With Law No. 7438 on the Amendment of the Social Security and General Health Insurance Law and Decree No. 375 ("Law No. 7438") published in the Official Gazette dated March 3, 2023, and numbered 32121, various amendments were made for employees who fail to meet the age requirements for retirement ("EYT- Emeklilikte Yaşa Takılanlar in Turkish") although their insurance terms and premium days are complete. The aforementioned Law paves the way for early retirement and entitlement to retirement pensions for such employees. The significant amendments introduced by the Law are detailed below.

THE BENEFICIARIES OF THE EYT LEGISLATION

With Law No. 4447 and Law No. 506, as of September 8, 1999 (the provisional Article 81 entered into force) fulfilling the age requirement became a mandatory criterion along with the number of social security daily premium payments and the total insurance period.

With Law No. 7438, the age criterion previously required is eliminated for employees who started to be employed before the introduction of such age criterion and also regulated that employees who have been enrolled in the Turkish Social Security System (“SSI”)  can retire if they meet the conditions specified under the Law No. 7438 regardless of whether they are subject to 4/1-(a), 4/1-(b) or 4/1-(c) status (employed under a private employer, self-employed or employee of State – civil servants, etc.).

Although the provisions of the aforementioned law cover individuals who started to work within the scope of long-term insurance branches (disability, old age, and death insurance) before September 9, 1999, it is also possible for insured persons who can take the insurance commencement date back to before September 9, 1999, thanks to the legislation that allows the insurance start date to be backdated.

In order to be able to retire in accordance with the above-mentioned regulations for individuals working within the scope of 4/1-(a) status of the Social Security and General Health Insurance Law No. 5510; in addition to the 20-year social security period for females and 25-year social security period for male, it is necessary to pay 5000-5975 social security premium days to be calculated on the basis of the insurance start date. For individuals working under 4/1(b) and 4/1-(c) status (self-employed and State employed); female insured persons must have a 20-year social security period and 7200 days of social security premium payments while male insured persons must have 25 years of social security period and 9000 days of social security premium payments. The charts regarding the number of social security premium payments days for female and male insured persons working within the scope of 4/1-(a) (regular employees under private employers) status are as follows:

 

 

Although the number of social security premium days shall be completed in order to benefit from the EYT Law, it is possible to complete the missing premiums through various borrowing methods. In particular, it is important to purchase premiums for periods where premiums are not paid such as periods of military service, periods after childbirth, and periods spent abroad. In this context, for those who have fulfilled their military service but have not made any social security premium payments to the SSI during their military service, it is possible for these people to borrow as much as the duration of their military service. Besides, it is possible for women with 4/1-(a), 4/1-(b), or 4/1-(c) status to acquire a total of 6 years (2,160 days) for up to three (3) children and 2 years for each child in terms of births after insurance. On the other hand, borrowing can be made by completing the missing premiums for the periods spent abroad after the age of 18 for women and for the periods worked for men.

For this way of borrowing, it is necessary to fill out the borrowing request petition in the SSI and deliver the petition to the institution by hand or mail. In this regard, the minimum amount to be made for the number of days borrowed must be in an amount equivalent to 32% of the gross minimum salary at the time of payment.

RETIREMENT PROCEDURE AND LABOUR RECEIVABLES FOR EMPLOYEES ELIGIBLE TO RETIRE WITH EYT

Under Law No. 7438; if the employee intends to terminate his/her employment contract due to retirement, the employee is required to make a written request to SSI for a document indicating that the employee meets the conditions for termination due to retirement. With this document received from the SSI, a termination notice can be notified to the employer without any notice period.

In case of termination of the employment contract, the employer shall make a notice of termination by using the code "08 - Due to retirement/old age or lump sum payment" and notify the SSI within ten days following the termination.

Since there is no new specific provision regarding labor receivables with the EYT law, the provisions in the legislation will remain applicable in the same way. Accordingly, the employee will be entitled to statutory seniority/severance compensation, accrued and unpaid salaries, premiums, bonuses, commissions, annual leave pay, overtime time pay, and pay arising from work on national and public holidays and weekly holidays. The employer is obliged to pay these receivables.

On the other hand, the first working period of the employee may be liquidated depending on the employer's payment of the relevant progress payments. With the liquidation of the working period, the pre-retirement working period of the employee will be completely eliminated. The most important consequence of the liquidation of the working period is that the employer will be able to redetermine the benefits such as salary, annual leave, etc. for the new period in case the employee wants to restart the work after retirement.

CONTINUATION OF WORK AND SOCIAL SECURITY SUPPORT PREMIUM FOR THOSE WHO ARE ENTITLED TO RETIRE WITH EYT

One of the major regulations stipulated by the Law is that those who retire by benefiting from the EYT Law can continue to work. It is important to note that the employer is not obliged to rehire the retired employee but shall act in accordance with the "principle of non-discrimination". Otherwise, the employer may be exposed to risks of compensation and administrative fines.

Furthermore, it is stated that those who retire within the scope of EYT will be subject to social security support premium if they continue to work regardless of whether they work for the same employer or a different employer and a five (5) point social security premium incentive has been introduced for employees who will continue to work in the same workplace after leaving the job.

In this context, if the employer rehires an employee (in practice immediately the next day following the EYT application is made by the employee to SSI) who has been granted a retirement pension for the first time within thirty (30) days following the date of termination of employment contract, the Treasury will cover five (5) points of the employer's share of the social security support premium from the date the employee starts working. On the other hand, it will not be possible to benefit from the aforementioned premium incentive in case the employee who works subject to social security support premium in the same workplace despite his/her retirement leaves his/her job. It is important to emphasize that the thirty (30) day period is only for the possibility of premium reduction and there is no time restriction for the employer to rehire the retired employee within the scope of EYT.

EFFECTIVE DATE

Law No. 7438 published in the Official Gazette on March 3, 2023, entered into force on the date of publication.