Council of State Ruling on the Exemption of Meal Allowances Provided via Meal Vouchers from Social Security Premiums and the Current Legal Framework

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Council of State Ruling on the Exemption of Meal Allowances Provided via Meal Vouchers from Social Security Premiums and the Current Legal Framework

Atty. Ayris Tarcan

02/06/2025

Conceptual Framework and Background of the Practice

Pursuant to Article 80(1)(b) of the Social Insurance and General Health Insurance Law No. 5510 (“Law No. 5510”), in-kind benefits provided by employers to insured employees are excluded from the calculation of earnings subject to social security premiums. Conversely, in the case of cash benefits, only the portion exceeding the threshold determined by the Social Security Institution (“SSI”) is subject to premiums.

Following an amendment to the Social Security Procedures Regulation (“Regulation”) in 2022, it was stipulated that in the absence of on-site meal provision by the employer, only the portion of meal-related payments made to employees or on their behalf to third parties—up to 23.65% of the gross daily minimum wage—would be excluded from the premium calculation base. This rule was further clarified through SSI Circular No. 2022/22.

Decision of the Council of Administrative Chambers of the Council of State – Case No. 2024/2809, Decision No. 2025/539

The Council of Administrative Chambers of the Council of State (“DIDDK”) upheld the decision of the 10th Chamber of the Council of State dated 8 May 2024 (Case No. 2023/170, Decision No. 2024/1853), definitively annulling Article 97(7)(a) of the Regulation and Articles 2.1.2 and 2.1.4 of Circular No. 2022/22.

In its ruling, the Court held that even when meals are not directly provided by the employer, the provision of meal allowances through third parties or via vouchers or cards restricted to food purchases must still be treated as in-kind benefits and therefore excluded from the premium base. The decisive factor in this classification is that the benefit cannot be converted into cash and is used exclusively for nutrition.

Moreover, the Court found that the restrictive interpretation limiting the use of such cards to restaurants was incompatible with the broader legal definition of “nutrition” and thus deemed such a limitation unlawful.

Compliance Issues and Legal Uncertainty in Practice

Following the Council of State’s decision, the SSI issued Circular No. 2024/17 on 31 December 2024, redefining the rules governing meal allowances. The Circular states that when meal services are provided through third parties and funded via cards that are restricted to food-related expenses and are not convertible to cash, such allowances shall not be included in the premium base.

However, certain provisions of Circular No. 2024/17 appear inconsistent with the legal reasoning of the Council of State. As a result, employers may still face legal risks in practice. While the current provisions of Circular No. 2024/17 remain in effect, new judicial proceedings may potentially be initiated in respect of sections that are inconsistent with the Council of State’s ruling.

Conclusion

The Council of State’s decision provides important legal clarity regarding the classification of meal vouchers. The ruling confirms that restrictive administrative practices narrowing the scope of meal allowances are unlawful and reaffirms that such allowances, when used exclusively for nutritional purposes and not convertible to cash, must be treated as in-kind benefits.

To mitigate legal uncertainty and ensure alignment with the Council of State’s reasoning, it is essential that the SSI promptly revises the relevant secondary legislation.

Best regards,

DT Law