Armenian social insurance and social assistance system is governed by the social security law passed in 2002 and implemented in 2003.
The system covers employed and self-employed persons. There are special systems for military personnel, police, judges, public prosecutors and their family members.
Funds are contributed by both the insured person and its employer in the following proportions: (i) Insured person: 3% of net monthly earnings. There are no minimum or maximum earnings used to calculate contributions; (ii) Employer: If the employee's monthly income is less than 20,000 drams (approximately USD 55), a monthly contribution of 7,000 drams (approximately USD 19) is paid; if the employee's monthly income is 20,000 drams (approximately USD 55) to 100,000 drams (approximately, USD 275), a monthly contribution of 7,000 drams (approximately USD 19) plus 15% of income greater than 20,000 (approximately USD 55) drams is paid; if the employee's monthly income exceeds 100,000 drams (approximately, USD 275), a monthly contribution of 19,000 drams (approximately USD 52) plus 5% of income greater than 100,000 drams (approximately, USD 275), is paid. Both the employee’s and the employer's contributions also finance sickness and maternity, work injury, and unemployment benefits.
In the case of self-employed person, the contribution amounts to 15% of annual income from 60,000 drams (approximately USD 165) to 1,200,000 drams (approximately USD 3270). If annual income is greater than 1,200,000 drams (approximately USD 3270), the annual contribution is 180,000 drams (approximately USD 490) plus 5% of income greater than 1,200,000 drams (approximately USD 3270). The self-employed person's contributions also finance sickness and maternity and unemployment benefits. Farmers are exempt from contributions.
The conditions for retirement are: (i) age: 63 years old for men and 62.5 years old for women. However retirement age for women is rising gradually to age 63 by 2011; and (ii) at least 25 years of covered employment. However, people can retire at age 59 if they have at least 25 years of covered employment of which at least 20 years were in arduous or hazardous work; or even at age 55 with at least 25 years of covered employment of which at least 15 years were in extremely arduous or hazardous work. Covered employment includes years as a university student, years of service in the armed forces, and periods receiving unemployment benefits.
The old-age pension is payable monthly and amounts to 100% of the basic pension plus a bonus pension (450 drams (approximately USD 1.20) for each full calendar year of covered employment multiplied by a personal coefficient). There is no legal minimum pension, but the basic pension is 8,000 drams (approximately USD 22). There is no maximum pension. Benefits are adjusted on an ad hoc basis according to available resources.
Further, men and women at age 65 with less than 5 years of covered employment are entitled to receive a social pension of 8,000 drams a month (approximately USD 22).
Source: Social Security Programs Throughout the World: Asia and the Pacific, 2010, available at http://www.ssa.gov/policy/docs/progdesc/ssptw/2010-2011/asia/index.html