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REPUBLIC OF ALBANIA

PEOPLE'S ASSEMBLY

LAW

ON

SOCIAL INSURANCE IN ALBANIA REPUBLIC

 

PEOPLE'S ASSEMBLY
OF
ALBANIA REPUBLIC


D E C I D E D:


PART I

GENERAL PROVISIONS

Article 1
General Social Insurance System

Social Insurance Bill of Albania regulates relations on social insurance field. The general system of social insurance is consisted of compulsory insurance, voluntary, supplementary and special state pensions.


Article 2
Compulsory insurance

Compulsory insurance is non-profit making scheme, protecting by benefits:
 a) employed persons in respect of:
   • temporary incapacity due to sickness,
   • maternity,
   • old-age, disability and loss of breadwinner,
   • employment accidents/occupational diseases,
   • unemployment, and
 b) other economically active persons (employers and self-employed people) in respect of:
   • maternity,
   • old-age, disability and loss of breadwinner.
With paid contributions, a cash payment is guaranteed to compensate loss of earnings at least for an amount that covers a minimum subsistence living standard, to be determined by Council of Ministers.
When appropriate, it also may provide benefits in kind, in place of or in addition to cash benefits, in conformity with the SII regulations.

 

Article 3
Voluntary Social Insurance

The person, being compulsory insured, that for a time and reasonable causes can not be longer compulsory insured, has the right of continuation in insurance, according to the voluntary system.
Voluntary social insurance is also possible for the period of university studies, provided the insured person shall contribute upon that period, before the date he becomes eligible to benefit from.
Voluntary social insurance could also be extended upon persons, not covered under Art. 2.
Voluntary social insurance, under this provision, shall be organised in conformity with conditions set in SII regulations.


Article 4
Supplementary Social Insurance

The Council of Ministers may set up a supplementary insurance scheme for the civil servants' supplementary pensions.
The Council of Ministers may authorize any legal subject to provide supplementary benefits, under conditions to be determined by law.
Social insurance of military personnel, serving in Army Units of Albania Republic, is to be set up by criteria, to be determined under a special Law.
 

Article 5
Special State Pensions

There are eligible for special state pensions all persons who have:
 a) participated in the National Renaissance Movement, in popular movements, in  anti-fascist war, inside or outside of Albania, in protection of our borders and fight for the territorial integrity of Albania, in democratic movement and have special merits;
 b) achieved remarkable results in the field of science,  culture, arts, economy and politics; 
 c) suffered from political persecution under the Communist regime.
Persons enumerated on letters a, b, c of this article are eligible for:
 a) special state pensions, if such persons have not acquired a right to a social insurance pension, or
 b) special state pension supplements to their social insurance pension.

The eligibility conditions, amount and procedure for the award of special state pensions and special state pension supplements shall be determined by the Council of Ministers.
The Council of Ministers has the right to decide commissioning the administration and delivery of the special state pensions to the IS, provided the costs shall be supported from the State Budget.    


PART II
 
PERSONS PROTECTED UNDER SOCIAL INSURANCE

Article 6
Compulsory protection

Social Insurance shall provide compulsory protection to all economically active citizens in Albania in case of  income reduction due to
 • maternity,
 • old-age,
 • disability, and
 • loss of breadwinner.
Social Insurance shall further protect all the employed persons in case of reduction of earnings due to
 • temporary incapacity caused by sickness,
 • employment accidents/professional diseases and
 • unemployment.
 The Council of Ministers may decide on other area of protection and on exceptions for:
 a) seasonal and temporary workers,
 b) self-employed people in agriculture,
 c) unpaid family workers of self-employed people,
 d) apprentices and students  during the period of practice;  these persons are insured by           employers for employment accidents only.
   

Article 7
Foreign workers and Albanian citizens abroad
 
Social Insurance shall also provide protection to:
 a) Albanian citizens working abroad, under the conditions  set down by SII regulations and ratified conventions;
 b) foreign citizens working in Albania for Albanian employers,
 c) foreign citizens working in Albania for non-Albanian employers, provided they do not enjoy other more favourable social insurance protection.


Article 8
Period of protection

Social insurance coverage shall start on the date the protected person has legally started the economic activity and shall end on the date that economic activity legally terminates.
Voluntary social insurance coverage starts on the date determined by an insurance contract and terminates on the date the contract expires.
Period of protection in respect of old-age pension, invalidity pension and survivors pension is the period when a person gets benefits from social insurance due to sickness, maternity, employment accidents/occupational diseases and unemployment. Contributions in their favor shall be transferred from the accounts of the respective branches. Details shall be determined by SII regulations.


PART III
CONTRIBUTIONS

Article 9
Types of contribution to be paid

Employed persons and their employers shall be liable to pay contributions in respect of sickness, maternity and pensions of an amount depending on their total wage (gross). The contribution can not be awarded under a minimum and over a maximum monthly wage.
The employers shall pay contributions in respect of employment accidents & occupational diseases and unemployment.
Economically active persons shall be liable to pay monthly contributions in respect of maternity and pensions at a flat-rate level.
The self-employed persons in agriculture shall be liable to pay contributions in respect of maternity and pensions. The amounts and criteria are to be determined by Council of Ministers.
The state shall pay contributions in respect of citizens, performing their compulsory military service, depending on their economic activity prior to such a service.

Article 10
Contribution rates
 
Contributions to the social insurance fund, to be paid in respect of sickness, maternity and pensions by
 a) the employers shall be 26% of payroll (gross),
 b) the employed person shall be 10% of his total remuneration (gross).
The minimum contribution for employed person, employer and self-employed person is equal. The maximum amount of contribution shall be 5 times the minimum one. The exact minimum amount of contribution shall be decided by Council of Ministers.
Self-employed people in agriculture pay flat-rate contributions at a rate paid by self-employed persons, and not less than 2 times per year, according to a Council of Ministers' Decision.


Article 11
Voluntary Contribution
 
Voluntary contributions shall be payable by insured persons at amounts and in time limits, agreed in voluntary insurance contract. Voluntary contributions shall have the same regime as compulsory contributions.


Article 12

Self-employed and employed persons may, under conditions specified by SII regulations, conclude voluntary social insurance contract to acquire
 a) a higher amount of benefit,
 b) benefits, which are not provided to them under the compulsory insurance.
Private employers may be voluntarily insured for an old-age, disability and survivors pension at an amount not exceeding twice the minimum amount. 


COLLECTION OF CONTRIBUTIONS

Article 13
Liability to pay contributions

1. Contributions shall be paid by insured persons.
2. Contributions of persons employed under an employment contract shall be shared by the insured person and his employer in conformity with the provisions of this Act, and paid by the employer.
3. Persons liable to pay contributions shall be responsible for their proper calculations and payment. In respect of each employee, the employer shall be liable to deduct the wage with contributions and transmit them to SII.
Social insurance inspectors have the right to audit paid contributions amounts, wage fund, and pay-rolls in enterprises, companies, institutions and other entities.
4. Any difference in the amount of contributions shall be recovered within three years of the payment, together with a penalty.
     

Article 14
Distribution of contributions

1. Contributions paid in respect of employed persons shall be distributed among three branches, which administer the social insurance fund:
 a) sickness insurance branch, 1.5% of payroll,
 b) maternity insurance branch, 2.8% of payroll,
 c) pensions insurance branch, 31.7% of payroll.
2. The employer shall moreover pay to the:
 a) employment accidents/occupational diseases insurance branch O.5% of payroll,
 b) unemployment insurance branch 6.O % of the payroll.
3. SII shall differentiate the contribution rate concerning accidents insurance, in conformity with level of life danger, several branches of economy represent.


Article 15
Payment of Contributions

 Contributions  to the social insurance fund shall be payable monthly, not later  than by the end  of the following month.
The Council of Ministers shall determine the way and procedure of contribution payment.
The act stipulating that contributions payment is compulsory is considered an executive title.


Article 16
Penalties

1. Contributions paid beyond terms set under this Act, shall be increased by a penalty and a fine.
2. Penalties and fines shall also be imposed for delayed registration of insured person and for illegal reduction of contributions.
3. Fine imposed for delayed registration of insured people, delayed payment of contributions and reduction of contributions by employer or self employed person (point 1 and 2 under this article), shall equal to 6000 to 60 000 leks. Penalties shall be determined by social insurance inspectors and executed in conformity with the Act No. 7696, date 07.04.1993 “On administrative violations (modified)”.
4. Fine imposed according to point 1 and 2 of this article shall be equal to 0.5% per day of defaulted amount of contributions, starting from the day the payment was due.


Article 17
Appeals

Any person shall have the right of appeals to a court against the decisions of SII Agencies.


Article 18
Priority of Contributions

The payment of contributions shall enjoy priority in comparison with taxes and debts.
In case of delayed contribution payment, social insurance inspectors shall issue an order of compulsion, which is an executive title.


PART IV

Article 19
Cash benefits

Cash benefits to beneficiaries shall be payable under the following branches:
 a) sickness insurance branch,
 b) maternity insurance branch,
 c) pensions insurance branch,
 d) employment accidents/occupational diseases insurance branch,
 e) unemployment insurance branch.


CHAPTER I

SICKNESS BENEFIT

Article 20
 
Under the sickness insurance branch the following benefits shall be awarded:

 a) sickness benefit,
 b) sickness allowance, as compensation of job place changing.


Article 21
Conditions of Eligibility

1. The insured person shall be awarded a sickness benefit, provided he is medically certified as being temporarily incapable to work and such incapacity is not due to an employment accident/occupational disease.
2. The insured person shall also be entitled to a sickness benefit within 30 days following his termination of compulsory insurance. This shall not apply, if the employee was dismissed for  criminal act, according to a Court Decision.


Article 22
Benefit amount

1. The rate of sickness benefit  shall be 70% of the daily average of the annual assessment basis of the last calendar year, if the insured person has up to 10 insurance years, and 80%, if insured person has got more than 10 years of insurance.
2. The sickness benefits are 50% of daily average of the annual assessment basis of the last calendar year in any period the beneficiary is hospitalised, provided he does not support any dependent.


Article 23
Benefit Period

1. The benefit period under temporary incapacity shall start on the 15th day of medical certification of such incapacity and shall last for not more than 6 months from the beginning of the payment.
2. The benefit period may be exceptionally prolonged up to another 3 months, provided a MEC (Medical Experts Committee) certifies that the insured person concerned shall recover in that period and be not eligible to a disability pension.
3. Temporary Incapacity benefit period shall be 3 months for beneficiaries who are entitled to a partial disability pension.
4. Benefit period for seasonal and temporary workers, who have been employed at  least 3 months in the last 12 months, shall be up to 75 days.


Article 24
Sickness allowance awarded to compensate
job place changing or reduction of working hours
.

1. The insured person, that due to health reasons and by decision of a Competent Medical Commission, changes employment, shall be eligible to income compensation by social insurance.
2. The amount of compensation shall equal to the difference between the previous and present wages. This compensation should not exceed 50% of daily average of the assessment basis of last calendar year.
3. The benefit period should not exceed 3 months within one year from the date the disease, due to which the employment was changed, began.


Article 25
Employer's Liability

Benefits in case of sickness, for periods up to the first 14 days, or nursing a dependent child, shall be the liability of the employer, to be determined under the
Labour Code and employment contract, as well, or according to the agreement with the workers representatives, but not less than the payments defined in this Act.


CHAPTER II

MATERNITY BENEFITS

Article 26

Under the maternity insurance branch the following benefits shall be awarded :
 a) maternity benefits,
 b) maternity allowance, due to employment change.
 c) birth grant.


Article 27
Maternity Benefit
 
1. The maternity benefit shall be payable to a woman with regard to pregnancy and  childbirth, provided she has acquired 12 months of social insurance.
2. The benefit period shall be 365 calendar days, including a minimum of 35 days prior to and 42 days after child birth. For woman that during the pregnancy would have more than one child, the benefit period shall be 390 calendar days, including a minimum of 60 days prior to and 42 days after child birth.
3. The rate of maternity benefit for insured woman shall be:
 • 80% of daily average of the annual assessment basis of last calendar year - for the period prior to birth and for 150 calendar days, - after the birth;
 • 50% of daily average of the annual assessment basis of last calendar year for the rest of period.
4. The amount of maternity benefit for economically active women shall equal to the base flat-rate old-age pension.
5. When a child of up to one year of age is adopted, the adoptive mother, having not less than 12 months of insurance, shall have a maternity benefit beginning from the day the adoption occurred, but not prior the 42nd day of childbirth, subject to a  maximum of 330 days from baby delivery. The minimum period of benefit, for the  adoptive mother, shall be 28 days.
6.When a child is adopted during the maternity leave, the real mother shall have a benefit period until the day the adoption occurred, but not less than 42 days after childbirth.

Article 28
Maternity allowance benefit

 1.The maternity allowance benefit shall be awarded to reimburse loss of wage of an insured person who has to change employment for reasons of pregnancy, in  conformity with a decision of MEC, provided one year contributions have been paid,  prior to being eligible to benefit.
2.The amount of such a benefit shall equal to the difference between the previous and at present wages, subject to a maximum of 50% of daily average of annual assessment basis of last calendar year.


Article 29
Birth grant

1. A birth grant shall be awarded to an insured person who is the mother or father of a new born child, provided one of them has contributed for one year prior to the childbirth. The grant shall be payable only once and the mother shall have priority in eligibility, if insured.
2. Birth grant shall be a lump sum equal to 50% of the minimum monthly wage.


CHAPTER III

PENSIONS

Article 30

Under the pension insurance branch the following benefits shall be awarded:
 a) old-age pension,
 b) partial old-age pension,
 c) disability pension,
 d) partial disability pension,
 e) allowance for helplessness,
 f) supplement benefits for dependent child,
 g) survivors pensions,
 h) death grant.

 

OLD-AGE PENSIONS

Article 31
Conditions for eligibility

1. The insured persons shall be eligible to a full basic pension at the age 60, men, or 55, women, provided they have:
 a) completed 35 years of insurance, and
 b) retired from economic activity.
2. Mothers with 6 and more children, of more than 8 years old, shall be eligible to retire at age 50, provided they have achieved 30 years of insurance.


Article 32
Pension amount

1. The monthly old-age pension shall be composed of a basic amount and an increment.
2. The basic  pension  amount, awarded to all insured persons, shall provide at least for a minimum living standard, annually indexed with regard to price index development of selected commodities, as determined by SII regulations.
3.The increment, awarded to employed persons, shall be 1% per year of insurance,  times average assessment basis the insured persons achieved through contributions. Council of Ministers shall yearly index the individual assessment basis relating to development of the average paid contributions in that year.
4. The total amount of pension shall be subject to a maximum of twice the basic amount or 75% of net average wages of three successive years in the 10 last years of employment; whichever is lower.


Article 33
Pension increment for Deferred Retirement

If the insured person, being eligible to a full old-age pension, defers retirement to a later date and continues in employment paying contributions, he shall earn an increment of 4% of full pension in respect of each year the retirement is deferred.
In that case the pension should not exceed 80% of three years average individual net wage, taken in last 10 years prior to retirement.


Article 34
Partial old-age pension

1. An insured person, who has acquired less than 35, but more than 20 years of insurance, shall be awarded a partial pension when reaching 60.
2. The partial pension amount shall be calculated as a portion of the full pension. This pension shall be calculated by dividing the multiplication of full old-age pension amount and achieved years of insurance, by 35.


DISABILITY PENSION

Article 35
Conditions for eligibility

1. The person, getting disabled being insured, shall receive a disability pension, provided he has acquired minimum insurance period and, for reasons other than employment accidents/occupational diseases. He gets this pension if he becomes disabled to
 a) any economic activity, or
 b) has suffered severe mutilations and physical defaults (including the blind).
Disability is defined by a Medical Commission for determining the work capacity (MEC).  The MEC decision shall describe causes of disability, starting time and grade of ability lost. The person may appeal to the Supreme MEC attached to Social Insurance Institute, if against the decision of the Regional MEC. The decision taken by the former is irrevocable. Rules relating to organising and functioning of MEC shall be included in a regulation of SII and Ministry of Health and Environmental Protection.    
2. The minimum insurance period to qualify for a disability pension shall be equal to half the period that the disability age of the insured person exceeds 20 years of age.
3. On reaching pensionable age the disability pensioner shall have the right to opt for an old-age pension, if that shall be more favourable for him.


Article 36
Pension amount

1. The full amount of disability pension shall be composed of a basic pension and a  pension increment, and calculated in the same manner as the old-age pension.
2. The basic amount shall provide at least for a minimum living standard, indexed with regard to price index development, together with the indexing of old-age pensions.
3. The increment, awarded to employed persons, shall be 1% per year of insurance times average assessment basis the insured persons achieved through contributions. On the proposal of SII the Council of Ministers may index each year the individual assessment basis, with regard to the development of average paid contributions in that year.
4. Total pension amount shall be subject to maximum of twice the basic pension or 80% of last year’s net average wage, whichever is lower.


Article 37
Partial disability pension

1. The insured person shall be entitled to a partial disability pension, provided he has acquired the minimum insurance period according Art. 34 and, for reasons other than employment injuries, becomes disabled to perform last employment, but may work under special working conditions. The scale of disability and the special work conditions are to be determined by MEC.
2. The partial disability pension shall be 50% of full disability pension. It shall be calculated in the same manner as a full disability pension.


Article 38
Allowance for Helplessness

When the beneficiary of an invalidity pension becomes physically or mentally helpless and needs constant care of another person, he shall be awarded an allowance for helplessness of 15% of his assessment basis. The need of constant care is to be determined by the Medical Commission, responsible on work ability definition.


Article 39
The supplements for dependent children

A disabled insured person, awarded a disability pension according Art. 35, with dependent children up to 15 years of age, shall receive a family supplement payable at 5% of basic pension, in respect of each dependent child, subject to a maximum of 20%.


SURVIVORS PENSIONS

Article 40
Conditions for Eligibility

1. The persons, be dependent upon the insured person who dies, shall be eligible to a survivors’ pension, provided the deceased person was or would have been entitled to an old-age or disability pension.
2. The eligible survivors shall include
 a) the widow, provided she is
    • caring for a dependent child of deceased person, up to 8 years old;
   • disabled, or
   • 50 years of age.
 b) the widower, provided he is
   • caring for a dependent child of deceased person, up to 8 years old;
   • disabled, or
   • 60 years of age.
 c) the orphan, provided he was dependent upon the deceased and is
 under 18 years of age, or 25, if studying, or disabled, prior to the
 above mentioned ages,
 d) the parents and grand parents, provided they
   •. shared the same household with the deceased for at least one year before the death,
   •. have not other persons liable to take care on them, and
   •. have reached age 65, or are disabled.
 d) grandchildren, provided they were dependent upon the deceased and shared the household with him. In such case they shall be treated as orphans.
3. The widow and widower shall lose their right to a survivor’s pension on marriage.


Article 41
Pension amount

1. The survivors pension shall be a portion of the pension the deceased person had or would have had. It shall be
 a) 50% for widow or widower and,
 b) 25% for orphan and other eligible dependants.
Where nobody is entitled to the pension foreseen under letter “a” of this article, then orphan’s pension amount shall equal to 50% of the pension the deceased was or would have been entitled to.
2. The orphan shall have the right to survivor’s pension even if the surviving  parent  is employed or otherwise economically active, or receives a pension as of his own right. In such a case the total pension awarded to orphans shall not exceed 50% of the pension the deceased was or would have been entitled to.
3. The orphan who lost both parents shall receive an orphan’s pension in respect of each of them.


DEATH GRANT

Article 42

1. A death grant shall be awarded
 a) to the insured person or pensioner in case of death of a dependent member of his family
 b) to the survivor of the deceased insured person, who has paid the funeral expenses.
2. The death grant shall be equal to one month’s basic old-age pension.


CHAPTER IV

EMPLOYMENT ACCIDENTS/OCCUPATIONAL DISEASES
INSURANCE BENEFITS

Article 43

1. The insured persons who suffered an employment accident/occupational disease shall, regardless the work stage be entitled to benefit:
 a) additional medical care and rehabilitation,
 b) benefits in case of incapacity,
 c) compensation for reasonable damages,
 d) benefits in case of death.

 


Article 44
Employment accidents and occupational diseases

An accident at work, or in connection with work, shall be defined by SII regulations.
Occupational diseases are to be defined by Ministry of Health.


Article 45
Additional medical care and rehabilitation

An insured person, who suffers an employment accident/occupational disease, shall receive additional compensation or any training-retraining, necessary to recover lost abilities, as defined by SII regulations.


Article 46
Benefits in case of incapacity

If due to an employment accident/occupational disease the insured person loses his capacity to work, he shall be eligible to:
 a) benefit in respect of temporary incapacity,
 b) benefit in respect of permanent disability,
 c) benefit in respect of partial permanent disability and
 d) benefit in respect of minor permanent incapacity.


Article 47
Benefit in respect of temporary incapacity

The benefit in respect of temporary incapacity, due to an employment accident/occupational disease, certified by a competent medical expert committee, shall equal to 100 % of average daily wage for last three years, payable for a benefit period of up to 12 months.


Article 48
Benefit in respect of permanent disability

The benefit in respect of permanent working disability, incurring at least 67 % of working capacity lost, - as it’s certified by a special medical committee, - shall equal to 80% of average wage for last three years, subject to a minimum living standard level, to be established by Council of Ministers.


Article 49
Benefit in respect of partial permanent disability

The benefit in respect of partial permanent disability to work, incurring at least 33% of loss of working capacity - certified by a special medical committee - shall equal to a portion of the 80% of average wage of last three years, depending upon the degree of the working capacity lost, but not less than 50%, and to be determined by SII Regulations.

Article 50
The benefit in respect of minor permanent incapacity

The benefit in respect of minor permanent incapacity of less than 33%, but more than 10% - certified by a special medical commission - shall be a lump sum paid at once, to be determined in conformity with SII Regulations.


Article 51
Compensations for reasonable damages

Material damages occurred to the insured person in connection with employment accident/occupational disease, shall be compensated in full, according to SII Regulations.


Article 52
Benefits in case of death and survivor's pension

1.The person who furnished the funeral expenses of an insured person who died due to an employment injury/occupational disease shall be fully reimbursed at levels to be established under the SII Regulations.
2. When an insured person dies, his dependants shall be entitled to a survivors pension, of an amount depending on their number, provided they
  • were dependent upon him, and
  • shared with him a household.
3. The eligible survivors are defined in Art. 40 of this Act.
4. The amount of survivors pension is 50% for widow or widower and 25% for orphan and parent, grandchild and grandparent, subject to a total cumulative amount of 100 % of the pension the deceased was or would have been entitled to. In case the beneficiary is only one orphan, his/her pension shall be equal to 50% of the pension the deceased was or would have been entitled to.
5. The orphan shall have the right to survivors pension even if the surviving parent is employed or otherwise economically active, or receives a pension as of his own right. In such a case the total pension awarded to orphans shall not exceed 50% of the pension the deceased was or would have been entitled to.


CHAPTER V

UNEMPLOYMENT BENEFIT

Article 53
Conditions for eligibility

1.The insured person shall be entitled to an employment benefit, provided he
 a) has contributed  to social insurance  for at least 12 months,
 b) is certified by the competent office as
   • being unemployed and
   • willing to undergo training and retraining, and
 c)has no other benefits by the present Act, except the partial disability pension.
2. Unemployment benefit could also be paid even in cases of participation in special (state and local) public programs. In this case the complete remuneration should not exceed the minimum monthly wage.


Article 54
Benefit amount

1. The unemployment benefit shall be flat-rate of an amount to provide at least for a minimum living standard, annually indexed by the decision of the Council of Ministers, with regard to price index development of selected commodities.
2. The flat-rate-base benefit shall be decided by the Council of Ministers
3. The beneficiary with dependent children, of up to 15 years of age, shall receive a flat-rate family supplement, payable in respect of each dependent child, at the level of 5% of the unemployment benefit, subject to a maximum of 20%. If one of parents is employed or entitled to a full pension, such supplement should be reduced by 50%.


Article 55
Benefit period

1. The unemployment benefit shall be payable up to 12 months.
2. For the persons that could be employed with interruptions, while receiving one year of the unemployment benefit, this benefit period may be postponed up to two years, provided the unemployment benefit period, as whole, should not exceed 365 calendar days.
3. The persons who are attending training and retraining courses, are entitled to unemployment benefit, if they are not paid for this period. The payment of benefit should not exceed 6 months beyond one year of unemployment benefit. This  right is also enjoyed by insured persons under maternity benefit and full disability pension.


CHAPTER VI

PROVISIONS COMMON TO ALL BENEFITS

Article 56
Eligibility to benefit

1. Insured persons, who have the necessary period of insurance, but fail on the age  condition-the same for eligible survivors who do not fulfil the age or other conditions-shall become eligible to benefit on reaching the retirement age or fulfilling the other conditions.
2. Persons who have fulfilled all conditions, but not the disability condition, shall be awarded a pension on being certified as disabled.
3. The widow/widower that becomes disabled later than 10 years of spouse  death,  has no right to be entitled to a survivors' pension.


Article 57
Withdrawal of Benefit Instalments

1. Benefits shall replace loss of earnings from employment or other economic activity.
2. The beneficiary has no right to instalments of benefits for any period, in respect of which he was eligible to wage or other income as employed or self-employed  under economic activity.
3. Benefit instalments delivery shall be suspended for any time the beneficiary is employed or otherwise economically active.
4. Benefit shall not be withdrawn only in cases where the law explicitly expects employment and economic activity (e.g. partial disability pension)


Article 58
Insurance periods

1. Periods of insurance shall include all periods
 a) for which contributions were paid,
 b) during which a benefit was awarded by social insurance, including the period over which a partial disability pension was awarded.
2.The Council of Ministers may declare other periods as insurance periods provided it reimburses the Social Insurance Fund from the State Budget.


Article 59
Assessment basis for benefits

1. The assessment basis for all benefits shall be the wages and salaries in respect of which contributions were paid continuously during 3 years in the last 10 years of employment. Beyond 1996 the assessment basis shall be calculated upon the wages, which contributions are to be paid for, since 1994 till last year of employment.
2. The annual assessment basis for calculation of sickness, maternity and other short-term benefits, shall be the total annual wage in respect of which contributions were paid.
3. The individual annual assessment basis for initial calculation of pensions shall be increased each year by an average increment upon the average total of contributions, as compared with total average contributions per capita, collected in the preceding year.
4. The SII shall regularly show the minimum level of pension, the basic pension, and propose, according to a minimum standard of living, an increase of basic pension for the next financial year as well as indexing of the minimum pensions already awarded.
5. Disability pensions shall not be calculated on assessment basis lower than what once had been awarded. Once disability pension is acquired, the pension amount shall be considered as minimum pension, when calculating any other pension under the Social Insurance Act.


Article 60

For the unremunerated people, the benefits are calculated based on minimal wage.


Article 61
Indexing of pensions

1. The basic old-age and disability pensions shall be annually indexed, with regard to price change of goods considered as essential for having a minimum living standard.
2.The partial old-age and partial disability pensions shall be annually indexed in proportion to the full old-age pension.
3. Survivors pensions shall be annually indexed in proportion to the old-age and invalidity pensions, in conformity with SII regulations.


Article 62
Right to pension

1. Pensioners with a right to more than one pension, may choose only one of them.
2. The right to a pension shall not be forfeitable. The right to an individual monthly instalment of a pension shall be forfeited in a year from the date of the commencement of a right. In other cases, the right to a monthly pension instalment shall be forfeited from the date of claim submission. The right to other benefits shall be forfeited after one year from the date of the commencement of a right.
3. The acknowledged but not drawn pensions shall be delivered any time, but only for three years. The rest of the pensions, which have been acknowledged, but less paid, shall be delivered any time, but only for three years.
The reimbursement of overpayments is requested to be done not later than three years from the execution, and not later than 6 months from the date those were verified.
The persons benefiting through illegal means and manners, or having not informed on their change or abolition shall pay all sums back.
4. A disability pension shall be suspended for periods the pensioner refuses to visit the competent medical expert committee. It shall also be suspended when he refuses to participate in training/retraining courses or undergo medical rehabilitation or treatment against alcohol and drugs, which aim to retrieve his capacity for work.


PART V

SOCIAL INSURANCE FUND

Article 63

Benefits under this Act are tax free.


Article 64

Benefits, provided under this Act, shall be financed out of the Social Insurance Fund (hereinafter as SIF), to which employers, employees as well as other voluntary insured persons shall regularly contribute.
Contributions of employed persons shall be shared by their employers.


Article 65

1. The SIF shall be independent of the State Budget. It will be administered by the SII, in accordance to its Statute, approved by the Council of Ministers.
2. A part of SIF shall be in hard currency to be used for international obligations.


Article 66
Revenues

The revenues of SIF shall be
 a) contributions from insured persons and their employers,
 b) contributions from the State Budget in respect of persons, who cannot pay contributions, especially the
 • citizens serving compulsory military service,
 • employees benefiting from the unemployment insurance,
 • citizens covered  by benefit scheme by decision of the Council of Ministers,
 c) subsidies by the State Budget to support additional costs due to
 • benefit indexing, according to this Act, approved by Council of Ministers and determined by this Act.
 • insolvency of the fund.
 d) payments for additional activities, determined by Council of Ministers.
 e) subsidies by State Budget, approved by People's Assembly;
 f) incomes by SIF investment.
 g) other incomes, including penalties, fines, incomes from the administrative activities of social insurance, gifts, inheritances, etc.

Article 67
Expenditures

1. The expenditures of SIF includes:
 a) payments of awarded benefits, in cash and in kind, for insurance, aids and pensions;
 b) administrative costs.
2. When social insurance expenditures are not covered by incomes, predicted in Art.66, the difference is to be covered by State Budget.
3. The administrative expenditures, up to 5%, are to be determined by annual budget of SII.


Article 68
Management of SIF

1. Contributions shall be administered separately in the five branches of social insurance:
 a) sickness insurance branch,
 b) maternity insurance branch,
 c) pensions insurance branch,
 d) employment accidents/occupational diseases  insurance branch,
 e) unemployment insurance branch.
2. Transfers between the social insurance branches are not permitted.
 The funds transfer and management shall be ruled by SII regulations to be approved by Council of Ministers.
3. Revenues and expenditures of the social insurance shall be regularly monitored and annually audited by the Auditing Council, set-up in conformity with the SII Statute.


Article 69
Solvency of the SIF

The State shall guarantee the solvency of SIF. The Council of Ministers shall have the right to supervise the financing of social insurance, audit annual accounts and approve the budget. The SII shall submit to Council of Ministers and People's Assembly the social insurance budget according to one year, three years and a long-term perspective.  It shall also submit to Council of Ministers and People's Assembly the annual report of SII activities, including incomes and expenditure.


Article 70
Reserve fund

1. The SII shall establish a Reserve Fund.
 It has to cover, at least, three months payment of pensions.
2. The reserve shall be created within 5 years of the date this Act becomes effective. In any case of depression under the determinate level, appropriate remedial measures shall be taken by SII to achieve the fixed quota.
3. Fund surpluses over the determined level of SIF shall be part of the reserve capital, which have to be properly managed in accordance to general financial regulations, - as it’s defined in SII Statute, - with minimum sustainable risk, possible to occur.


PART VI

MANAGEMENT AND ADMINISTRATION
Article 71

1. The management and administration of social insurance in Republic of Albania shall be entrusted to the Social Insurance Institute (SII).
2. SII shall be an independent state public institution.
3. SII shall be an Albanian legal body, seated in Tirana. SII shall be empowered to co-operate, conclude agreements and have contacts with international non-governmental organisations acting on the social insurance field.
4. SII shall be managed by
 a) Administrative Council of SII and
 b) Director General of SII.


Article 72

1. Administrative Council (AC) of SII shall be a supreme executive body.
2. Administrative Council of SII shall be composed of 12 members, nominated
 a) 6 members by the Council of Ministers, representing:
   • Ministry of Economy and Finance;
   • Ministry of Labour, Social Protection, Emigration and Ex-persecuted people;
   • Ministry of Health and Environment Protection;
   • Ministry of Justice;
   • Central Directorate of the Savings Bank; and
   • Social Insurance Institute,
 b) 3 members by employers' organisations (2 largest employers, and 1by private employers, in case of absence of the former),
 c) 3 members by workers' organisations, sized by membership.
3. The nomination shall be valid for a period of not more than 5 years.


Article 73
The Presidency of AC

Administrative Council shall elect the President and two deputy-presidents by secret ballot.
The President shall be elected among 6 Council of Ministers representatives, the 1st deputy-president shall be elected by the representatives of the employers and the 2nd deputy by the representatives of trade unions.


Article 74
The competencies of the AC

1. The AC has the following competencies:
It shall
 a) elect the General Director of SII,
 b) approve each year the annual report, the annual balance sheet, the annual budget and the three year financial programs of the social insurance scheme,
 c) decide on all matters concerning investment of funds,
 d) propose amendments of the SII Statute and Social Insurance Law to the Minister of Labour, Social Protection, Emigration and Ex-persecuted people.
 e) decide regarding important agreements and contracts,
 f) approve the Auditing Commission on activity of SII.
 g) approve SII Regulations concerning financial matters proposed by Director General.


Article 75
Director General

Director General of SII
 a) represents  SII and manages its activity.
 b) is responsible for the management and reports each year in AC on SII activity.
 c) nominates Steering Board, as consultative Body of Director General, composed of deputy-General Directors and other Directors of SII.


Article 76
Competencies of General Director

Director General shall
 a) approve the SII regulations concerning organisation, administration and administrative procedures, where empowered by this Act.
 b) determine the internal rules of the SII.
 c) determine and approve  the structure and staff number of SII.
 d) nominate the members of SII staff and Directors of Local Offices, and decides upon their wages.
 e) decide on all matters concerning the SII activity within the limits of its financial plan.
 f) decide on all matters of SII administration and report to the AC on his activity.
 g) propose to the AC the SII budget, financial plan, annual report and the financial forecast for three years, as well as SII regulations concerning contributions and financial matters.


Article 77
The relations between SII and the Ministry of Labour, Social Protection, Migration & Ex-persecuted People (MOLSP)

As the Reporting concerns:
1. Each year the AC of SII shall submit to the Council of Ministers, through Ministry of Labour, Social Protection, Migration and Ex-Persecuted People:
 a) the annual report and balance sheet of the SII;
 b) the annual SII budget and the financial plan ;
 c) the 3 year financial development and the perspective of  SII.
2. Once every 5 years the AC of SII shall present to the Minister of Labour, Social  Protection, Migration and Ex-Persecuted People and through him to  Council of Ministers, a 5 years forecast on SII development.
3. Any proposal on amending the Social Insurance Act and decisions of the Council of Ministers to implement it, shall be submitted through the Minister of MOLSP to Council of Ministers, and by Council of Ministers to the People's Assembly, being accompanied with a statement of the Minister of Finance and the Director General of the SII, on the financial impacts of the proposal.


Article 78
SII Statute

The Council of Ministers shall approve the SII Statute. The Statute shall rule the activity of SII and regulate the relations between AC and General Director.


PART VII
PROCEDURES

Article 79
Liability of employer

The employer shall be liable to register all his employees, to calculate, deduct out of wage and transfer regularly social insurance contributions. Also he shall inform the SII about any changes that are important for the insurance liabilities and eligibility of the employed person, as specified in SII regulations.

Article 80

The employer is responsible for employment and vocational rehabilitation of invalids, who are able to work in special employment conditions, according to recommendations of competent organs (medical expert committees), and fixed by labour offices. The rules are to be determined by a special Act.


Article 81
Registration

Registration shall be an administrative procedure and does not establish any eligibility to social insurance coverage. Lack of registration shall be punished by an administrative penalty, in conformity with SII regulations.

Article 82
Procedure for Collection of Contributions

1. All contributions to the SIF shall be collected by SII at one time.
2. The SII shall distribute the collected contributions to the five social insurance branches and manage them separately.


Article 83

The medical personnel, as well as the members of special medical committees, having an activity against the determined norms and impairing the social insurance funds, shall be fined (rules and the fine size are to be determined by special regulations of SII).


Article 84
Claiming

1. Insured persons shall claim benefits whenever they are convinced they have satisfied the conditions for eligibility.
2. Claims shall be filed with the SII Local Agency, according to the
a) place of work, for employed persons,
b) place of residence, for all other insured persons.
3. Claims for unemployment benefit shall be filed with Local Labour Office, based on work place, or residence place.


Article 85
Awards

1. Short-terms benefits, for employed persons, under the sickness, maternity, and employment injuries branches shall be awarded at employment centre; for  other economically active persons - in the social insurance local agencies.
2. Short-term benefit under the unemployment insurance branch shall be awarded at labour offices, under the responsibility of Ministry of Labour, Social Protection, Migration & Ex-Persecuted People. The latter shall issue Ordinances concerning the requests related with documentation.
3. Pensions shall be awarded at competent local offices of SII.

Article 86
Appeals

1. Appeals against decisions on benefits shall be submitted to regional offices.
2. Appeals against decisions of regional offices shall be submitted to the Central Office of the SII.
3. Appeals not favourable resolved shall be submitted to courts, for final solution.


Article 87
Payments

1.The payment of social insurance benefits shall be entrusted to a professional financial institution, to be decided by the SII Administrative Council.
2. The payment of unemployment benefit may be realised by labour offices. Rules are to be determined by Ministry of Labour, Social Protection, Emigration & Ex- Persecuted People and the SII.


PART VIII

TRANSITIONAL PERIOD PROVISIONS

Article 88
Acquired Rights

1. Pensions awarded under the Act. No. 4171, of April 13, 1966, "On Social Insurance of People's Republic of Albania", shall be considered as quite acceptable and shall not be subject to any change, with the exception of indexing. The Council of Ministers shall index pensions at the same rate each time the wages would be indexed, due to the prices’ increase.
2. Pensions awarded under the Act No. 4976, dated on 29.6.1972 "On Pensions of Agricultural Co-operatives Members of People's Republic of Albania", including all posterior changes, shall be considered well awarded and shall not be subject to any change; only indexed. The Council of Ministers shall index pensions, due to increase of prices.
3. Persons who, prior to this Act comes into power, were awarded a short term-insurance, such as disability, maternity and unemployment benefit, etc., shall continue to draw it at the same level.
4. Persons who, prior to this Act becomes effective, were awarded an old-age pension, early retirement pension, survivors pension, long service pension, long service pension for determined cases, pension for special merits, shall go on to receive their pension. The same shall apply to the awarded supplements for participation in the War against nazi-fascists invaders.
5. Persons who have reached pensionable age, 55 – women / 60 - men and have continued in employment, shall preserve the right to choose the more favourable legislation.
6. Persons, who under the previous Act have acquired the right for a disability pension, shall continue to receive it.  If a reassessment of health situation, happens, the disability pension claimant shall have the right to choose the more favourable legislation.
7. Persons, already entitled to benefit an early retirement pension, shall receive an old-age pension payable at 70% of wage, the pension was calculated upon, once they meet the pensionable age set under the Act No. 4171, dated on 13.9.1966, "On Social Insurance in People's Republic of Albania".


Article 89
Application of New Arrangements

Provisions of this Act shall apply only to contingencies that arise after the date this Act comes into power.


Article 90
Payment of contributions

1. In line with Article 10 of this Act, the contribution of employed people, of 10%, shall be paid:
  • for 1993: the State Budget should pay 10%;
  • for 1994: State Budget 7%; employees 3%,
  • for 1995: State Budget 4%; employees 6%
  • from 1996 on: employees should pay 10%.
2.The contribution of self employed people in agriculture shall be implemented gradually at the rates to be decided by Council of Ministers the proposal of SII.
The Council of Ministers may also decide to support the payment of contribution in respect of certain small incomes groups of the economically active population.


Article 91
Periods considered as insurance periods

1. All periods of employment, prior to the coming into force of this Act, reckoned as work stage, valid for previous social insurance system, shall be considered as periods of insurance under this Act.
2. Periods of non-employment, reckoned under the preceding social insurance as periods of employment prior to effectiveness of this Act, shall be reckoned as periods of insurance under this Act.
3. The periods after this Act comes into force, shall be reckoned as social insurance period, only if contributions have been properly paid in conformity with this Act.
4. The periods, the women shall attend university studying, as since September 1st, 2000 on shall reckon as insurance period only in respect of old-age pensions.


Article 92
Gradual prolongation of waiting periods for pensions

1.The periods for eligibility for an old-age pension shall be increased as follows:
 

THE AGE AND WORKING TIME IN YEARS FOR EACH CATEGORY

M E N

YEARS CATEGORY  I CATEGORY  II CATEGORY III
 Age working Age Working age working
  time  Time  time
1993 50 20 55 25 60 25
1994 50 20 55 25 60 25
1995 51 21 56 26 60 26
1996 51 21 56 27 60 27
1997 52 22 57 28 60 28
1998 52 22 57 29 60 29
1999 53 23 58 30 60 30
2000 53 23 58 31 60 31
2001 54 24 59 32 60 32
2002 54 24 59 33 60 33
2003 55 25 60 34 60 34
2004 55 25 60 35 60 35
2005 56 26 
2006 56 27 
2007 57 28 
2008 57 29 
2009 58 30 
2010 58 31 
2011 59 32 
2012 59 33 
2013 60 34 
2014 60 35 


 
W O M E N

YEARS CATEGORY  I CATEGORY  II CATEGORY  III
  Age working  Age working  age working
  time  time  time
1993 45 15 50 20 55 20
1994 45 15 50 21 55 21
1995 46 16 51 22 55 22
1996 46 17 51 23 55 23
1997 47 18 52 24 55 24
1998 47 19 52 25 55 25
1999 48 20 53 26 55 26
2000 48 21 53 28 55 28
2001 49 22 54 30 55 30
2002 49 23 54 32 55 32
2003 50 24 55 34 55 34
2004 50 25 55 35 55 35
2005 51 26 
2006 51 27 
2007 52 28 
2008 52 29 
2009 53 30 
2010 53 31 
2011 54 32 
2012 54 33 
2013 55 34 
2014 55 35 

An insured person shall be eligible to an old-age pension awarded upon conditions of first and second categories, if he has acquired not less than 3/4 of insurance years as employee in jobs of those categories.
The insured person who meets the request on employment period, as prescribed in the above tab., where more than half of it is done in mines, shall be eligible to a pension in first category conditions.


Article 93
Mothers with many children

For mothers with 6 or more children, of more than 8 years old, the old-age pension is to be paid at age 50; the required employment period must be:
 

YEARS   INSURANCE YEARS
      1993          15
      1994          16
      1995          17
      1996          18
      1997          19
      1998          20
      1999          21
      2000          22
      2001          24
      2002          26
      2003          28
      2004          30

If any period of employment under agricultural co-operatives system is required to be included at periods required by the above table, the pension shall be awarded under the Act No. 4976, dated 29.6.1972 "On pensions of ex-members of agricultural co-operatives", including its posterior changes.


Article 94
Categories of work

Earlier retirement, in comparing with limits determined under this Act, for special groups (e.g. miners, etc.), may be contracted through supplementary pensions insurance, under a scheme to be set by Council of Ministers.


Article 95
Partial Pension

The insured persons shall be eligible to a partial old-age pension at the age 60, men, and 55, women, provided they have got the following work stage:
 

YEARS
INSURANCE YEARS FOR MEN INSURANCE YEARS FOR WOMEN
1993 12 years and 6 months 10
1994 12 years and 6 months 10 years and 6 months
1995 13 11
1996 13 years and 6 months 11 years and 6 months
1997 14 12
1998 14 years and 6 months 13
1999 15 14
2000 15 years and 6 months 15
2001 16 16
2002 17 17
2003 18 years and 6 months 18 years and 6 months
2004 20 20

Partial pension is to be paid in relation with work stage, requested in the proper year.


Article 96

The insured persons who have been employed partially in ex-agricultural co-operatives and partially in state sector, shall be eligible to pension under the Act No. 4171, dated on 13.09.1966 "On social insurance in People's Republic of Albania", including all posterior changes, if  the insurance period in state sector is:
• for old-age pensions: not less than half of the period, determined in Art. 92.
•   for disability or survivors pensions: not less than half of the period  predicted by Act "On Social Insurance".  In other cases, the old-age pension shall consist of a basic pension and a supplement. The basic pension shall be determined by the Council of Ministers, whereas the supplement shall be equal to 1% for each year of insurance, starting from 01.10.1993., multiplying the average assessment basis the insured persons have reached through contributions.
The self-employed in agriculture who meet conditions for a pension after this provision becomes effective can buy past insurance periods paying the relevant contributions at an amount determined by the Council of Ministers, but not periods prior to 01.10.1993. This right shall be forfeited until 30.06.2000.
The entitlement conditions for a pension are those determined under the Act  No. 7703, date 11.05,1993 “On Social Insurance in Albania republic”.
For the purpose of this provision, the period covered with contributions after enactment of Law No. 7703, date 11.05.1993 “On Social Insurance in Albania Republic” shall be acknowledged as insurance period when working for the state.


Article 97

The women that till December 31, 1994 will have not less than 23 years of employment in the first and second category of jobs, on their application, could receive early retirement pension, calculated at the rate of 60% of average monthly wage of 3 successive years in the last 10 years of work stage.
Once the pensionable age will be reached, those insured people will be eligible to a full pension.
Early retirement pension shall not be higher than the maximum old-age pension.


Article 98

Council of Ministers may reduce up to 6 months the pensionable age and insurance period, if the transitional period so requires.


PART IX

FINAL PROVISIONS

Article 99

The Acts, decrees, decisions, ordinances as well as any other provision that is against this Act, shall be abolished.


Article 100

This Act shall enter in force on October 1st, 1993.


Tirana, on 11.05.1993

CHAIRMAN OF PRESIDENCY OF
PEOPLE'S ASSEMBLY
Pjeter ARBNOR