A study of social security system in the Republic of Armenia

Abstract

Social security payments in Armenia are the main source for the pension fund. Thus, if there are some inappropriate actions or measures taken by the payer, the whole system will be not at all effective and even destructive for the whole system. On the other hand we can estimate that there are some infringements, which are very common for Armenia. Among them we would like to emphasize such violations as the misreporting of the amount of the salaries and also of the number of the employees, extra-legal inspections and audits, extra-legal prepayment demands, corruption in the system of the administration of social security payments, high number of migration, which made the number of workers less and less; appearance and development of so called shadow economy made almost impossible to use the whole power of the economy and to collect the proper amount of money. The topic of this Master Essay is The Study of the Social Security System in Armenia. So, the purpose of the study is to give the overview of Social Security System in Armenia, how it works, to show main causes of weaknesses of the system and to try to give some recommendations and suggestions for the improvement of the system and its further development. The Essay puts an emphasis on the small businesses in Armenia, recognizing their role for the formation and development of liberal economies, by creating independent and self-sufficient class of entrepreneurs as well as new jobs, enlarging internal market, enhancing the competitiveness among local goods and services in external market and increasing export potential. The essay will find out the activities of small businesses concerning the social security payments, their attitude towards the system as a whole.