Debtor

How to avoid becoming a debtor

Owing a debt to the Slovak Social Security Agency (Sociálna poisťovňa) is an unpleasant matter for the contribution payer. If contribution payers underestimate or neglect it, the debt accrues penalties and they will then have to deal with debt recovery issues. In order to avoid such a situation, the following rules should be followed.

1. Know when the obligation to pay contributions arises

• For both the employee and the employer, the obligation to pay contributions arises with a legal relationship providing the right to paid employment, that is to say, the creation of an employment relationship, an agreement for work performed outside an employment relationship, the creation of a function giving rise to a right to income from employment. Employers and employees in a legal relationship on the basis of an agreement for inclusion in active reserves during regular exercises or the performance of tasks for the Slovak armed forces are liable to pay contributions from the first day of the regular exercise or performance of the tasks for the Slovak armed forces.
• Self-employed persons (SEPs) are obliged to pay social security contributions from 1 July of the calendar year (if they have an extended deadline for filing the tax return for the previous year, from 1 October of the calendar year) if they had income from business and other self-employment in the preceding calendar year higher than 12 times the minimum assessment basis. Self-employed persons who submitted a tax return for the year 2019 after 31 March 2020 and made use of the ‘new’ deadline for filing a tax return during an extraordinary situation, or had an extended time limit for filing the tax return for 2019, are obliged to pay social security contributions from 1 February 2021 if they earned income from business and other self-employed activity in excess of EUR 6 078.00 in that calendar year. The obligation to pay contributions also arises for SEPs when they renew their legal status as an SEP if, in the calendar year in question, their income was higher than the statutory threshold. (Contribution calculators)

2. Correctly calculate the amount of contributions from the assessment basis

• An employee’s assessment basis is income from employment, excluding income which is not subject to or exempt from tax, and supplementary pension contributions paid by the employer for the employee. The employee’s assessment basis also includes shares in profits distributed by a commercial company or a cooperative to an employee without participation in the share capital of that company or cooperative.
• Self-employed person’s assessment basis – the Social Security Agency notifies the SEP of the requirement of compulsory sickness insurance and compulsory pension insurance. At the start of insurance, the Social Security Agency also notifies the SEP of the assessment basis, the contribution amount, the due date of contributions and the data relating to the payment of the contributions. The Social Security Agency is required to provide this information to the SEP within 20 days after the start of compulsory insurance. If the Social Security Agency does not inform the SEP of the start of the compulsory insurance within 20 days after the start of that insurance, i.e. at the same time it does not inform the SEP of the assessment basis or the amount of the contributions, it is recommended that the SEP contact the Social Security Agency to provide the information necessary for the assessment of the insurance requirement.
• ‘Foreign self-employed persons’ who are subject to Slovak legislation by virtue of EU regulations or an international treaty, are obliged to report:
• the amount of their income and expenditure within 8 days after the legal determination of being subject to the Slovak Republic’s legislation and, in the current year, by 31 May of that year at the latest for the previous calendar year;
• the establishment and termination of the licence to perform their professional activity as an SEP within 8 days after the date on which the licence was acquired and terminated, or make a declaration on their honour of the start and termination of a professional activity which is carried out without a licence.
• A voluntarily insured person determines his own assessment basis within the limits of the minimum and maximum assessment basis.
• The assessment basis is rounded down to the nearest euro cent. The individual amounts of social security contributions are determined from the assessment basis according to individual contribution rates and rounded down to the nearest euro cent (Table of payment of contributions).
• If the contribution payer pays an incorrect lower amount of contributions, the Social Security Agency will impose a penalty of 0.05 % of the amount due for each day of delay in paying the correct amount of contributions.

3. Pay contributions on time – comply with payment deadlines

• Due date for the employer – on the date specified for the payment of the income that is the employee’s assessment basis. If the payment of this income is spread over different days for the employer’s various business units, the contribution is payable on the date of the last payment of the income accounted for in the calendar month in question. In the absence of such a date, the contribution is payable on the last day of the calendar month following the one for which the contribution is paid. In the case of irregular income and income settled after termination of the legal relationship, the contribution is payable by the eighth day of the calendar month following the one in which the income was accounted for. In the case of agreements for work performed outside an employment relationship with irregular income, the contribution is due by the eighth day of the second calendar month following the one in which the legal relationship ceased to exist. If the income was accounted for after this repayment deadline, the contribution is due by the eighth day of the calendar month following the one in which the income was accounted for (Payment of contributions).
• Due date for a self-employed person – by the eighth day of the calendar month for the preceding calendar month.
• Due date for a voluntarily insured person – by the eighth day of the calendar month for the preceding calendar month.
• If the contributions are paid late, the Social Security Agency will impose a penalty of 0.05 % of the amount due for each day of delay from the due date of the contribution until the date on which the amount due is paid into the account of the Social Security Agency at the State Treasury, paid in cash or until the date when the check begins.

4. Correctly identify the payment of contributions with a variable, specific and constant symbol

• For the payment of insurance contributions, penalties and fines, it is the payer’s responsibility to identify the payment by stating the correct variable and specific symbol. This applies not only to SEPs and voluntarily insured persons, but also to employers.
• The variable symbol is the number assigned by the Social Security Agency to the contribution payer.
• The specific symbol indicates the period (in the form of MMYYYY or YYYYMM (e.g. 032021 or 202103 for March 2021)) or the prescription decision on the amount due to which the payment relates (the specific symbol appears in the operative part of the prescription decision on the amount due). If the contribution payer (SEP or voluntarily insured person) pays the contribution by a standing order, the specific symbol is 88. For the payment of social insurance contributions by the employer from the assessment basis, as reported on the Contribution Statement form, the specific symbol is the number of the Contribution Statement with the format XX99YYYY, where XX is the month in which the income was accounted for, the pre-printed 99 and YYYY representing the year in which the income was accounted for.
• We also recommend using the constant symbol for payments, which specifies the purpose of the payment.
• If a payment is not correctly identified, the payer is liable to pay a fine and the method of recording and assigning a payment to a period is determined by the Social Security Agency.

5. Pay contributions to the correct account

• All payments must be made into the branch accounts of the Social Security Agency at the State Treasury. The accounts for the payment of insurance contributions are published on the website.

6. If you have any queries or anything is unclear, contact the relevant Social Security Agency branch

• Staff at the Social Security Agency branch will answer any questions relating to the payment of contributions, and the payment of debts and penalties.
• For basic information concerning the obligation to pay contributions, citizens may also contact the Information and Advice Centre.
• From 1 December 2019, claims on social security contributions and pension savings contributions are treated as registered arrears on social security contributions. A natural person or a legal entity liable to pay contributions and pension savings contributions is deemed to have registered arrears on social security contributions if, for the period under consideration:
• a foreign SEP has failed to fulfil the statutory obligation to declare the amount of income and expenses and the facts relevant to the assessment of the start and end of his compulsory social security cover; or
• an employer has not submitted a monthly statement of contributions, unless proven otherwise.

I would like to check my debt

The Social Security Agency warns insured persons to be attentive and not to be misled by fraudsters after receiving a letter regarding recovery of insurance contribution arrears. Attempts at fraud and unauthorised debt recovery have been reported by clients at several branches of the Social Security Agency.

The principle of the fraud is similar in these cases: A company unknown to the insured person sends a letter warning that the person is obliged to pay arrears to the Social Security Agency. The information on the actual debt is drawn from the list of debtors published on the Social Security Agency website, so the warning seems credible. The debt which the company requests to be settled is increased by a certain amount (a penalty) and payment to an account number that does not belong to the Social Security Agency is requested. The letter also includes an invoice for the increased amount, repayable within a short period of time.

The Social Security Agency warns insured persons to verify the recovery of the debt in such cases and in case of any other doubts. They can do so in person, at any Social Security Agency branch.

The Social Security Agency recovers outstanding contributions and penalties in three ways: in administrative proceedings, through mandated administration or via a bailiff, but always after the debtor has first been asked in writing to settle the debt by means of an original decision. The debtor may appeal against the decision within 15 days. It is important to know that the Social Security Agency, its head office and all branches have accounts at the State Treasury with the bank code 8180 only.

Inclusion in the Social Security Agency’s list of debtors can easily be checked by the insured person here: List of debtors

Contacts for agency branches can be found here: Contacts – branches Account numbers of agency branches can be found on the website at: Account numbers of Social Security Agency branches

For other important information, see:
I am in debt – what can I do?
How to avoid becoming a debtor

I am in debt – what can I do?

If contribution payers finds that they have incurred a debt to the Social Security Agency, it is in their interest to resolve the situation. This avoids the accumulation of debt due to penalties for each day of late payment, as well as problems linked to the subsequent recovery of the debt, for example, under enforcement. How to proceed

1. How a debt is incurred

• By the contribution payer not paying contributions
• By the contribution payer paying a lower amount of contributions than that owed
• By late payment of contributions by the contribution payer
• By the contribution payer not indicating the correct variable, specific and constant symbol
• Through the prescription of a penalty for underpayment or late payment
• Through the imposition of a fine

• The Social Security Agency maintains a public electronic list of debtors on its website. The list of debtors includes legal entities and natural persons who owe the Social Security Agency EUR 5 or more. The list is updated 4 times a month.
• Through the notification of the decision to prescribe the outstanding amount of the contribution or a penalty, or the imposition of a fine.
• By a personal visit to the relevant Social Security Agency branch.
• By SMS or email (SEP, employer)
• It is in debtors’ interests to be informed of their debt, as with each day that contributions are not paid properly or on time, the sanctions – penalty for late payment or incorrect underpaying – increase. (The Social Security Agency is not obliged to warn debtors of the outstanding amounts.)

• The Social Security Agency prescribes the contribution due by means of a decision demanding payment of the contribution within a specific time limit and advising on the possibility of appealing. Contributions are only not prescribed by a decision if the amount owed is less than EUR 5.
• Penalties and fines are also prescribed through the issuing of a decision.
• Debtors have the option, while their debt has not yet been submitted for recovery, of applying to the Social Security Agency for authorisation of paying the amounts due by instalments (repayment schedule).
• From 1 January 2018 the Social Security Agency may, at the written request of a natural person or legal entity liable to pay contributions, authorise a repayment schedule for insolvency or for any other reason that would give rise to insolvency if:
  • it is reasonable to assume that, within a period of not more than 24 months, the debtor will be in a position to pay the contributions due; and
  • the debtor is able to duly pay contributions at the time of the decision to authorise payment of the outstanding amounts of contributions by instalments, if the debtor is the contribution payer at that time.
• If debtors fail to pay the amount due within the time limit, or do not appeal against the decision, or do not apply for a repayment schedule, the Social Security Agency will enforce the claim through its official authority by means of an administrative enforcement or will refer the claim to a bailiff or to the mandated administration.
• The obligation to pay outstanding contributions cannot be waived.
• The right to prescribe a contribution expires after 10 years from the date on which the contribution is due. The right to prescribe a contribution shall not expire if the obligation to declare the start or end of the obligation of the contribution payer has not been complied with. The right to enforce contributions expires after 6 years from the date on which the decision prescribing the contribution comes into legal force.

• Pay the amount due as soon as possible.
• Visit a Social Security Agency branch, communicate with them about the debt and resolve the situation.
• As long as the debt has not yet been referred for enforcement or mandated administration or the Social Security Agency has not initiated proceedings for the recovery of the claim through its official authority (a debt), the debtor may apply to Social Security Agency branch for a repayment schedule.

• Sanctions for incorrect or late payment in the form of a penalty: the later the outstanding contribution is paid, the higher the penalty, since late payment of the contribution incurs a penalty of 0.05 % of the outstanding contribution for each day of default from the due date and the payment date of the contribution.
• Non-payment of contributions has an impact on social insurance benefits from future claims.
• Threat of enforcement.
• Non-granting of a benefit from a social security scheme.
• Problems in the granting of loans and various subsidies.

• Pay the debt as soon as possible in order to avoid debt recovery.
• Ask about the option of applying for a repayment schedule.

• The application must be made in writing to the relevant Social Security Agency branch. The Social Security Agency may authorise instalments of amounts due under the conditions of point 3.
• Where the payment of amounts due by instalments is authorised, the Social Security Agency will determine the amount of each instalment of the amounts due, the deadline for payment of each instalment of those amounts, the number of the State Treasury account where the debtor will transfer the individual instalments and the amount of interest.
• Debtors are required to comply with the repayment schedule. If they fail to comply with the payment deadline set by the Social Security Agency for individual instalments, or pay a lower amount of individual instalments than that determined by the Social Security Agency, or fail to fulfil their obligations to pay contributions, the entire outstanding amount will become due. In such a case, the repayment schedule is cancelled and the amount already paid is used to set off the Social Security Agency’s claim.

• The Social Security Agency will deliver the debtor a notification of the transfer of the claim (debt) to mandated administration. The notification informs the debtor that the manner and form of recovery of the claim (debt) is at the discretion of the trustee.
• The debtor will be asked by the trustee to pay the claim (debt) in writing, by telephone and SMS.
• When dealing with such claims (debts) and the possibility of agreeing on a repayment schedule, the trustee should be contacted directly.
• The amount of the claim against the debtor that is transferred to mandated administration will not increase.
• The debtor continues to pay the claim (debt) to the original account number of the relevant Social Security Agency branch.

• After being informed that enforcement proceedings have started, the debtor must pay the claim (debt) as soon as possible, in which case the bailiff’s remuneration in the enforcement proceedings will only be 10 % of the amount to be recovered.
• The debtor shall pay the claim enforced by the Social Security Agency to the original account number of the relevant Social Security Agency branch, according to the notification.
• The amount of the claim enforced by the bailiff is increased by the enforcement costs.
• The bailiff may conclude a written agreement with the debtor on the gradual repayment of the recovered claim (debt) (pursuant to Act No 233/1995 on Bailiffs and Enforcement Activities (the Enforcement Act) and amending other acts, as amended).
• In the event of any questions concerning the enforcement proceedings and the payment of the debt claimed in the enforcement proceedings, the debtor should contact the competent bailiff or the relevant branch of the Social Security Agency.

• The Social Insurance Agency is entitled to enforce its claims through its official authority by means of ‘administrative enforcement’ (pursuant to Section 225a et seq. of Act No 461/2003 on Social Security, as amended by Act No 2/2017):
  • against a natural person by means of deductions from the debtor’s salary and other income, the imposition of a pecuniary claim on an account held with the debtor’s bank or branch of a foreign bank, and deductions from the benefits paid to the debtor by the Social Security Agency;
  • against a legal entity by the imposition of a pecuniary claim on an account held with the debtor’s bank or branch of a foreign bank.
• After receiving the notification of the commencement of recovery of the claim (debt), the debtor must pay the outstanding amount as soon as possible or lodge an appeal within 15 days against the notification of the commencement of recovery of the claim (debt) at the relevant Social Security Agency branch.

The term ‘personal bankruptcy’ is used to refer to a legal process by which an individual entrepreneur or non-entrepreneur may discharge his or her debts, including debts to the Social Security Agency. Act No 7/2005 on bankruptcy and restructuring, as amended, defines this term as discharge of a debt by bankruptcy or a repayment schedule. Essentially the debts of such a person cannot be recovered by enforcement and that person is protected from the consequences of enforcement.

If an individual is declared bankrupt with a discharge of debt, the Social Security Agency will file a claim. If the claims filed are partially satisfied during bankruptcy, the balance of the outstanding claim is rendered unenforceable. The unenforceability of a claim does not mean that it expires, but only that the Social Security Agency can no longer recover it. Consequently, the debtor remains on the register of debtors of the Social Security Agency. Similarly, in the event of debt discharge in the form of a repayment schedule, debts not paid by the repayment schedule are unenforceable.

The non-payment of social security contributions by an individual for a certain period of time will have an impact on the granting of later pension rights. However, even after the debt is discharged, an individual may still make up the contribution payments. It is therefore necessary to contact the Social Security Agency before or immediately after the application for bankruptcy and to enquire about the consequences of non-payment of contributions. Upon request, the branches of the Social Security Agency will notify the individual of the period and the amount of unpaid contributions. The same applies to individuals who have applied for a discharge of debt in the form of a repayment schedule and have not paid the contributions in full.

• The Social Security Agency does not have the option of waiving a penalty relating to outstanding contributions for the period after 1 January 2005.
• The Social Security Agency may waive a penalty in relation to contributions which were not been paid in time or were paid at a lower amount for the period up to 31 December 2004 only.
• The debtor may apply for a waiver of the obligation to pay a penalty. The application must be made in writing to the relevant Social Security Agency branch.
• The debtor must have paid the outstanding amounts of contributions at the latest on the date of submitting the written application and must pay contributions in due time and at the correct amount between the date of delivery of the application and the date of the decision on the application.