What is Social Insurance? details of his regime in Egypt

Social insurance is an obligatory system enforced by governments for the protection of the working class. The system is applied by the employer whereby they deduct a percentage of the employee’s salary each month and pay it to the social insurance fund.

The advantage of social insurance is that it insures citizens and their family members against old age, work related accidents, illness, or death.

A brief history on the social insurance system:

The first social insurance system was implemented in Germany in 1884 after which several European countries followed. By the 1920s most European countries had some type of social insurance system in place and by 1935 the Unites States implemented its own system. 

A pension system was implemented in Egypt in 1854. As time went by the system was improved upon but it was still limited to those who worked in the public sector. In 1975 the first inclusive social insurance system was implemented for both public and private sector employees. 

“The advantage of social insurance is that it insures citizens and their family members against old age, work related accidents, illness, or death.

More details on the social insurance system in Egypt:

Social insurance system laws were recently changed in August 2019 with an implementation date of January 2020 as follows:

• All social insurance laws including laws concerning citizens working abroad have been codified under one law.
• All types of social insurance have been unified under one cash fund.
• Retirement age changed to 60 years for employees and 65 years for business owners and seasonal workers.
• Categories such as seasonal workers, sole proprietorships, and business owners were included under the law.
• Fines have been increased to 10,000-20,000 EGP while jail time has been abolished with some exceptions.
• The percentages deducted from employees’ salaries were changed according to each employee category as follows:

• The percentage deducted from employees’ salary is 18.25% for both the public and private sectors with an incremental increase every 7 years with an upper limit of 26% with some exceptions.
• For employees who pay their own social insurance the percentage is now 11% of their monthly salary.
• Business owners and shareholders will pay 25% of their monthly income.
• For those employed abroad: 21% of their income.
• For seasonal workers: 13% of their salary.