Gamal Awad, head of the National Social Insurance Authority, said that the minimum subscription wage for social insurance was EGP 1,200 in 2021.
During a meeting with the American Chamber of Commerce in Cairo, Awad stressed that the authority is sparing no effort in developing the current insurance system in the framework of digital transformation, which will be available from July 2023, facilitating all procedures for all those dealing with the social insurance system.
The new Social Insurance Law No. 148/2019 in Egypt, which came into force in January 2020, has introduced – for the first time – the concept of the Unified Social Insurance Salary (USIS) and cancelled the traditional distinction between basic and variable social insurance salaries.
The USIS is the salary on which social insurance contributions are calculated. According to the Law, the minimum USIS was set at EGP 1,000 and the maximum was set at EGP 7,000 per month in 2020. The Law states that these minimum and maximum shall be subject to an annual increase of 15% throughout 7 years, starting from 1 January 2020, reaching EGO 2,300 (minimum) and EGP 14,500 (maximum) by 2025. These two limits are to be increased by the rate of inflation as of 1 January 2028, taking into account the approximation of the minimum and maximum limits to the nearest hundred pounds.
Awad explained that the state has put in mind all the problems facing the social insurance system and many solutions have been developed for all the problems facing all dealers with the insurance system, whether it is an employer or an insured, pensioners and beneficiaries. Participation rates were reduced by Law 148 from 40% to 28.75% without any impact on the pension values of any worker. Rather, the state directed to establish a special fund for the investments of insurance funds based on scientific methods, in order to achieve the best possible returns, which are positively reflected on the pension values.
He added that what is new in the law is that the irregular worker pays his share only, provided that the state bears the share of the employer.
“If the person pays 9% of the insurance contribution, and his minimum wage is EGP 1,200 per month, he will pay EGP 108 and the state’s public treasury contributes EGP 144, equivalent to the employer’s share, and in return it will be insured against the risks of old age, disability and death, and he is entitled to a pension when one of the conditions of pension entitlement is met with a minimum of EGP 900,” he explained.
In a related context, the Awad indicated that the registration service for registration of form 1, 2, and 6 are available online, along with 15 inquiry services through the Digital Egypt portal.
