Measures to strengthen the Social Security System to continue in the coming period

In line with the reform program of President Ilham Aliyev, the state and consolidated budgets will retain their social focus in 2027. In accordance with the instruction of the Head of State, the necessary financial provisions for the sixth social reform package have been incorporated into the 2027 state and consolidated budgets.

This was stated by Anar Aliyev, Minister of Labor and Social Protection of the Population, during the first-reading discussion of the draft law “On the State Budget of the Republic of Azerbaijan for 2027” at a joint meeting of the Milli Majlis committees on Natural Resources, Energy and Ecology; Labor and Social Policy; Healthcare; and International Relations and Interparliamentary Relations.

Noting that another significant increase in salaries and social payments had been recorded this year, the Minister said that the average monthly pension had risen by 10.4% compared to the corresponding period last year, reaching AZN 596. The average old-age pension had increased by 10% to AZN 634, while the average monthly salary had grown by 7.2% to AZN 1,173. Payments of benefits, pensions and targeted state social assistance had increased by 8.4%, reaching AZN 1.9 billion.

Overall, the Ministry of Labor and Social Protection of the Population makes monthly payments totaling AZN 900 million to 2.2 million people, representing 22% of the population. Of this amount, AZN 676 million is allocated to pension and social insurance payments, while AZN 214.3 million is allocated to social benefits, presidential allowances and targeted social assistance financed from the state budget.

Anar Aliyev stated that the revenues of the State Social Protection Fund (SSPF) are projected at AZN 9.221 billion for 2027, an increase of AZN 897.4 million, or 10.8%, compared to the approved figure for 2026. He noted that 82.3% of the Fund’s revenues, or AZN 7.587 billion, are expected to come from mandatory state social insurance contributions. This is AZN 995.4 million, or 15.1%, higher than the approved figure for the current year.

The Minister said that the SSPF’s total expenditures for 2027 are projected at AZN 9.273 billion, which is AZN 789.5 million, or 9.3%, higher than the approved expenditures for 2026. Payments to the population will account for 96.5% of total expenditures, or AZN 8.950 billion. This represents an increase of AZN 1.7 billion compared to 2025 and AZN 753.6 million compared to 2026. Next year, the average monthly labor pension is projected to reach AZN 639, while the average old-age pension is expected to reach AZN 680. These amounts are projected to account for 50% and 53% of the average monthly salary, respectively.

Referring to data from the Labor and Employment Subsystem, Anar Aliyev noted that the number of employment contracts nationwide had increased by 1.2% compared to the same period last year. In the private sector, the number of employment contracts had risen by 5.8%, or 59,000. He also highlighted that, according to the Subsystem’s data, the national wage fund had increased by 8.5%.

The Minister stated that the revenues of the Unemployment Insurance Fund for 2027 are projected at AZN 268.9 million, an increase of AZN 30.6 million, or 12.8%, compared to the approved figure for 2026. The Fund’s expenditures for 2027 are projected at AZN 319.2 million, which is AZN 52.8 million, or 19.8%, higher than the approved figure for the current year.

In 2027, 444,000 people are expected to benefit from active employment measures financed by the Unemployment Insurance Fund. These measures are projected to include employment opportunities for 173,000 people, participation in the Self-Employment Program for 14,500 people, vocational training for 18,500 people, and career guidance services for 230,000 people.

In recent years, the coverage of active employment measures has doubled. On an annual basis, the number of people placed in jobs has increased 3.6-fold, participation in the Self-Employment Program has risen 2.7-fold, the number of people enrolled in vocational training has grown 7.1-fold, and the number receiving career guidance services has increased threefold.

Anar Aliyev also noted that the revenues of the Compulsory Health Insurance Fund for 2027 are projected at AZN 2.257 billion, which is AZN 281.2 million, or 14.2%, higher than the approved revenues for 2026. The Fund’s total expenditures for 2027 are projected at AZN 2.980 billion, an increase of AZN 358.7 million, or 13.7%, compared to the approved figure for the current year. Of this amount, AZN 2.565 billion, or 86.1%, is allocated to compulsory health insurance payments to medical institutions and medical personnel salaries.

The expenditures for the coming year also include AZN 185 million for state healthcare programs and initiatives, AZN 105 million for the development and improvement of medical services and the establishment of digital infrastructure, and AZN 59 million for insurance payments to pharmacies for medicines used in outpatient care and for providing medicines to persons with disabilities.

Anar Aliyev further stated that AZN 40 million is allocated to improving the housing and living conditions of families of martyrs and persons with war-related disabilities. More than AZN 30 million is also earmarked for providing vehicles to persons with war-related disabilities and rehabilitation aids to persons with disabilities.