Working after retirement is not prohibited by law. However, retired people who start a registered job may see their pension suspended in certain situations. Although it is legally possible to work after securing retirement rights, the pension can be stopped in some cases. When a retiree begins employment, the employer must report this to the Social Security Institution (SGK) as “Workers subject to the Social Security Support Contribution”. If the employment is reported incorrectly, pensions may be suspended. On the other hand, if a retiree starts their own business or becomes a partner in a company, their pension is not cut.
What Should a Person Do If Their Pension Is Stopped Due to Returning to Work?
Employees whose pensions have been suspended must inform their payroll/accounting department or SGK immediately. Under SGK regulations, when a retired person becomes insured again, pension payments or Social Security Support Contribution (SSDP) deductions should not be applied if the employment is reported correctly. If the employer or company accountant reports the retiree as “subject to all social insurance branches” rather than “subject to SSDP”, the pension may be suspended. Affected retirees can restore their pension by correcting this reporting error. Employers are given 10 business days to correct the mistake. If the correction has not been made online by the end of that period, the retiree should submit a written petition to the local Social Security Center or the Provincial Directorate of Social Security. After the employer corrects the report, the retiree’s pension will be reinstated for those who retain the legal right to work after retirement.
Does a Retiree’s Pension Increase If They Return to Work?
Working after retirement does not cause an immediate increase in the pension amount. SSK and Bağ-Kur retirees receive statutory increases twice a year, in July and January, based on inflation and government-determined rates. Returning to insured work does not create an extra increase to the pension beyond these scheduled adjustments. Retirees who become employed should ask their employer to use entrance code 2 when registering them. No other special action is required by the retiree.
Is Working After Retirement Prohibited?
Starting a job after retirement is legally permitted. Retirees who need additional income or wish to continue working may take on insured employment. Under current law, pension payments are not suspended simply because a retiree returns to work. However, employers who employ retirees without registering them for insurance may face administrative fines. The retiree is not fined for working without formal insurance, but employing uninsured workers is illegal and punishable. Employing staff under correct insurance status is a legal obligation for all employers.
- Retirees who return to work are subject to the Social Security Support Contribution where applicable.
- If a Bağ-Kur retiree returns to work under Bağ-Kur, a deduction of around 13% may be applied to their pension in some cases.
Are Social Security Support Contributions Deducted from the Pension of Those Who Work After Retirement?
Deductions from pensions for those who work after retirement were removed with the omnibus law changes in 2019. Accordingly, pensions of retirees who take on registered employment are generally not reduced. A retiree who opens a business or becomes a company partner must register for insurance and pay the required contributions. If a retiree works under SSK coverage, they must be insured accordingly. Rules and consequences, however, vary by the type of retirement:
- Disability retirement
- Retirement with disability allowance
- Normal retirement
If a person retired due to disability or received retirement through an official disability allowance and then returns to work, their pension may be fully suspended. Those forms of retirement are granted because the individual was assessed as unable to work; therefore, resuming employment can result in the loss of those retirement benefits, even if no administrative fine is imposed.
If a Disability Retiree Returns to Work, Is Their Pension Cut?
If a disability retiree starts working again, their pension is subject to suspension. Disability retirees have a certified work incapacity of 40% or more. The state grants disability retirement based on this incapacity. If the person begins working and is insured as an employee, their disability pension will be stopped. Working without registering the insurance is illegal and brings penalties for both the individual and the employer. In summary:
- If a person who was granted disability retirement works as an insured employee, their pension is suspended.
- If someone who retired early due to an impairment or disability allowance returns to work, their pension is likewise suspended.
Do Retirees Who Return as Tradespeople Have Their Pensions Cut?
Working after retirement as a Bağ-Kur insured tradesperson is legally allowed. However, retirees from Bağ-Kur, SSK, or the Civil Servants’ Pension Fund who open their own business or work as tradespeople must continue to pay the Social Security Support Contribution (SGDP) to Bağ-Kur. Additionally:
- Self-employed individuals who are registered taxpayers,
- Partners in limited liability companies,
- Founding partners of joint-stock companies,
- Board members of companies
Generally face a pension deduction of roughly 10% from their Bağ-Kur retirement payments for SGDP obligations.
Can a Retired Civil Servant Work Again?
Re-employment of retired civil servants is possible only in exceptional institutions and organizations. Retired civil servants may be rehired by specific public entities, including:
- Municipalities,
- Provincial special administrations,
- Enterprises established by municipalities and provincial administrations,
- Capital Markets Board,
- Competition Authority,
- Radio and Television Supreme Council (RTÜK),
- Public Procurement Authority,
- State economic enterprises,
- Publicly owned partnerships
Retired civil servants may not be employed outside these listed areas; otherwise, their pensions may be suspended.
Can Retirees Receive Severance Pay?
Retirees can be entitled to severance pay. Retirees who take on insured employment are eligible for severance pay regardless of which system they originally retired from. If the employer terminates the employment contract of a retired employee who works as an insured worker, the retiree can claim severance pay. However, if a retiree resigns voluntarily, they are not generally entitled to severance pay. Other employment rights for retirees include:
- Annual leave,
- Overtime pay,
- Severance and notice pay rights
If a retiree is dismissed due to mobbing or unlawful treatment, they may seek remedy before the Labor Court to pursue their rights.
Second Severance Pay After Retirement
A second severance payment is not automatically granted solely because someone is retired. For a retiree who returns to insured employment to be eligible for a second severance payment, the following conditions generally apply:
- The retiree must have worked at the same workplace for at least one year after re-employment.
- The employment must have been terminated by the employer for reasons other than discipline or moral misconduct.
- If the retiree is not paid wages or is forced to resign, they may pursue severance pay by asserting their legal rights.
- Retirees who develop an occupational disease may still be eligible for severance even if they end their contract by resignation.
These rules ensure that retirees who return to work maintain important labor rights while also clarifying the conditions under which pensions may be affected by re-employment.