Funding of the system of Social Insurance

The National Social Insurance Fund

     However, over the years the system has spread to the vast majority of the population. Many categories of people who are not gainfully employed are also protected by social security and have the status of insured person.

     The affiliation of all workers is compulsory and there are no exceptions, except in cases provided for by bilateral or international social security agreements ratified by Algeria.

The following are therefore covered:

- salaried workers;

- Self-employed workers carrying out a professional activity for their own account;

- Special categories, which include:

• workers assimilated to salaried workers (example: homeworkers, employees by private individuals, seafarers and fishing bosses on the share, artists, apprentices receiving more than 50% of SNMG… .etc);

• workers carrying out specific activities (example: caretakers of non-paying car parks; people engaged in so-called general interest activities, authorized luggage carriers, etc.);

• persons not exercising any professional activity such as: students, pupils of technical education and vocational training establishments, mujahedeen of the national liberation war, the disabled and beneficiaries of the lump sum solidarity allowance, persons practicing a sports activity organized by the employer as well as persons who perform an act of dedication in the general interest or of rescuing a person in danger;

• beneficiaries of social and professional integration schemes.

The particular categories are generally covered for sickness and maternity risks; those exposed to an occupational risk also benefit from the compensation provided for accidents at work and occupational diseases.

     In addition, all holders of replacement income served by social security, namely, holders of retirement benefits, invalidity pensions, annuities for work accidents or occupational diseases whose rate is more than 50%, workers receiving sickness or unemployment benefits and holders of benefits in respect of benefits or rights to maintain social security benefits also benefit from health care cover, family allowances and in certain cases death insurance.

Finally, protection is granted to the beneficiaries of the social insured, who are:

•    the spouse ;

• dependent children;

• dependent ascendants.

    Thus, the national social security system provides social coverage to more than 80% of the population.

    Finally, health care coverage is granted, at the expense of the state budget, to destitute people without social security benefits.

  IV-2- Funding of the system of Social Insurance:

The method of financing the social security system stems directly from its professional nature.

The sources of funding are therefore essentially contributions payable by employers and workers.

The situation is as follows:

 1-For Contributions:

For salaried workers, the single contribution rate is 34.5% of the salary subject to contribution as defined by law. This rate is distributed as follows:

	Employers	Workers	Share of Social Works	Total
Assurances Sociales	12,50%	1,50%	-	14%
Accidents at Work and Occupational Diseases	1,25%	-	-	1,25%
Retirement	10%	6,75%	0,50%	17,25%
Early retirement	0,25%	0,25%	-	0,50%
Unemployment Insurance	1%	0,50%	-	1,50%
Total	25 %	9%	0,50%	34,50%

     For the self-employed, the rate of the global contribution, payable by the taxable person, is 15% calculated on the basis of the taxable annual income or in the absence of turnover, or in certain cases on the basis of the SNMG annual.

This rate is divided equally (7.5%) between the social insurance and retirement branches.

For particular inactive categories, the contribution rate charged to the state budget varies between 0.5% and 7% of the SNMG.

2- State budget intervention:

The State finances:

 -    Family allowances;

- Expenditure known as national solidarity through the granting of a differential supplement for retirees whose pension amount from contributory rights does not reach the legal minimum amount, i.e. 75% of the SNMG and 2.5 times the SNMG for the mujahideen, additional indemnities provided for small retirement and invalidity pensions and for retirement allowances as well as exceptional revaluations.

3- Other sources of funding of social Insurance:

In addition to contributions, funding is also provided by:

- Income from invested funds;

- The contributions of o opening of rights paid by employers in matters of unemployment insurance and early retirement;

- Late payment surcharges and penalties and other financial penalties against defaulting employers with regard to the obligations of taxable persons.

- Donations and legacies.

4- The obligations of employers :

The employer plays an essential role in the subjecting and collection of contributions.

He must within prescribed time limits:

- Make the activity declaration;

- Request the affiliation of the workers it employs;

- Provide statements of wages and employees;

- Pay the contributions, his share, that of the employee as well as that of social works.

IV-3- Administrative and financial organization of social security in Algeria:

The new organization, resulting from the 1983 texts, resulted in the establishment of two national funds responsible respectively for the management of the pension branch and all other branches as well as the collection of contributions.

With Executive Decree No. 92-07 of January 4, 1992, relating to the administrative and financial organization of social security, Decree No. 93-119 establishing the powers, organization and operation of the national security fund social security of the self-employed as well as Executive Decree No. 94-188 on the statute of the national unemployment insurance fund, the architecture of the social security system has evolved as follows:

1-Structuring of social insurance :

The national social security system consists of four (04) National Banks which have the status of a public institution with specific management:

- The National Social Insurance Fund for salaried workers (CNAS): Competent for salaried workers in matters of social insurance, accidents at work and occupational diseases and family allowances.

It also collects contributions from the employees' scheme on behalf of other social security organizations;

- The National Pension Fund (CNR): Manages the retirement of salaried workers and early retirement;

- The National Social Security Fund for Non-Employees (CASNOS): Manages social security for the self-employed;

- The National Unemployment Insurance Fund (CNAC): Manages unemployment insurance benefits;

2-The territorial organization of the funds:

The funds are largely decentralized (in agencies, centers, branches and sometimes specialized counters), with a presence at regional and Wilaya level (compulsory), Daïras, Communes and even sometimes at the level of companies.

3-The management bodies of the social insurance funds:

The caisses have deliberative bodies (boards of directors) and executive bodies (the director general and the officer in charge of financial operations).

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