Social security amendments to encourage SME investments
KUWAIT: The Public Institution for Social Security (PIFSS) held a press conference yesterday to announce new social security amendments. Finance Minister Nayef AlHajraf said the amendments to the fifth chapter and supplementary insurance by PIFSS aim to encourage citizens to invest in medium and small enterprises (SMEs).
“The amendment of the fifth chapter, which will start early next month, will positively affect the economic and social fields of the country and is in line with its development plans,” Hajraf said. He pointed out that these changes are the first since 1981, indicating that the amendments are mainly related to linking academic qualification with financial segments through which insured people participate.
Director-General of the General Organization for Social Insurance and Labor Meshal Al-Othman said the amendments were based on studies conducted by PIFSS. “The study showed that 49 percent of insured people are enrolled in the lowest subscription rate starting at KD 200, resulting in a very low pension for fifth-chapter subscribers,” he said.
He added that the total number of participants in the KD 550 or below bracket is 84 percent as a result of not updating their contributions during their career for many reasons, such as preoccupation with their work and the delay in development between the segments to raise the pension. Deputy Director-General for Insurance Affairs Khalid Al-Fadala said the amendments will achieve goals in the interest of the insured and benefit the economy by making the fifth chapter more attractive, adding that the average pension of basic insurance in the fifth section before the amendment amounts to KD 652, compared to KD 1,100 for employees in the government sector and KD 1,400 for workers in the private sector.