December 31 warning for those planning early retirement: Borrowing costs to rise in January

The year-end has become critical for those looking to complete missing premium days for retirement through service borrowing. The new minimum wage that will take effect in January will directly impact maternity, military service, and international service borrowing, as well as Bağ-Kur reinstatement amounts.

Insured individuals who wish to benefit from the current tariff must submit their applications by December 31. Submitting the application before the year ends is considered sufficient to process the transaction at the current, non-increased rate; there is no requirement for the payment to be completed by the same date.

HOW WILL BORROWING COSTS CHANGE?

The lowest payment for maternity borrowing is calculated based on 32 percent of the gross minimum wage at the time of application. Under the current table, the minimum cost for 1 month of maternity borrowing is 10,569 Turkish liras and 60 kuruş, while 24 months of borrowing stands at 253,670 Turkish liras and 40 kuruş.

If the minimum wage is increased by 28.4 percent, the cost of 2 years of maternity borrowing will rise to 325,712 Turkish liras and 79 kuruş. In this scenario, the difference will amount to approximately 72,000 Turkish liras. If the increase is 30 percent, the cost will rise to 329,771 Turkish liras and 52 kuruş, and if it is 35 percent, it will climb to 342,455 Turkish liras and 4 kuruş.

The rates are higher for military service and international service borrowing. For these items, the premium amount is determined based on 45 percent of the gross minimum wage. Currently, the lowest daily borrowing amount is applied as 495 Turkish liras and 45 kuruş, and the monthly amount as 14,863 Turkish liras and 50 kuruş.

18 months of military service borrowing is currently at the level of 267,543 Turkish liras. In the scenario of a 28.4 percent increase in the minimum wage, it is calculated that this amount will rise to 343,525 Turkish liras and 21 kuruş. Thus, an additional cost of approximately 76,000 Turkish liras will arise. With a 30 percent increase, the payment will reach 347,805 Turkish liras and 90 kuruş, and with a 35 percent increase, it will reach 361,183 Turkish liras and 5 kuruş.

Payment periods after application vary according to the type of borrowing. For military service and maternity borrowing, the accrued amount must be paid within 1 month from the date of notification. For international service borrowing and Bağ-Kur reinstatement, a 3-month period is granted for payment.

There are also differences in practice between service borrowing and Bağ-Kur reinstatement. While service borrowing allows for borrowing only the number of days needed, Bağ-Kur reinstatement requires the entire suspended period to be reinstated; partial payment is not accepted.

Furthermore, those who perform service borrowing and make the payment can receive a refund of the amount paid without interest if they withdraw before their retirement pension is granted. In the case of Bağ-Kur reinstatement, the transaction cannot be canceled once the payment is completed, and no premium refund is made.

News Source: 12punto