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Social Insurance System in Slovakia
The Social Insurance System in Slovakia has been newly defined by Act No 461/2003 Coll. on Social Insurance effective as of January 2004. The Act specifies the social insurance, amends the range of social insurance, legal relations within social insurance performance, the organisation of social insurance, the financing of social insurance, the state supervision over social insurance performance and acting in matters of the social insurance.
The aforementioned Act does not relate to the so called power branches, i.e. members of the Police Force, the Slovak Information Service, the National Security Authority, the Corps and Prison Court Guard, the Railroad Police, the Fire and Rescue Brigade, the Mountain Infantry Service, customs officers, professional armed forces personnel.
The Social Insurance System in Slovakia comprises apart from the sickness insurance, pension insurance and accident insurance, also of the unemployment insurance with the current inclusion of the legal form of providing benefits out of this system, and of the insurance in case of employer’s insolvency named the guarantee insurance. The competency in the area of unemployment benefits provision and guarantee insurance benefits has been taken over from the National Labour Office by the Social Insurance Agency (SIA). The SIA provides for disbursement of unemployment benefits, the job seeking registry is administered by the Centre of Labour, Social Affairs and Family.
The Social Insurance Agency is a statutory institution with a nationwide competency in the area of the sickness insurance, the pension insurance, the accident insurance, the unemployment insurance and the guarantee insurance. Its executive bodies consist of the Headquarters and 37 Branch Offices.
The Headquarters regulates, controls and methodologically guides Branch Offices, and is in charge of the pension insurance area and of two types of benefits from the accident insurance. Branch Offices are responsible for the collection and recovery of the sickness, unemployment and guarantee contributions, benefits pay out, as well as for a direct contact with clients.
The scope of operation of the SIA within the application of EC Law.
SIA has been designated to be the competent and the liaison institution for the following branches of social security:
Maternity and equivalent paternity benefits
Old - age benefits
Benefits in respect of accidents at work and occupational diseases
Benefits provided by the SIA in this area are the cash benefits, the benefits in kind are provided by the Health Insurance Companies. The cash benefit types include: sickness benefit, nursing benefit, equalization benefit, maternity benefit. The sickness benefits are provided from the social insurance system from the 11th day of employee’s working incapacity, in the case of a self – employed person and a voluntarily insured person from the 1st day of a temporary working incapacity until the end of the working incapacity, or until the recognition of invalidity, no longer than 52 weeks from the commencement of the temporary working incapacity. The calculation method of a daily amount of the sickness benefit has been simplified and unified for employees, self – employed persons and voluntarily insured persons. During the temporary working incapacity, the employee´ s income replacement is during the first ten days provided by an employer, the sickness benefit is then provided by the SIA from the 11th day.
Sickness benefit is provided per days, in the first 3 days the benefit equals to 25% of the daily assessment basis, from 4th day of the temporary incapacity for work the cash sickness benefit is 55% of the daily assessment basis.
The benefit is payable up to one year of the temporary incapacity, after this period the health condition must be re-examined.
Nursing benefit is provided per days in the amount of 55% of the daily assessment basis from the first day of attendance on a sick child, a husband, a wife, a parent or on a sick parent of his/her spouse whose health condition requires the treatment provided by another natural person.
Equalization benefit - the female employee is entitled to this kind of benefit, if redeployed for another job, as the work performed before is prohibited to pregnant women or, according to the medical report threatens her pregnancy, and the work she was transferred to provides for a lower income without her fault, compared to the income she had earned before her redeployment. The amount of the equalization benefit is 55% of the difference between the monthly assessment basis and the assessment basis from which the female employee pays premium for the sickness insurance in separate calendar months after being transferred to another job. The equalization benefit is provided for a calendar month, particularly even if the female employee was transferred to another job or secondment was finished during the calendar month.
Maternity benefit is provided per days in the amount of 55% of the daily assessment basis. The entitlement of the pregnant insured woman or of the insured woman taking care of a new born child is awarded provided that the person concerned has been insured at least 270 days within the period of two years prior to the confinement.
The benefit is payable for 28 weeks (37 weeks for the single mother and for multiple births) including at least six weeks before the expected date of childbirth.
The insuree, who has taken the child into a foster care, is entitled to the maternity benefit as of the day of taking the child into this care for the period of 22 weeks beginning by the inception of entitlement to maternity benefit.
Insurance of employer’s responsibility against working injury and occupational disease has been changed into the new insurance system - the accident insurance. This insurance is mandatory for the employer, except the employer as a judge and prosecutor. There is no minimum qualifying period required. The employer´ s accident insurance originates from the day he/she employed at least one employee and terminates by the day when no employee is engaged. Within the accident insurance the whole range of benefits is provided depending on the character of events, either repeatedly or as lump-sum payments. The categorization of accident benefits is as follows: additional accidental benefit, accidental rent, lump-sum settlement, survivor’s rent, lump–sum compensation, professional rehabilitation and rehabilitation benefit, retraining and retraining benefit, pain compensation and compensation for difficulties with social reintegration, compensation for medical expenses, funeral expenses reimbursement. The entitlement to accident benefits in the case of working injury and occupational disease of the damaged person is in compliance with the legislation granted only in proportion to the employer´ s responsibility, i.e. the benefit provided to the damaged employee is reduced by the rate of his/her evincible infliction.
The pension system reform required a re-definition and creation of a new institutional framework of the new systems. The implementation of the new social insurance system is based on most recent trends and experience from countries that have launched the fully-funded pillar system earlier than the Slovak Republic. The pension reform has been designed to build up a modern system of social security in the Slovak Republic, based on three pillars representing an important mandatory public pillar(1stpay-as-you-go pillar), old-age pension saving system(2nd pillar). The new system of social security is enhanced through tax deductible voluntary saving/insurance schemes, supported by the state (3rd pillar).
As it comes to the role of the SIA in the pension insurance as a whole, the SIA administers the 1st pillar, and is responsible for collecting of contributions for the 2nd pillar as well as for registering of contracts with Pension Asset Management Companies.
The retirement age introduced by the Act on Social Insurance is extended gradually (until the end of year 2023), and has currently been unified for men and women up to 62 years. The qualifying condition for entitlement to the old- age pension is 15 years of insurance and reaching the pensionable age. According to Act on Social Insurance, the following types of pension benefits are provided from the pension insurance system by the SIA: the old-age pension, the early old-age pension, the invalidity pension, and survivors´ pensions i.e. widow´ s pension, widower’s pension, orphan´ s pension.
Old- age pension - the amount of old-age pension is determined as a product of the average personal wage point, the period of pension insurance acquired as of the day of occurrence of the claim to the old-age pension and the current pension value; in compliance with the Slovak legislation the amount of minimum or maximum pensions is not determined.
A new kind of benefit introduced by the Act on Social insurance is the early old -age pension. The qualifying condition is achievement of at least 15 years of pension insurance, lacking two years to reach the retirement age at most, and satisfying the condition of reaching the pension amount equal to 1.2 multiple of the subsistence minimum level for a natural person by the day of claiming the benefit.
Invalidity pension – the qualifying condition is a reduction of capacity to perform the gainful activity due to a long term unfavourable health condition (longer than 1 year) by more than 40%, and achieving the required insurance period as of the day of invalidity occurrence and non qualifying to the old- age pension, or non awarding the early old - age pension. The pension insurance period is not required on condition the invalidity occurred due to the working injury or the occupational disease.
Survivors´ pension insurance includes widow ´s pension, widower’s pension and orphan’s pension.
Widow's pension represents 60% of the insured deceased person´ s pension. Entitled to this kind of benefit is the widow whose husband was receiving the old- age pension, the early old- age pension or the invalidity pension as of the day of his death, or satisfied conditions of the old - age pension entitlement as of the day of his death, or achieved the number of years of the pension insurance necessary to qualify to the invalidity pension as of the day of his death, or died due to the working injury or the occupational disease. The entitlement ceases:
by contracting of marriage
by the day validity of the court ruling according to which the widow caused the death of her husband by a wilful criminal act.
Widower's pension represents 60% of the insured deceased person’s pension. Entitled to this kind of benefit is the widower whose wife was receiving the old- age pension, the early old- age pension or the invalidity pension as of the day of her death, or satisfied conditions of the old- age pension entitlement as of the day of her death, or achieved the number of years of the pension insurance necessary to qualify to the invalidity pension as of the day of her death, or died due to the working injury or the occupational disease The entitlement ceases:
by contracting of marriage
by the day of the court ruling validity according to which the widow caused the death of his wife by a wilful criminal act.
Entitled of this type of benefit is the dependent child after a deceased parent or an adopter who as of the day of his/her death was receiving the old - age pension, early old- age pension or invalidity pension, or as of the day of his/her death completed the number of pension insurance years to qualify to the invalidity pension, or qualified to old- age pension or died due to a working injury or an occupational disease.
The amount of orphan ´s pension represents: 40% of the insured deceased parent/adopter´ s old- age or invalidity pension to which the deceased parent/adopter was entitled or would be entitled; or 40% of the insured deceased parent/adopter ´s early old- age pension to which the deceased person was entitled by the day of his/her death.
The entitlement to orphan pension ceases: by reaching the age of 26 years of the dependent child; as of the day of the validity of the court ruling according to which the dependent child caused the death of his/her parent or adopter.
The system of social insurance also includes the system of unemployment insurance. The insuree is entitled to the unemployment benefit on condition he/she had unemployment insurance for at least two years (i.e. 730 days) within the past three years before being included into the registry of unemployed job seekers. Entitled to the unemployment benefit is also the insuree who within the past four years before being included into the registry of unemployment job seekers achieved at least two years of insurance related to the labour relation concluded for a definite period, or two years of the voluntary insurance, and at the same time was not insured for the purposes of unemployment due to other activity as an employee. The entitlement ceases to by elapsing six month period (in certain cases by elapsing four months) from the commencement of the benefit entitlement, or as of the day of granting the old-age pension, the early old- age pension and the invalidity pension due to incapacity to perform gainful activity by more than 70%. The unemployment insurance does not relate to the natural person who had been granted the old- age pension, the early old- age pension or the invalidity pension due to a decrease in performing gainful activities by more than 70%. The unemployment benefit is provided per days. The amount of unemployment benefit equals to 50% of the daily assessment basis times number of days in the month. The daily assessment basis to determine the unemployment benefit is the quotient of assessment basis footings for payment of unemployment insurance contributions completed by the person in past two years.
The insuree is not entitled to the unemployment benefit disbursement in the period when being granted:
It is the insurance in case of the employer´ s insolvency. Entitled to this type of benefit is the employee whose employer has become insolvent and as a result cannot provide for satisfying of employees´ entitlements. The benefit is provided for a three month period on condition of the labour relation duration for the past 18 months preceding the employer´ s insolvency. The benefit is paid as a lump sum.