Armenia to scrap AMD 72 thousand annual social package for public sector workers from 2027
Armenia will scrap the annual social package of AMD 72 thousand (about $200) for employees of state bodies and organisations from January 1, 2027. The government draft decision prepared by the Ministry of Labour and Welfare is open for public comment until November 26.
The social package goes to civil servants, staff of schools, libraries, museums, theatres, concert and social care organisations, the Matenadaran manuscript institute, the Yerevan Metro, the Armenian Nuclear Power Plant and a number of other state organisations, as well as holders of the honorary titles of People’s Artist of the USSR and of Armenia. The money is paid monthly into bank accounts, accumulates and can be spent only on set purposes.
According to the justification, the state budget allocated AMD 10.6 billion to the social package in both 2023 and 2024, AMD 11.7 billion in 2025 and AMD 9.6 billion in 2026. The AMD 9.6-11.7 billion a year freed up will go to general budget financing. The funds are distributed among about 58 budget units. According to a BusinessDaily calculation, the AMD 9.6 billion for 2026 equals the annual package for about 133 thousand beneficiaries.
The package was introduced in 2012-2013, when public sector pay was relatively low. The ministry notes that it is not based on social criteria and that there is no clear standard for choosing eligible organisations. In recent years, Armenia has introduced voluntary teacher certification, certification-based bonuses in law enforcement and defence agencies, higher base salaries for civil servants and performance-based rewards. The civil service pay reform from 2027 is estimated to require about AMD 30 billion in additional spending, roughly three times the annual cost of the social package. The justification also cites control problems, including cash-outs through tour operators.
As of July 2026, social package accounts held about AMD 13.1 billion. Account holders will be able to withdraw in cash or spend without restriction, in full or in parts, the sums accumulated before January 1, 2027, as well as amounts due before that date but transferred later. The money can be inherited. Banks will process transactions free of charge, provide monthly statements and pay interest on balances. Accounts will be closed no earlier than July 1, 2027, and the Central Bank will supervise the banks.
Universal health insurance is being introduced in stages from January 1, 2026. Former beneficiaries earning up to AMD 200 thousand a month will join the system from January 1, 2027, under a package of drafts by the Ministry of Health. Social package beneficiaries will also be able to claim an income tax refund for healthcare expenses, starting with annual returns for 2026.
The draft is linked to the repeal of Article 26(1) of the Law on Remuneration of Persons Holding State Positions and State Service Positions, which grants the right to the social package. Government Decision No. 1691-N of 2012, which set the rules for the package, will be repealed. For beneficiaries who do not hold state positions, the package is established only by that decision.
