Transfer of social payments to Mir cards
The Russian Government issued a decree in April 2019 with a list of social payments which must be transferred to Mir payment system cards. The following benefits have been transferred since May 01, 2019 only to Mir cards:
- Maternity benefit;
- One-time allowance for women registered in the early stages of pregnancy;
- One-time childbirth benefit;
- Monthly childcare benefit;
- Temporary incapacity benefit (sick pay). This applies for now only to people who have been exposed to radiation, but this could change from 2020, and sick pay for all employees might need to be transferred only to Mir cards.
What does this mean for companies?
The decree requires banks to check whether Mir cards are tied to accounts and provides no penalties for employers.
When banks see that accounts are tied to payment system cards other than Mir, they must withhold benefit payments. Employers might not find out about this as only employees are notified of such withholding.
Should employees who already receive benefits on another payment system card switch to Mir payment system?
The new rule applies only to benefits awarded after May 01, 2019 or earlier if the first payment is made after May 01, 2019. If an employee received his first benefit payment before May 1st, then he could continue receiving it on a payment system card other than Mir until the car expires but no later than July 01, 2020.
How about employees who do not receive payments by bank cards? Do they need to get one?
No, the new rule applies only to employees who receive payments by bank cards. As previously, benefits may be received:
- In a bank account that is not tied to any card;
- In cash;
- By postal order.
- We recommend informing employees who are affected by this new rule that they need to obtain a Mir card;
- If a payroll card program is in place in your company, we recommend liaising with your bank to find out what options they offer for Mir cards.