Changes to the private sector social security system include the following:
Currently, the Qatari social security system is administered by the General Retirement and Social Insurance Authority (GRSIA), which provides old age, disability and survivor benefits only to Qatari nationals working in the public sector as well as certain private sector firms such as stock companies and other specified organizations as determined by the Council of Ministers. Excluded persons include the self-employed, household workers, family workers and all resident expatriate workers.
The new law expands private sector coverage to all Qatari nationals aged 18 or older employed in the private sector with employment contracts of a minimum of one year, unless their employer offers better benefits than GRSIA. Voluntary coverage will also be available to self-employed Qatari nationals.
Private sector employers with at least one Qatari employee possessing an employment contract of a minimum of one year are required to participate unless they offer a private pension plan with better benefits than the social plan.
Increase in contribution rates
The new law introduces a monthly earnings ceiling of QAR 100,000 for employee contributions and increases the contribution rates for employees and employers as follows:
- From the current 5% to 7% of gross monthly earnings for employees
- From the current 10% to 14% of gross monthly payroll for employers
Rate increases will be phased in. No schedule has been set as of publication.
Minimum old-age pension
The new law introduces a minimum monthly old-age pension of QAR 15,000. Currently, there is no minimum old-age pension. However, an old-age pension may not be less than 75% of an insured person’s previous earnings.
Social security contributions are currently paid based on an employee’s base pay and social allowances. Since housing allowance is commonly offered by employers, it will be considered covered earnings, up to QAR 6000 per month.
Early retirement age
The age to claim an old-age pension will rise gradually over a period of five years from age 40 to age 50. However, female employees with at least 20 years of social security contributions are entitled to a full pension if they are forced to leave employment earlier to care for children with disabilities.
Contribution period and calculation
The minimum contribution period to receive a full pension will increase from 15 years to 25 years. Insured individuals may still purchase a maximum of five years of social security contributions in order to qualify for a full pension. In addition, the old-age pension at retirement for private sector employees will be calculated based on their average gross monthly salary over the final three years of employment instead of the final five years.
Insured individuals with more than 30 years of social security contributions will be entitled to a monthly pension bonus (the exact amount is not available) when they reach retirement age.
Employers should plan accordingly for this increase in employment costs for Qatari nationals.