New Social Security Law

On 3 July 2022, Law No. 1 of 2022 (the “Social Security Law”) was published in Qatar Official Gazette. With the exception of certain provisions, the Social Security Law will come into an effect after 6 months of the publication date. With the Social Security Law coming into force, the previous law regulating social security and pension (Law no. 24 of 2002) has been repealed.

Applicability

Pursuant to the Social Security Law, all Qatari nationals either working in the government or private sector shall be subject to the social security scheme contained in the Social Security Law, provided that they are at least 18 years old and that their employment is regular and permanent for a period of more than one year.

Contributions

The Social Security Law provides that contributions shall be calculated on the basis of the contributory wage (basic salary plus the social and housing allowance) and shall be capped at 100,000 QAR (except for those who are already effectively enrolled with an amount exceeding 100,000 QAR).

The contribution shall be 21% of the contributory wage and should be paid as follows:

• 7% of the contributory wage shall be deducted from the employee’s salary; and
• 14% of the contributory wage shall be paid by the employer.

Unlike under the previous law, any housing allowance counts towards pension contribution along with any social allowance. The housing allowance should not exceed 6,000 QAR.. In case the employee is provided with accommodation in deference to receipt of a housing allowance, the housing allowance should be calculated as if the employee had received the housing allowance in cash.

Payment of pensions

The pension is payable if the employee’s service is terminated for any of the following reasons:

a.  death;
b.  disability as determined by the medical committee;
c.  attainment of the retirement age, according to the age prescribed in the career regulations to which the individual is subject, of no less than sixty (60) years;
d.  resignation;
e.  dismissal under a disciplinary decision or based on a final judgment rendered against the employee in a crime involving breach of honour or honesty; or
f.  termination of service.

Except in situations under a and b above, in order for the individual to be eligible for the pension, the contributory period should be at least 25 years including the period of actual service which should be 20 years and the individual’s age should be at least 50 years, If the employee does not meet the minimum years the same can be purchased as notional service subject to certain conditions being met.

The pension is to be adjusted as follows:

1. the contributory period or a period of 30 years, whichever is longer, if the service is terminated due to death or disability as a result of work-related injury;
2. the contributory period or a period of 25 years, whichever is longer, if the service is terminated due to death or disability; or
3. the contributory period if the service is terminated for any other reason.

The pension (defined as the amount that is paid monthly to the pensioner or his beneficiaries) shall not be less than 15,000 QAR for government sector employees (except in some cases of termination of employment). The same amount is currently set for private sector employees as well.

The Social Security Law and the end of service gratuity

There are no explicit provisions in the Social Security Law addressing the end of service gratuity. However, pursuant to the Labour Law (Law No. 14 of 2004) if employees are enrolled in a pension or other retirement scheme that provides greater benefits to the employees than the end of service gratuity are not eligible to receive the end of service gratuity as well. Similarly, the Social Security Law provides that eligible individuals are not entitled to benefit from more than one pension or other retirement scheme.

Next steps for the private companies employing Qatari nationals

1. All private companies who are employing Qatari nationals will have to look at any pension scheme they have in place and determine whether the same provides Qatari employees benefits greater than the 21% provided under the new law.
2. Assuming that the new law provides for better benefits than the existing pension scheme, employers should amend the employment contracts for its Qatari nationals to include the provision regarding the state pension scheme and to ensure that such Qatari national employees are not contractually entitled to both enrolment in the state pension scheme and the end of service gratuity or any other pension plan. In addition, the salary of such employees will need to be amended to include required allowances.
3. Employers will have to register with the GRSIA (General retirement and social insurance authority) and also register their Qatari national employees.

How can we help?

Al Tamimi and Company will be happy to assist employers adapt with the new system and to ensure that employers are compliant with the obligations of the Social Security Law.