Latest changes to legislation - February ...

Latest changes to legislation - February 2026

On 30 January 2026, the “Rules on the Assignment, Calculation, and Payment of Mandatory State Social Insurance Payments and Allowance Paid at the Expense of the Insurer to Insured persons who have Temporarily Lost their Ability to Work” (the “Rules”) was approved in new edition by the Cabinet of Ministers of the Republic of Azerbaijan.   The Rules entered into force on February 2, 2026.   A summary of the main provisions set out in the Rules is presented below: The Automated Assignment of Allowances The following types of allowances will be automatically assigned where it is possible to obtain the necessary information from the electronic information systems of the competent state authorities via the Electronic Government Information System (“EHIS”):Allowance for temporary loss of working capacity (for the period defined in legislation)Maternity allowanceOne-time childbirth allowanceChildcare allowance for children up to the age of 3One‑time funeral allowance       Calculation of Allowances The Concept of Earnings for the Purpose of Calculation of Allowances Allowances are calculated based on the amount equal to four times the mandatory state social insurance contribution paid (accrued for the relevant period) for the insured person in respect of the four consecutive quarters preceding the month in which the temporary loss of working capacity occurred (the “Earnings”). Calculations to be Performed by Calendar Days, not Working Days The allowance for temporary loss of working capacity shall be granted for the calendar days during which the temporary loss of working capacity occurs. Where an interruption arises within the sickness period which falls on non-working days the temporary loss of working capacity shall be deemed uninterrupted and consecutive.  Updates on the Allowance for Temporary Loss of Working Capacity  Amendment to The Rules for Payment of the Allowance in Respect of a Social Insurance Event Occurring During a Period of Leave The list of cases in which the allowance for temporary loss of capacity for work is not granted has been expanded to include cases where the temporary loss of working capacity occurs during periods of educational leave or creative leave. If the temporary loss of capacity for work continues after periods of unpaid leave, educational and creative leave, or partially paid social leave, the allowance for temporary loss of capacity for work shall be granted in the general manner starting from the day on which the insured person is to commence work.  Grounds for Suspension of Payment of the Allowance Payment of the allowance shall be suspended in the following cases: Until the submission of a relevant report on periods of temporary loss of working capacity, where such report has not been submitted; Until any discrepancies identified in the submitted report are eliminated, where such discrepancies have been detected. The Percentage Criteria for Payment of the Allowance  The calculated temporary disability allowance is paid to insured persons at the rate of 100% of their Earnings. Under the previous rules, the allowance was paid at 60%, 80%, or 100% of earnings. Rules for Calculation of Allowances Based on Income from Primary and Additional Workplaces Where, in addition to the primary workplace, the insured person also derives income from activities related to paid employment at additional workplace(s), the allowance for temporary loss of working capacity shall be calculated and paid by the employers for the first 14 calendar days separately at each workplace based on the Earnings at that workplace. For the remaining days, it shall be calculated and paid by the insurer based on the insured person’s total Earnings. Where, in addition to the primary workplace, the insured person derives income from activities not related to paid employment, the allowance for temporary loss of capacity for work for the first 14 calendar days shall be calculated and paid only by the primary employer.  Calculation Formulas The amount of the allowance for temporary loss of working capacity is calculated by multiplying the number of calendar days within the period of temporary loss of working capacity by the amount of the average Earnings per calendar day. MM = TGS x OQM where:MM – the amount of the allowance for temporary loss of capacity for workTGS – the number of calendar days within the period of temporary loss of capacity for workOQM – the amount of average Earnings per calendar day The amount of average Earnings per calendar day is determined by dividing the insured person’s total Earnings for the four consecutive quarters preceding the month in which the temporary loss of capacity for work occurred by the number of divisor calendar days for those four consecutive quarters. OQM = ÜQM / BTG where:OQM – the amount of average Earnings per calendar dayÜQM –the insured person’s total Earnings for the four consecutive quarters preceding the month of temporary loss of capacity for workBTG – the number of divisor calendar days for the four consecutive quarters preceding the month of temporary loss of capacity for work The number of divisor calendar days for the four consecutive quarters preceding the month of temporary loss of capacity for work is calculated by subtracting from the total number of calendar days in those four quarters the number of days specified in paragraph 2.13 of these Rules. BTG = ÜTG - ÇTG where:BTG – the number of divisor calendar days for the four consecutive quarters preceding the month of temporary loss of capacity for workÜTG – the total number of calendar days for the four consecutive quarters preceding the month of temporary loss of capacity for workÇTG – the number of days specified in paragraph 2.13 of these Rules for the four consecutive quarters preceding the month of temporary loss of capacity for work. If the insured person had no employment activity during the four consecutive quarters preceding the month in which the temporary loss of working capacity occurred, the amount of average daily Earnings per calendar day shall be determined by dividing the amount of the minimum monthly salary applicable during the period of temporary loss of capacity for work by the number of calendar days in the month in which the temporary loss of working capacity occurred. If, for the period taken into account in calculating the allowance, the employer submits to the State Tax Service a certificate of the absence of activity for the quarter preceding the insurance event, then the allowance is not assigned automatically, the employer and the insured person are sent an electronic notification. Upon the employer’s application confirming the existence of activity during the period in which the insurance event occurred, the matter shall be reconsidered on a general basis.   Update Regarding the Determination of the Limit for the Calculated Allowance Amount In determining the double limit of the allowance payable to the insured person, the calculation shall be made by taking into account the insured person’s aggregate Earnings from both the main and any additional workplace(s).   Updates on the Allowance for Maternity Where the period of maternity leave coincides with annual leave, partially paid social leave, or unpaid leave, the allowance is granted for all calendar days falling within the period of maternity leave.   One‑Time Allowance upon the Birth of a Child: Assignment and Payment For children born after 31 December 2020, the one‑time allowance upon the birth of a child is assigned automatically by the insurer on the basis of data obtained via EHIS from the information system of the Ministry of Justice of the Republic of Azerbaijan regarding the registration of the child’s birth. For children born before 1 January 2021, the one‑time allowance upon the birth of a child is paid by the insurer upon the employer’s application. In this case, there is no limitation period for the application, and the allowance is paid in the amount established by the legislation in force at the time of the child’s birth.  Updates Regarding the Allowance for the Care of a Child up to Three Years of Age The care allowance shall be paid at double rate for all children with disabilities up to the age of 3. Under the previous regulation, a double care allowance was payable only for the children of persons whose disability was related to the Chernobyl accident.  New Application Form The existing form for the employer’s application regarding the assignment of the allowance has been updated. New form is established by Annex No. 1 to the Rules.