Amman — The return of early retirees to the labor market presents a complex equation involving the need to improve income, the right to continue working and being productive, and compliance with Social Security regulations governing the combination of pension payments and employment wages.
While employers seek to benefit from retirees’ accumulated experience, some early retirees face financial pressures that lead them to accept jobs without insurance coverage, potentially exposing them to legal violations and financial consequences.
Legal responsibility is shared between employers that hire early retirees without disclosing their return to work and retirees who may be required to repay pension benefits they received without entitlement, in addition to applicable fines and contributions.
At the same time, questions are being raised about whether the conditions governing the combination of pension benefits and employment wages are suited to current living conditions, particularly amid rising family expenses and low incomes among some retirees.
The issue has renewed calls to review legislation in a way that balances protecting Social Security funds and ensuring the sustainability of the system with enabling retirees to legally return to work while preserving their rights.
It also highlights the importance of limiting involuntary early retirement and establishing more flexible rules that encourage disclosure and insurance compliance, rather than pushing workers and employers toward unregulated employment. Such measures would strengthen economic and social stability while preserving retirees’ dignity.
Preventing Insurance Evasion
Social insurance and social protection expert Musa Al-Sbeihi said the Social Security Law requires employers and early retirees to disclose any return to work in order to prevent insurance evasion, ensure workers are covered under the law and provide them with insurance protection.
He said the law imposes financial consequences on employers that hire early retirees without notifying the Social Security Corporation and without bringing them under its coverage, if they return to work before reaching the age of 60 for men and 55 for women.
The violating employer is required to pay a fine equivalent to 30% of the total wages paid to the retiree throughout the period of employment. It must also retroactively enroll the retiree in Social Security from the date they started work and pay the outstanding contributions, interest and applicable penalties.
Al-Sbeihi said financial responsibility does not rest solely with the employer. It can also extend to the early retiree if they return to work without disclosing it to Social Security. In such cases, the retiree may be required to repay pension benefits received without entitlement during the employment period if the conditions for combining the pension with employment income were not met.
If the retiree meets the conditions for combining part of the pension with wages from the new job, they are required to repay the portion of the pension that cannot legally be combined with the employment income, in addition to fines prescribed under regulations issued pursuant to the law.
He stressed the importance of employers and retirees complying with disclosure and notification requirements when returning to work, in order to avoid additional financial obligations and ensure continued application of Social Security provisions and insurance protection for workers.
Improving Income
Hamadeh Abu Najma, head of the Workers’ House, said the return of early retirees to the labor market is driven by economic and social factors. Some seek to improve their income and their families’ living standards, while others want to remain productive and make use of their accumulated experience and skills, creating a mutual benefit for both retirees and employers.
He said the problem arises when some early retirees are employed without disclosing the employment relationship or bringing them under Social Security coverage. This constitutes a violation of the law and deprives retirees of the insurance protection associated with their new employment.
Many early retirees, he added, did not choose retirement voluntarily but were forced into it as a result of termination of employment or a lack of suitable job opportunities. They may consequently find themselves relying on low pensions that are insufficient to meet basic needs and family obligations, pushing them to seek new employment even at low wages or without Social Security coverage.
Abu Najma explained that the Social Security Law allows early retirees to return to work and combine employment income with a percentage of their pension under certain conditions. These include the passage of 24 months from eligibility for early retirement, not returning to an employer where they worked during the last 36 contribution months before retirement, and re-enrollment in Social Security.
The percentage of the pension that can be combined with employment income ranges from 45% to 85% of the basic pension, depending on the applicable conditions. Pension payments are suspended when a retiree returns to Social Security-covered employment if the conditions for combining the two sources of income are not met.
He stressed that addressing the issue requires reviewing the conditions governing the combination of pension benefits and employment income, particularly the two-year waiting period following eligibility for early retirement and whether the permitted combination rates adequately reflect retirees’ living conditions.
He warned that some of these requirements could encourage retirees and employers not to disclose employment relationships rather than encouraging compliance with the law.
He called for a balance between protecting Social Security funds, reducing insurance evasion and enabling early retirees—particularly those receiving low pensions—to legally return to the labor market while preserving their insurance rights and improving their incomes.
He also called for reducing involuntary early retirement practices adopted by institutions in both the public and private sectors and addressing the reasons for terminating employees before reaching retirement age.
Early retirement, he stressed, should not become a period of economic instability that forces retirees to accept any available job, regardless of how low the wages are or whether social protection is provided.
Human and Legal Dimensions
Ahmed Awad, director of the Phoenix Center for Economic and Informatics Studies, said the return of early retirees to the labor market involves overlapping human, professional and legal dimensions, requiring a comprehensive approach that takes into account the economic and social circumstances of individuals and families, labor-market needs and the sustainability requirements of the Social Security system.
He said Social Security has the right to ensure compliance with the law and protect contributors’ funds. However, this should be accompanied by an assessment of whether legislation governing the employment of early retirees is suited to current economic and social realities, while distinguishing between deliberate attempts to circumvent the law and cases in which retirees are forced to return to work to meet their basic needs.
Low pension benefits among some groups, combined with the growing gap between pensions and living costs, are pushing retirees to seek additional sources of income, Awad said. This makes returning to work an economic necessity for maintaining an acceptable standard of living for their families, rather than necessarily an attempt to circumvent the law.
He noted that early retirees possess professional experience and accumulated knowledge gained over many years of employment. Employers can benefit from these skills to improve performance, train workers and transfer knowledge, making it in the interest of retirees, employers and the national economy to provide them with opportunities to work legally.
Awad stressed the need to review the Social Security Law provisions governing the employment of early retirees, including waiting periods, the percentages of pension benefits that can be combined with employment wages, and penalties imposed for violations.
He also called for studying the possibility of expanding opportunities to combine pension benefits and employment income, particularly for retirees receiving low pensions or those whose employment was terminated against their wishes.
He emphasized the importance of providing fair and graduated settlements for violations that take into account their nature and the circumstances that led to them, rather than applying the same approach to all cases.
Such measures, he said, would increase the chances of correcting violations and encourage employers and retirees to disclose employment relationships and pay the required contributions.
He also stressed that clearer and more flexible legislative rules could help reduce unregulated employment, strengthen insurance protection for retirees and reduce the risk of exploiting their financial needs by employing them at low wages or without insurance rights.
He concluded that developing legislation governing the issue should be based on an assessment of its financial and social impacts, striking a balance between the sustainability of the Social Security Corporation and retirees’ right to work and secure sufficient income for their families, while contributing to decent employment opportunities that protect dignity and promote economic and social stability.
Source: Al-Ghad
