Unpaid social insurance contributions by Albanian businesses and government institutions have reached 24.3 billion leks ($240 million), according to the High State Audit (KLSH). This growing debt, enough to fund pension increases for several years, raises concerns about compliance and potential impacts on future pension payments.
Debt mounting from businesses and public institutions
Private companies aren’t the only ones failing to pay into social insurance. At least 668 public institutions are also behind, owing about 794 million leks ($8 million) to Albania’s Social Insurance Institute (ISSH), the report says. With thousands of workers affected, unpaid contributions risk access to pensions, maternity leave, and medical coverage.
“Unpaid contributions highlight critical financial gaps that impact both public and private sectors,” KLSH noted in its findings.
Workers at risk amid rising unpaid contributions
Data show that unpaid insurance contributions are rising in both amount and frequency. Large businesses account for 58% of the total debt, while small businesses contribute 38%. Public institutions make up the smallest share, at about 6%.
Around 44,980 active businesses owe a total of 8.5 billion leks ($85 million), which represents nearly half of all unpaid contributions. Without reforms, experts say this trend could challenge the stability of Albania’s social insurance system.
Slow collections add to the problem
The General Directorate of Taxes is responsible for collecting most of these unpaid contributions, totaling 18.4 billion leks ($184 million), but progress has been limited. The ISSH, in charge of collecting 5.8 billion leks ($58 million), struggles to recover funds owed by self-employed workers, especially in agriculture, and from mistakenly issued pensions.
“Swift collection is essential to keeping our social insurance system strong,” said an ISSH official.
Push for stricter enforcement and clearer rules
KLSH has called for stronger enforcement and better coordination between tax authorities and the ISSH to reduce unpaid contributions. Experts recommend clearer regulations and stricter penalties to discourage future defaults.
“The stakes are high for workers whose livelihoods depend on these funds,” KLSH emphasized, “as delayed or missing contributions can affect pensions and critical benefits.”
