Branch's benefits?
Al-Habdan: More than 286,194 beneficiaries are receiving monthly pensions worth SR 1.03 billion. The Annuities Branch offers many benefits including retirement pension, early retirement pension, non-occupational disability pension, heirs pension and lump sum compensation.
The provisions of the Annuities Branch is applied to all Saudi workers. The contribution rate for the Annuities Branch is fixed at 18 percent of the contributory wage, of which nine percent each is payable by the employer and the contributor.
To be entitled to a retirement pension, the contributor should be 60 years of age, cease to engage in any activity subject to the law, and should have completed a minimum period of 120 months.
To be entitled to an early retirement pension, the contributor should not be 60 years of age and should have completed a minimum period of 300 months.
The female contributor, who leaves the activity subject to the law, may receive her payable pension so long as she has attained at least 55 years of age and completed at least 120 months.
The contributors who are engaged in arduous or unhealthy occupations for five years may retire at 55 or above; and they will be entitled to the retirement pension if they have completed at least 120 months.
Moreover, the law stated that GOSI pays the retirement pension to the family of the contributor who is sentenced by virtue of a judicial decision or an order issued by the authorized person for a term of imprisonment of not less than three months, or if the contributor remains in prison for that period, provided that he has completed the period qualifying for entitlement to pension (120 months). If the contributed prisoner is released, he would be paid a three-month pension in advance.
The contributor afflicted with a non-occupational disability (who finds it impossible to earn a wage equals to at least one third of his previous wage and his state of disability is such as would be presumed to last for a period equivalent to or exceeding six months) has the right to receive a non-occupational disability pension of no less than 50 percent of the average wage for the last two years or an amount of SR1983 whichever is greater.
However, the following conditions should be met:
The contributor is entitled to a non-occupational disability pension, if the disability has occurred while the contributor is in employment covered under the law, the 12 (consecutive) or 18-month (non-consecutive) period is immediately following the completion of the formalities for his actual registration with GOSI, and the state of disability is established by the Medical Board within 18 months at the most from the date of termination of the contribution period.
An allowance of 50 percent is added to the non-occupational disability pension of the contributor if he is established by the Medical Board to be in need of the assistance of others in the performance of his everyday life activities, provided that such allowance does not exceed the sum of SR3,500.
If the non-occupational disability occurred after leaving the employment covered under the law, the contributor has the right to a pension, provided that he has a contribution period of no less than 120 months (without turning 60), or a contribution period of no less than 60 months with the addition of a credited period.
In the event of the death of a contributor while he is in an employment covered under the law, his family members will be entitled to the heirs' pension, provided that he had a contribution period of not less than three consecutive months or six non-consecutive months. Such pension is computed in the same method as the non-occupational disability pension.
In the event of the death of a contributor after leaving an employment covered under the law, his family members will be awarded the retirement pension, provided that he has completed ten years of actual contribution or has a contribution period of no less than 60 months with the addition of a credited period.
In the case of the death of a contributor who receives a retirement pension or a non-occupational disability pension, the pension will be paid to the members of his family. The family members of the missing contributor are treated the same as the deceased contributor in terms of insurance entitlements.
If pension payment terms are not satisfied, the contributor or his family members are paid a lump sum compensation.
The entitlement to the lump sum compensation at 60 arises if the contributor has left the employment covered under the Law. The lump sum compensation may be paid to the contributor who moves to another employment covered under the Civil or Military Retirement Scheme without having to wait until he attains 60 years of age, provided that his period of contribution under the Social Insurance Scheme is less than one year.
The contributor may claim payment of the lump sum compensation without waiting until he attains 60 years of age in the following cases: if he is engaged in arduous or unhealthy occupations; if he is sentenced by virtue of a judicial decision or an order issued by the authorized person for a term of imprisonment of five years or over; and if the contributor is deprived of his Saudi citizenship.
Saudi Gazette: What is the total amount of benefits paid by the Social Insurance Scheme since its introduction to date? Would you predict the current and future amount of the scheme's expenses?
Al-Habdan: The total benefits paid by the Annuities Branch and Occupational Hazards Branch since their introduction to date amounted to more than SR99 billion. Undoubtedly, the expenses are increasing in line with the system's age.
Currently, the amount of benefits paid by the scheme is significant and almost equals contributions collected from the contributors. After a period of time, the amount of benefits would be higher than the amount of collected contributions as a result of an increase in the number of retirees.
Saudi Gazette: Would you shed light on the benefits of the Occupational Hazards Branch of the Social Insurance Scheme?
Al-Habdan: As many as 9,153 beneficiaries are currently covered under the Occupational Hazards Branch which is mandatory applied to Saudi and non-Saudi nationals. The contribution rate is two percent of the monthly wage paid only by the employer.
The Occupational Hazards Branch offers the following benefits:
• Medical care: GOSI provides a comprehensive medical care in hospitals and medical centers that GOSI contracted with in order to treat those who sustain occupational injuries. The medical care includes diagnoses, treatments, medicine, medical supplies and prosthetics.
Cash compensations include:
• Daily allowances: The allowance is paid in the case of in-patient or sick leave. If the occupational injury led to a temporary disability to the injured and cannot do his work, he is entitled to a daily allowance for each day of his disability by 100 percent of the daily wage of the injured. It is reduced to 75 percent if the injured is under treatment at the expense of GOSI.
The wage and daily allowance may not be combined, nor the wage with the benefit. The allowance is paid as of the day following the day of injury occurrence until the injured has restored his ability to work, recovered, proven permanent disability or died.
• Benefit for total permanent disability: If the injury leads to a total permanent disability of the Saudi contributor, he is entitled to a monthly benefit of 100 percent of the average wage during the last three months of the month when the injury occurred.
If the competent medical board decides that there is a need for the injured contributor to have the Assistant of Others allowance, he also receives it at a rate of 50 percent of the value of benefit provided that it does not exceed more than SR 3,500.
If the Saudi contributor dies as a result of an employment injury or if the receiver of a permanent total or partial disability benefit dies, the family members would be paid a monthly benefit.
• Benefit for permanent partial disability: If the injury leads to a partial disability of the Saudi contributor by 50 percent to 99 percent, the contributor receives a benefit equaling the percentage of his disability from the total disability. The injured will be entitled to the allowance of Assistance of Others if the medical board decides his eligibility.
• Lump sum compensation for permanent partial disability: If the percentage of disability is less than 50 percent, the injured (whether Saudi or non-Saudi) is entitled to a lump sum compensation calculated on the basis of the percentage of such disability multiplied by the total disability, limited by the following:
If the age of the injured contributor did not exceed 40, he receives a lump sum compensation equaling 60 times the monthly benefit (value of total disability benefit × disability percentage × 60 times).
If the age of the contributor is over 40, the compensation is reduced by the number of monthly benefit equaling to the number of years exceeding 40 provided that the compensation does not become less than 36 times its value. The lump sum compensation must not exceed the amount of SR165,000.
• Lump sum compensation paid to a non-Saudi contributor: In the event that the non-Saudi contributor sustains a work injury, he will be compensated with a lump sum instead of a benefit as follows:
If the injury results in a permanent, total disability, the injured is entitled to a lump sum compensation of 84 months of the benefit value, which he was supposed to receive up to a maximum of SR330,000.
The calculation of the compensation takes into account the amount of the assistance of others allowance decided by the competent medical board.
If the person's injury results in partial disability, then the injured is entitled to a lump sum compensation equivalent to 10 years of the value of the assumed benefit up to a maximum of SR165,000.
If the injury results in the death of the contributor, his family members receive a lump sum compensation equivalent to 84 months. It is calculated on the basis of the benefit, which he was supposed to receive up to a maximum of SR 330,000. It is equally distributed among the family members.
Saudi Gazette: What is the total amount of benefits paid by the Occupational Hazards Branch since its introduction to date?
Al-Habdan: The total amount of benefits paid by the Occupational Hazards Branch since its introduction to date exceeds SR6.1 billion.
Saudi Gazette: Would you highlight the e-services provided by GOSI for its clients, particularly the recent electronic linkage of its system with other government bodies?
Al-Habdan: GOSI is always keen on providing its clients with the best services. Therefore, GOSI has recently entered into agreement with the National Information Center of the Ministry of Interior to have their systems linked, in order to retrieve all necessary personal information of the contributors and beneficiaries and to save time and effort.
Under this agreement, the beneficiaries will not need to update the annual declaration. Moreover, GOSI system is linked with the Ministry of Labor to make it possible to register establishments through GOSI website using the establishment's data available in the Ministry's system.
GOSI e-services are a quantum leap in the social insurance field, as they include a set of e-channels such as online services, e-payments, GOSI-Phone, direct link service, and Short Message Service (SMS).
However, GOSI e-services not only approach you through these channels, but also provide you with proactive services. Now, GOSI clients can benefit from all GOSI services wherever they are.
Saudi Gazette: Some economists and insurance experts argue that it is important for the Social Insurance Scheme to have branches other than the current two branches. What is your opinion in this regard?
Al-Habdan: GOSI has almost completed developing the draft Unemployment Scheme, which comes in implementation of the Royal Order No. A/30 dated 20/03/1432H and in cooperation with ILO experts.
This scheme is a branch of the Social Insurance Scheme that will be applied compulsorily to Saudi contributors regardless of the gender provided that they are under the age of 60 and covered under the Annuities Branch.
Moreover, this new scheme will ensure providing the contributor with an income in accordance with the specific provisions.
Saudi Gazette: In mid 1431H, GOSI paid the cost-of-living allowance to pensioners covered under the Social Insurance Scheme. What are the prospects of continuing with this allowance?
Al-Habdan: GOSI has already published in the mass media that by the end of 30/04/1434H, 15 percent of the cost-of-living allowance will be included in all pensions and monthly benefits to which Saudi beneficiaries and their family members are entitled.
Such an inclusion is based on paragraph 3 of the Cabinet's Decision No. 115 dated 13/04/1431H. The decision stated that "A cost-of-living allowance of five percent of pensions and monthly benefits shall be paid to Saudi beneficiaries and their family members.
Such an allowance shall accumulatively be paid for three years effective from 01/05/1431H. Following the end of this period, the cost-of-living allowance of 15 percent shall be subject to the provisions of allowances paid to government retirees."
The cost-of-living allowance is included in all pensions paid by the Annuities Branch to the beneficiaries and their family members, as well as all monthly benefits paid by the Occupational Hazards Branch to contributors who suffer a disability as a result of work injury.
Saudi Gazette: What are the benefits of increasing the minimum wage for private school teachers? Were private schools' owners cooperative with the set wage?
Al-Habdan: Actually, fixing the minimum wage for private school teachers at SR5,000 is in accordance with the Royal Order and it will have positive effects on the benefits provided by the Social Insurance Scheme, taking into account that the paid benefits are calculated on the basis of registered wages.
Nevertheless, some private school owners objected to the provisions of the Social Insurance Law in this regard. Their objection was submitted to GOSI Board of Directors. After considering their objection, the directors decided during its meeting which was presided over by the Minister of Labor on 12/02/1434H to dismiss the objection, saying that Saudi teachers in private schools should be registered with a wage of no less than SR5,000. Saudi Gazette: As the Labor Ministry's Nitaqat Program has succeeded in Saudizing many private sector jobs, does this program affect the growth of contributors to the Social Insurance Scheme?
Al-Habdan: In fact, the number of contributors to the Social Insurance Scheme increased following the introduction of Nitaqat Program.
Saudi Gazette: Due to the importance of Social Insurance Schemes at economic level, what is GOSI's role in the Saudi economy? Would you highlight GOSI's investments?
Al-Habdan: Due to the importance of investment returns in supporting GOSI fund to meet its liabilities, GOSI entered the investment field to become among the founders and shareholders in many service and industrial companies.
GOSI has invested in local banks and petrochemical, cement and telecommunication companies. Currently, GOSI has a local portfolio investing in 63 companies with an amount of SR51.7 billion. Moreover, GOSI invests in several real estate projects in Riyadh, Madinah, Makkah and Jubail and Yanbu Industrial Cities. The value of GOSI real estate portfolio exceeds SR9 billion.
