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LAW OF THE AZERBAIJAN REPUBLIC

of June 17, 1992 No. 174

About indexation of cash incomes and savings of citizens in the Azerbaijan Republic

(as amended on 23-04-2021)

This Law establishes organization-legal bases of indexation of cash incomes and savings of citizens in the Azerbaijan Republic in connection with increase in prices for consumer goods and rates for paid services (further - consumer prices).

Article 1. Essence and purpose of indexation

Indexation - the mechanism of increase in cash incomes and savings of citizens established by the state for the purpose of protection of purchasing power of the population in connection with growth of consumer prices of the territories of the Azerbaijan Republic.

Article 2. Basis and procedure for indexation

Basis of indexation of cash incomes and savings of citizens is the consumer price index. The consumer price index in the Azerbaijan Republic is estimated according to the basket of the minimum consumption accepted for calculation of subsistence minimum of the population based on the statistical data obtained as a result of observations of the change in price in the state, cooperative and private trade and also rates of paid services on all objects of service industry irrespective of patterns of ownership.

Observations of change of consumer prices are performed by the special public service operating as a part of statistical bodies of the republic.

Information on consumer price index and change of growth of cash incomes (compensation, pensions, benefits, grants), and also the minimum level of compensation established in the Azerbaijan Republic and other basic data necessary for indexation are published quarterly in seal.

Indexation is performed if the consumer price index estimated in the accruing result from the moment of the previous indexation will exceed 5 percent threshold.

Article 3. Subjects to indexation

Indexations are subject:

compensation of employees of the companies, organizations and organizations (further - the companies);

national pensions, grants, social benefits (to families with children, in connection with staff reduction, temporary disability, pregnancy and others), except one-time;

deposits of citizens of the republic in Savings bank of the Azerbaijan Republic;

state loans of the Azerbaijan Republic and other government securities of the Azerbaijan Republic, fees in bodies of national insurance of the Azerbaijan Republic;

alimony.

According to this Law indexations and the income of those who are busy under the terms of the agreement or membership on acting on the basis of private property, individual work and all other forms of entrepreneurship, and also on the basis of individual (group) lease, the companies and in cooperatives can be subject, and it is equal in individual peasant economy. Conditions of income indexation of specified persons are determined in the agreements signed by them with the owner (board).

Indexation does not extend to the income of citizens from business activity and property.

Article 4. Indexation of cash incomes

Cash incomes of citizens in payment type of work and benefits are subject to indexation in the following procedure:

within the minimum monthly payment of work - 100 percent of consumer price index;

from 1 to 2 sizes of the minimum monthly payment of work - 80 percent of consumer price index;

from 2 to 3 sizes of the minimum monthly payment of work - 60 percent of consumer price index;

from 3 to 4 sizes of the minimum monthly payment of work - 40 percent of consumer price index.

Cash incomes over the quadruple size of the minimum monthly payment of work of indexation are not subject.

In regions where apply coefficients for payment of work (for work in the mountain area and in other areas) the minimum level of compensation for indexation is determined taking into account these coefficients.

Indexation of cash incomes is made in the place of their obtaining.

The indexed income is paid, since next month.

Pension amount and social benefits are indexed according to the legislation.

After calendar year the benefits amount in connection with indexation is included the corresponding tariff charges and official pay rates and benefits.

Indexation of the alimony withheld by a court decision in firm sum of money is established by administration of the organization holding the alimony, in proportion to increase in the sum of the determined minimum wage.

Article 5. Indexation of cash savings

Indexation of cash savings is made by the relevant organization of the state financial credit system once a year when charging deposit interests according to the procedure established by the Cabinet of Ministers of the Azerbaijan Republic.

The procedure for indexation of state loans and other government securities of the Azerbaijan Republic is established by legal acts of the Azerbaijan Republic.

Indexation of insurance payments is made once a year according to the procedure, established by the Cabinet of Ministers of the Azerbaijan Republic.

Article 6. Indexation sources

Indexation of cash incomes and savings of the population is performed at the expense of sources from which the corresponding payments are made.

The specified sources of means are:

for indexation of compensation of employees of state-financed enterprises (organizations of medicine, educational, scientific, cultural institutions and others) and benefits - assignments from the relevant budgets;

for indexation of compensation of employees of the companies selling products (services) in the state regulated prices and rates, in case of lack of funds for compensation owing to circumstances, - budgetary funds according to the procedure, determined by the Cabinet of Ministers of the Azerbaijan Republic;

for indexation of compensation of employees of the companies which are independently determining the prices of the goods made by them and the rendered services, public organizations (associations) and their companies - own means of the companies and organizations;

for indexation of work pensions - the means determined by the Law of the Azerbaijan Republic "About work pensions";

for indexation of social benefits - means of the government budget and means of compulsory national social insurance;

It is excluded according to the Law of the Azerbaijan Republic of 24.04.2018 No. 1086-VQD

for indexation of the state grants - assignments from the relevant budgets;

for indexation of savings of citizens in Savings bank of the Azerbaijan Republic - the income of bank;

for income indexation on government securities and state loans of the Azerbaijan Republic - assignments from the government budget of the Azerbaijan Republic;

for indexation of fees in bodies of national insurance of the Azerbaijan Republic - the income of Public administration of insurance upon increase in interest rates for the means placed at the expense of these fees.

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