The long-awaited premium debt restructuring law has come into effect. In this context, the Social Security Institution (SGK) issued guidance explaining how premium debts will be restructured. The released circular clarifies which debts are covered, where they should be paid, and how the restructuring process will work.
Social Security Institution Issues Circular
The Social Security Institution published a circular following Law No. 7256 on restructuring. The circular provides the official details on how premium debts will be restructured. Those who wish to apply for restructuring can base their applications on the points outlined. According to the announcement, premium debts, like tax debts, will be eligible for restructuring provided applications are submitted by December 31, 2020.
Repayments may be made either in a single upfront payment or in equal installments of 6, 9, 12, or 18 months. Applicants will be able to choose either immediate or installment payment at the time of application; this payment method can be changed until March 1, 2021. Those who initially opt for a lump-sum payment may switch to installment payments by the specified date to benefit from the installment option.
Payment Terms Defined
For those who apply for restructuring, the full principal amounts will remain collectible; in other words, principal debts are not written off. Instead of ordinary default interest or penalty fees, calculations will be based on inflation differentials. For those paying in installments, an annual interest rate between 4.5% and 15% will be applied to the calculated amount. If the principal is paid in full in February, 90% of the inflation difference will be waived, leaving only 10% to be collected.
If the principal is paid in two installments in February and April, half of the inflation difference will be waived. After applications are submitted, payment schedules prepared by SGK will be delivered to applicants against signature. Payments can be made through bank channels. In addition, payments via credit or debit card through the E-SGK system will be available; these transactions require logging into the system using e-Government credentials.
How to Apply and Where to Pay Debts
Applications for SGK debt restructuring will be accepted until December 31, 2020. Applications can be submitted in person to the relevant unit, by postal mail, or via the e-Government portal. Applications can also be made through the e-insurance (e-sigorta) system until December 31, 2020. For applications sent by post, the application date will be considered the date the application letter was handed over to the post/cargo service. Due to possible postal delays, applicants are advised to avoid postal submissions except in necessary circumstances.
Premium debts for those employed under 4A (employees) should be applied for through the e-insurance system. This restructuring covers debts such as unemployment insurance premiums, social security support premiums, administrative fines, stamp taxes, and special transaction taxes. Postal applications will also be accepted.
For 4B (Bağ-Kur) debts, applications can be made via the e-Government portal. Alternatively, applicants can fill out the application form available on SGK’s official website and deliver it in person or by post. Persons who have overpaid or been paid in error for temporary incapacity benefits or pensions may apply for restructuring at the social security center in their province. Those covered under 4C should apply in person or by post to the Retirement Services Department Directorate located at Mithatpaşa Caddesi No:7 Sıhhiye/Ankara.
How to Submit an SGK Restructuring Application
Applications for Social Security Institution restructuring continued throughout 2020. If debts are eligible for restructuring under the law, citizens may apply to restructure them. The accepted application methods are:
- In-person application
- Application by post
- Online application
What Does SGK Debt Restructuring Cover?
SGK debt restructuring provides payment relief for a wide range of SGK-related debts. The restructuring covers:
- Special transaction tax debts
- Premium debts of lawyers, notaries, and athletes
- Educational contribution fees and late payment debts
- General Health Insurance premium debts
- Unpaid Bağ-Kur (social security for self-employed) premiums
- Contributions and debts under the Retirement Fund
- SGK support premium debts for retirees
- Premium debts required from agricultural insured persons
- Obligatory payments defined under SGK legislation
- Administrative fines imposed under SGK
How to Check SGK Debts
SGK debt queries can be performed online. To check debts, it is sufficient to log in to the e-Government system. Steps to query SGK debts:
- Log in with your Turkish ID number and e-Government password. Citizens who do not have an e-Government password can obtain one from any PTT branch.
- After logging in, click on the “Social Security Institution” section on the left side of the page.
- From that section, SGK debt inquiries can be performed.
- Debts found in the inquiry can also be paid from the same area.
How to Pay Bağ-Kur Premium Debts via SGK Online Collection
Debts to the Social Security Institution can be paid through the online collection system.
To pay Bağ-Kur premium debts:
- Begin by accessing SGK’s online collection portal. After opening the portal, complete identity verification via the e-Government authentication page.
- Once authenticated, enter the required information on the SGK collection page such as query type and registration number.
- After identity verification, select the “4B insured collection” option on the query page to view and pay Bağ-Kur premiums.
Where to Pay Restructured SGK Debts
Restructured SGK premium debts can be paid online or through partner banks. Payments are accepted via mobile or online banking systems and at PTT ATMs.
To make a payment:
- Log in to the e-Government system and access the SGK debt payment page.
- Select the collection option for restructured SGK debts.
- Choose the appropriate query type.
- Pension Fund (4C) administrative fine restructuring debts, 4C service-based restructured premium debts, and restructured general health insurance premiums can all be paid from the same page.
How to Restructure Debts Online
Citizens who prefer to restructure tax debts without visiting a tax office can follow the steps below to complete their restructuring online.
- To start a restructuring application, first visit the Revenue Administration’s website and log in with your user credentials.
- After logging in, access the main screen.
- From the left-side menu select Restructuring Transactions > 7256 Restructuring Application Form to open the application form.
- Enter the required information in the form displaying all your debts and submit your application.