Turkey's SGK loses Treasury contribution, faces trillion‑lira deficit

A law passed by the Turkish Grand National Assembly removes the 4% Treasury contribution that funded disability, old‑age and death insurance premiums for the Social Security Institution (SGK) effective August 2026. The contribution had covered about 17% of SGK’s revenue.

TEPAV Centre Director Hakkı Hakan Yılmaz warns that without the state aid SGK could swing from a projected 36 billion‑lira surplus in 2025 to an 853 billion‑lira shortfall, and that the 2026 balance could turn a 200 billion‑lira surplus into a 1.1 trillion‑lira deficit. He estimates that adding the missed 287.9 billion‑lira contribution to the central budget would raise the overall deficit by roughly 1.23 trillion lira. The change raises concerns about the sustainability of Turkey’s pension system amid an aging population, rising health costs and broader macro‑economic uncertainties.