Social security

what is social security?

It is a program that includes income resulting from retirement, medical care and death. This program is deemed as one of the largest global programs affiliated to governments. The social security is known as a means that helps provide social care and economic insurance for individuals by relying on government funds. It manages programs that help individuals benefit in the stage of disability, old age and death, and provide insurance against unemployment and the state of being unemployed.

Goals of Social Security

Social security, as a human right, seeks to achieve several basic goals, namely

1. Addressing the lack of security for individual income by trying to reduce poverty, providing all health and social services for all individuals, and ensuring adequate living and working conditions.
2. Reducing the phenomena of inequality among individuals.
3. Providing assistance to individuals who need it, as being one of their legal rights.
4. Ensuring that there is no discrimination in society on the basis of gender, affiliation or nationality.
5. Promoting sustainability, efficiency and bearing tax duties imposed on individuals.

Categories which are subject to the Iraqi Social Security Law

• The provisions of the Iraqi Social Security Law No. (39) of 1971 shall apply to all workers and employees of institutions and companies in the private, mixed, and cooperative sector who work within the region, regardless of their number, and who are covered by the provisions of the Labor Law.
• Employees working for international organizations or foreign diplomatic missions.
• The employees working for entities that require a special social law for them, to which the employees working for them shall be subject.
• Personnel of the Internal Security Forces and the Regional Guard.

The most important legal terms for Social Security are as follows

The Insured: Every person who performs work, whether collectively or individually, or in the unorganized sector of work, and pays the required security contribution to the security fund, in return for any guarantees, compensation bonuses or salaries from the worker's security fund covered by services or social security.

Worker: Every natural person, male or female, who performs his/ her work under the direction of the owner of the facility, and under his/her management, whether by a written, explicit or implicit contract, whether by way of training, testing, or practicing intellectual or physical work in return for a wage of any kind .

Self-employed: Anyone who performs work and does not work for others.

Compensation: All that the fund pays to the insured during the validity of his insured service period in accordance with the law.

Retirement: It is the full or partial salary paid by the fund to the insured, or to the heirs after his/ her death, after the end of his/ her service period, disability, or death.

Mechanisms of Work of the Ministry of Labor

1. Every Arab or foreign company, upon commencing work in Iraq, shall formally notify the Department of Labor and Social Affairs in the event that it employs one worker or more, regardless of their nationalities, in order to include them within the provisions of social security.
2. Every company, starting from the date of notifying the Ministry of Labor, shall issue an official authorization addressed to the Department (Department of Retirement and Social Security for Workers - Department of Contributions Collection). Said authorization shall include authorizing a representative of the company to review all purposes related to the application of the Retirement and Social Security Law No. (39) of 1971 , including any inquiries, complaints and forms for payment of monthly contributions.
3. When the company receives the inclusion decision issued by the Retirement and Social Security Department for Workers and no objection is made thereto within seven (7) days from the date of notification, said decision shall be deemed effective and the company’s management shall pay the contributions in accordance with the law.
4. The company, through its representative, shall pay the workers' contributions in accordance with the following details
   • Payment shall be made monthly in accordance with the payment forms prepared by the Department in two copies.
   • It shall include the details of the paid contributions. The company shall deduct 5% of the worker's monthly wage plus 12% of the wage paid by the company to the worker. Therefore, the total paid contributions shall be 17%. As for the companies doing business and whose profits result from the sale of oil or other hydrocarbon materials produced in Iraq or exported therefrom, or the sale of rights or interests related to oil, the percentage of 25-30% of the wages on the owner of the company and 5% of the wage of the worker shall be deducted in accordance with Article 27 of the Retirement and Social Security Law for Workers.
   • Contributions shall be paid from the date the company is covered by the Security Law and not from the date of issuing the inclusion decision (i.e., payment shall be made retroactively).
   • In the event that the company delays in paying monthly, a monthly fine shall be imposed at the rate of 2% of the amount of contributions for each month of delay because the legal period for paying contributions is during the following month in accordance with Article 30 of the Retirement and Social Security Law for Workers.
   • The company shall, in accordance with a monthly payment form, notify us on a monthly basis of the variables in the movement of workers. This is because the names of workers whose services are terminated during the month shall be fixed so that the Retirement and Social Security Department for Workers can stop the deduction of contributions from them. Further, the names of the workers who are appointed during the month shall be fixed so that the Department can deduct their contributions.
   • The contributions due for the month shall be paid during the next month. For example: June contributions shall be paid during the month of July, and it will be so for the following months.
   • The company shall submit a statement at the beginning of each year called (the annual statement) wherein the name of the company / its head office / the name of the company’s owner / its projects / a statement of the insured workers, their names and their full addresses, the amount of their wages together with the annual bonus, the contribution due on them and the number of the worker for the workers present at the beginning of each year shall be stated.
   • If the worker's service ends with the company for which he/she works without notifying the Security Department, the company shall be liable for paying contributions for him in accordance with Article (36) for the worker whose service ended up to the date of notification of the said Department.