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Pensions: Old age, disability and survivors

Updated by Victoria Giroud-Castiella on 12.06.2015

Jordan has a public Pay-As-You-Go system, as well as voluntary occupational and voluntary personal pension arrangements. The public PAYG pension system consists of three separate tiers (two of them being managed by the Ministry of Finance)

1)  Civil Pension System: this system is regulated by the Ministry of Finance. It covers government employees recruited prior to 1995. Since then, new employees are redirected to the Social Security Corporation.

2) Military Pension System: this system is regulated by the Ministry of Finance and cover members of the armed forces. Participants in this system receive benefits upon a service period of more than 16 years or upon reaching the age of 60. Those recruited into the army after 2002 are covered by the Social Security Corporation.

3) Social Security Corporation: the Social Security Corporation manages the national pension scheme for private sector workers, employees who joined the civil services after 1995 and military personal recruited after 2002. It is a compulsory scheme for employers previously with at least 5 employees but now extended to all firms independently of size. The contribution rate is set at 14.5% of the employee’s salary, of which 5.5% is paid by the employee (14,5% for self-employed or any worker who join the scheme on a voluntary basis). Employee contributions to the Social Security Corporation are exempted from tax; employer contributions are income tax-deductible.

The social assistance does not seem to prioritize elderly as a target group. There is at present no universal or non contributory social assistance old age pension for the non-insured population as part of the pension system.

Information in this section comes from the Observatory of the International Social Security Association (ISSA). It is collected through surveys carried out by the ISSA in co-operation with the U.S. Social Security Administration (SSA).
  1. Regulatory framework
  2. Coverage
  3. Source of funds
  4. Qualifying conditions
  5. Cash benefits for insured workers (except permanent disability)
  6. Permanent disability benefits for insured workers
  7. Survivors benefits for dependents
  8. Administrative organization

Regulatory Framework

First law: 1978.

Previous law: 2001 (Social Security Law No. 19).

Current law: 2010 (temporary social security law No. 7).

Type of program: Social insurance system.

Coverage

Employees older than age 16 working in private establishments with at least 5 workers (coverage is being extended gradually starting from the Aqaba Special Economic Zone to cover all governorates by end of 2011); government and public-sector employees hired since 1995; employees of universities, municipalities, and village councils; and Jordanian citizens working at diplomatic missions or for international organizations.

Self-employed persons may contribute voluntarily in certain circumstances.

Voluntary coverage for all Jordanian citizens residing in the Kingdom or abroad who cease to be compulsorily covered, subject to a minimum wage and a maximum wage. Voluntary coverage is being extended in 2010 to non-working citizens, including housewives and students.

Exclusions: Civil servants hired before 1995 and military staff hired before 2003; foreign employees in international organizations or foreign political or military missions; and casual labor.

Special systems for public-sector employees covered under civil or military pension laws.

Source of funds

Insured person: 5.5% of gross monthly earnings; insured workers can also contribute for previous uncovered work periods.

The maximum earnings used to calculate contributions for insured persons who joined the scheme after the 2010 law was implemented is 5 times the national average wage or 5,000 dinars.

Voluntary contributors pay 14.5% of monthly earnings between the national minimum wage and 5 times the national average wage.

Self-employed person: 14.5% of monthly earnings between the national minimum wage and 5 times the national average wage.

Employer: 9% of monthly payroll.

The maximum earnings used to calculate contributions for insured persons who joined the scheme after the 2010 law was implemented is 5 times the national average wage or 5,000 dinars.

Government: Any deficit.

Qualifying conditions

Old-age pension: Age 60 (men) or age 55 (women) with at least 15 years of coverage, including 7 years of paid contributions (excluding purchased contributions for uncovered employment periods).

An insured person with a minimum number of months of coverage at the normal retirement age may continue to contribute up to age 65 (men) or age 60 (women) to either meet the qualifying conditions for, or increase the value of, the old-age pension.

Dependent's supplement: Eligible dependents are a dependent wife; a dependent husband with a disability; a son up to age 23 or disabled; an unmarried dependent daughter; and dependent parents, brothers, and sisters.

Early pension (for those covered before June 10, 2009): Age 50 (men and women) with at least 25 years (men) or 22 years (women) of contributions.

Early pension for hazardous occupations: Age 45 with at least 18 years (men) or 15 years (women) of contributions.

Early pensions are also paid to certain groups before age 50, depending on the insured's age on January 1, 2011, and the insured's gender and contribution period.

Benefits are payable abroad.

Disability pension: The insured must be assessed with a total or partial incapacity for work and have at least 60 months of contributions, including 36 consecutive months.

The Central Medical Committee and Appeals Medical Committee assess the degree of disability.

Benefits are payable abroad.

Survivor pension: The deceased had at least 24 months of contributions, including 6 consecutive months. If more than one survivor is eligible, the pension is split between survivors according to a schedule in law.

Eligible survivors include a widow; a disabled widower; the insured's male children up to age 23; all dependent daughters if unmarried, widowed, or divorced; dependent brothers younger than age 18; dependent sisters; parents; and an unborn child.

The pension for a widow, daughter, or sister is suspended on marriage, but is resumed if she is subsequently widowed or divorced.

Benefits are payable abroad.

Funeral grant: Paid for the death of an insured person.

Cash benefits for insured workers (except permanent disability)

Old-age pension: 2.5% of the insured's average monthly earnings in the last 2 years multiplied by the number of years of contributions is paid.

The maximum pension is 75% of the insured's average monthly earnings in the last 2 years.

Dependent's supplement: The pension is increased by 10% for the first dependent and 5% each for the second and third, up to 20% of the pension.

Early pension: The pension is reduced proportionally and is based on the last 60 months of contributions and the insured personrsquo;s age at application.

If an insured person is not entitled to an old-age pension at retirement age, a lump sum is paid of 10% of the insured's average annual earnings for each year of contributions for less than 10 years of contributions; 12% of the insured's average annual earnings for each year of contributions for 10 to 18 years of contributions; or 15% of the insured's average annual earnings for each year of contributions for more than 18 years of contributions.

Lump-sum benefits can also be paid in certain other cases as determined by the Board of Directors of the Social Security Corporation.

All newly awarded pension benefits are increased by 40 dinars, except for the early pension, which is increased at the normal retirement age.

Benefit adjustment: Pensions are indexed in March every year to inflation or the annual growth in the national average wage, whichever is lower, but may not increase more than 20 dinars. Early pensioners are not eligible for an adjustment until the normal retirement age.

Permanent disability benefits for insured workers

Disability pension: 50% of the insured's average monthly earnings in the last 36 months is paid for the first 1,500 dinars of earnings, plus 30% of the amount above 1,500 dinars.

The pension is increased by 0.5% for each full year of contributions if the insured has 60 months to 119 months of contributions; by 1% for each full year of contributions if the insured has at least 120 months of contributions.

Constant-attendance allowance: 25% of the pension is paid.

All newly awarded pension benefits are increased by 40 dinars.

There is no maximum pension.

Benefit adjustment: Pensions are indexed in March every year to inflation or the annual growth in the national average wage, whichever is lower, but may not increase more than 20 dinars.

Survivors benefits for dependents

Survivor pension: 50% of the insured's average monthly earnings in the last year of contributions is paid for the first 1,500 dinars of earnings, plus 30% of the amount above 1,500 dinars; or 100% of the insured's pension if the deceased was a pensioner.

The pension is increased by 0.5% for each full year of contributions if the deceased had 60 to 119 months of contributions; by 1% for each full year of contributions if the deceased had at least 120 months of contributions.

All newly awarded pension benefits are increased by 40 dinars.

Benefit adjustment: Pensions are indexed in March every year to inflation or the annual growth in the national average wage, whichever is lower, but may not increase more than 20 dinars.

Funeral grant: 500 dinars is paid.

Administrative organization


Social Security Corporation (http://www.ssc.gov.jo) administers the program.

Social Security Corporation
Amman 11110,
PO Box 926031,
Amman,
Jordan

Tel.: +(962-6) 550 1880
Fax: +(962-6) 550 1901

 


The ILO Social Security Inquiry
 

More facts and figures
 
Access to original data by scheme
Coverage indicators (national)
  • Proportion of the working age population contributing to a pension scheme | Data | Graph
  • Proportion of the economically active population contributing to a pension scheme | More  | Graph
  • Proportion of the elderly above retirement age receiving an old age pension | More | Graph
Statistcs from the Social security corporation
  • 75.4% of total active insured persons for 2009 are males
  • The ratio of Jordanian female insured persons to total Jordanian insured persons for 2009 was 25.4%, while the ratio of non-Jordanian female insured persons to total insured persons of non-Jordanians was 18.6%.
  • Voluntary coverage: in 2009, the percentage of voluntary insured persons in 2009 has increased to become 4.9% of total active insured persons, after it was 4.7% in 2008.
  • 48.2% of total active insured persons were from the private sector, 44.6% were from the public sector, and the remaining 7.2% was distributed between other sectors.
  • The number of the social security pensioners has increased from 110 thousand during 2008 to 118
    thousand during 2009. The Jordanians represnted 97.7% of all pensioners in 2009 and male pensioners were about 87.6% of total pensioners.
  • The proportion of early retirement pensioners was 51.8% of the total old age pensioners (84.7% are male pensioners)

Source: SSC Annual Report 2009

Links

Institutions
  • Social Security Corporation | More
  • Ministry of Finance | More

Laws
  • Temporary social security law No. 7 | More
  • Previous law Social Security Law No. 19 | More

Statitical resources
  • ILO Social security Inquiry | More
  • Social security corporation statistics | More
  • Pension schemes managed by the Ministry of Finances | More

Links

Institutions
  • Social Security Corporation | More
  • Ministry of Finance | More

Laws
  • Temporary social security law No. 7 | More
  • Previous law Social Security Law No. 19 | More

Statitical resources
  • ILO Social security Inquiry | More
  • Social security corporation statistics | More
  • Pension schemes managed by the Ministry of Finances | More