Democratic Party MP Igli Cara has officially submitted to Parliament a legal initiative that aims to ease the financial burden for pensioners who choose to remain active in the labor market. The draft law, provided by the VNA, proposes the temporary exemption of this category from the obligation to pay social security contributions in the pension branch.
According to the report accompanying the draft law, it is estimated that there are currently around 13,000 pensioners in Albania who continue to be active in work processes.
The initiative argues that the current legislation creates a "discouraging effect" by forcing them to pay contributions while they have already earned the right to a pension.
"This draft law aims to address a clear problem in economic and social practice: the discouragement of pensioners from continuing economic activity due to the double burden of contributions" - states the report submitted to the Assembly.
Who benefits?
The proposal of MP Cara foresees the addition of an article to the existing social security law. The beneficiaries of this exemption will be:
Retirees employed in the private or public sector.
Self-employed retirees, including tradesmen, licensed professionals and craftsmen.
The exemption from contributions will be temporary for 4 years. The report explains that this period without contributions will not be recognized as an insurance period for the purpose of recalculation or additions to the existing pension, thus preserving the "integrity of the scheme".
One of the main pillars of this opposition proposal is the formalization of the economy. By removing the burden of contributions, the aim is for this category to declare its activity and not operate "in the black."
According to the document, the impact on the state budget is estimated to be neutral or positive in the medium term. Although there may be a slight decrease in direct insurance revenues, this is expected to be offset by "an increase in indirect tax revenues" and an increase in declared consumption from this category.
The draft law has already passed through parliamentary procedure and is expected to be reviewed in the relevant committees, where the opposition demands that this proposal be seen as a "priority of the Assembly without party differences."
Despite this, the Socialist Party has so far not voted for any initiative coming from the opposition, even when it has seen it as useful. The majority has rejected them in principle and months later, has returned with the same initiative, but with a socialist signature.
