About 2 million citizens who will benefit from the EYT (retirement age reclassification) regulation have begun planning their retirements for 2024. Not only those covered by EYT but also other workers can bring their retirement date forward by purchasing service periods through debt repayment (borçlanma).
With the new minimum wage to be set, costs for military service, childbirth and overseas debt repayments will rise as of January 1, 2024. There is a five-week window intended to prevent those who accelerate their retirement by advancing their insurance start date and premium days from being affected by this cost increase.
If the minimum wage increases by 50%, the current fee for a 15-month military service repayment, now 64,386 TL, would rise to 96,579 TL. Those who repay 15 months of military service would therefore pay 32,193 TL less if they complete their repayment before the increase.
Childbirth debt repayment, which can be transacted today for 154,000 TL, would increase to about 205,000 TL in 2024. Individuals who complete their repayments before the change will pay 51,000 TL less. For example, someone who is short two months of service to retire under the EYT rules could close the gap by buying 60 days of premiums. Below we have answered common questions that may arise for those preparing to retire in the new year.
Does the deserved hardship allowance (yıpranma payı) earned during 12 years in public service reduce the retirement age?
For public servants who later worked 1,260 days under SSK, the earned hardship allowance is added to the length of service. However, this allowance does not reduce the statutory retirement age. It is possible to combine contributions paid under different insurance statuses to reach the total required service period for retirement, but the hardship allowance itself does not affect the retirement age.
I own a 2% share in the company I work for. Can I retire under EYT as an SSK-insured employee?
Those who acquired shares while continuing to be insured as employees before 2008 can maintain SSK status and may retire under EYT as SSK-insured. However, those who obtained shares from companies where they worked after 2008 are insured under Bağkur, so they cannot retire as SSK-insured under EYT rules.
What will the severance pay ceiling be in the new year?
Following the July increase that set the gross minimum wage at 13,414 TL, forecasts anticipate a roughly 50% rise in the new year, bringing the gross minimum wage to around 20,000 TL. A worker who has worked 20 years on minimum wage and then retires would currently be entitled to approximately 268,280 TL in severance pay.
If that worker waits until January, their severance could reach 400,000 TL, creating a difference of 131,720 TL. The current severance pay ceiling of 23,490 TL would rise to roughly 35,000 TL under a 50% increase. Employees with higher salaries will also be in a better position if they submit retirement applications in the new year.
If someone who began working before September 1999 needs 55 premium days to retire in the new year, is it better to submit the retirement application and debt repayment request before or after January?
Military service, doctoral studies, legal traineeships, medical specialization periods for men, and childbirth for women are all indexed to the minimum wage for debt repayment calculations. The minimum payable amount for repayment is 32% of the minimum wage, while the maximum is 7.5 times that percentage.
If the minimum wage rises by 50%, the repayment amounts will also increase. Today, the lowest daily repayment amount is 143 TL. With a 50% hike in the minimum wage, the daily repayment will exceed 214 TL. For this reason, it can be advantageous not to delay repayment.
Military Service Repayment Calculator: https://www.ssk.biz.tr/askerlik-borclanmasi-hesaplama/
Additionally, because the increases to be applied in the new year — together with inflation and growth figures — will raise monthly pensions and severance calculations, it may be more advantageous to submit a retirement application effective January 1, 2024 rather than in October, November or December. Those who apply in January may also benefit from the projected 4% growth adjustment.
Does debt repayment affect retirement age, and is there a tax deduction for repaid premiums?
While debt repayment contributes to missing premium days, it does not change the statutory retirement age. Repayment allows those who have reached the required age but lack enough premium days to bring their retirement date forward by filling the shortfall.
Women can count up to six years by repaying for three childbirths. Time spent in basic military, noncommissioned officer, or reserve officer schools can also be used for retirement debt repayment. Military repayment may be made for a period up to the length of the service and can also cover time before starting formal employment. Those who pay social security premiums via debt repayment can apply to their workplaces to request that the repaid contributions be deducted from their income tax.