Updated by Kenichi Hirose on 28.05.2015
Social protection system in Albania had to undergo great changes during the transition period in 1990s as a result of growing social problems such as unemployment and poverty. The establishment of the Ministry of Labour (MoL) in 1992 brought about social protection reform including remodeling of the existing social insurance system, establishment of social assistance, introduction of unemployment benefits and employment services as well as establishment of a health care insurance system. Along with that there were established such institutions as the Social Insurance Institute (SII, 1992), the Health Insurance Institute (HII), the Labour Inspectorate (1995) and the National Employment Service (1995).
After 2000, the social protection approach started to change from social assistance to social insurance mainly based on (a) a contributory social insurance scheme; and (b) tax-funded social assistance and labour market programmes. However, the capacities in the field of managing social protection and the quality of services provided still require improvements and developments to be made. In 2006, the Albanian Government ratified the ILO Social Security (Minimum Standards) Convention, 1952 (No. 102) with respect to old age, death, sickness, maternity, disability, employment injury and occupational diseases, unemployment and health care branches.
Social security benefits in Albania are provided by the Social Insurance Institute (SII), an independent public institution, whose organization and operation is regulated by Administrative Council and Director General. Administrative Council of SII consists of 12 members, of which: 6 members are representatives of the Government and 6 members are representatives of trade unions and employers. All social security contributions and benefits are tax exempt.
Health care in Albania has gone through numerous reforms since 1990-s and resulted in the implementation of a mandatory health insurance coverage. These changes have been achieved in coordination with a national strategy for health reform by the Government, the Ministry of Health (MOH), and other health sector institutions.
There is no specific family benefit, or programme on child welfare in Albania. There are some supplementary compensation to pensions and unemployment benefits for dependent children /family members, financed from the state budget. The social, economic and demographic situation inflicts an increasing need to introduce new social protection schemes for families and children.
The pension system of Albania has seen major changes during the period from 1991-2013. Among those changes are the inclusion of such social categories as private employment and self-employment under the pension system, approval of the legislation on the occupational pension schemes, linking social protection to contributions rather than employment status and establishing voluntary pillar of the pension system.
Only a small portion of the unemployed is eligible for unemployment insurance benefits because that the current system provides benefits only for those who have paid social contributions during their last year of employment. The high level of economic activities in the informal sector means that the portion of benefits is small.
Social assistance in Albania includes three cash social assistance programmes and a programme of social care services. The cash social assistance programmes are: (1) a targeted poverty benefit in cash (called ndihma ekonomike or economic aid); (2) a regular monthly allowance to those with disabilities that are congenital or acquired while children or students; and (3) price compensation paid to pensioners and their families. These programmes are delivered by the social assistance sections in municipalities and communes and monitored and evaluated by the State Social Services at the national level. More >