Template for the State of Art Report The state of art report aims at setting up a common knowledge base about the characteristics of national social security systems in partner countries (Bulgaria, Czech Republic, Hungary, Italy, Poland and Romania). The review will focus on the following dimensions of social security: - Old-age pensions and early retirement pensions - Survivor pensions - Disability benefits - Unemployment benefits - Family benefits - Maternity and paternity benefits - Sickness benefits - Minimum resources (means-tested) benefits - Pensions private schemes 1. Introduction: main characteristics of the social security system (max 6 pages) i) short history; It is over 80 years since the modern social insurance came to the Czech lands. Act No. 221/1924 Collection of Laws and Regulations, on Sickness, Disability and Pension Insurance for Employees was adopted on 30 October 1924. The act introduced different insurance types, insurance courts and criminal liability for failure to pay insurance contributions as well as penalties for breaching other obligations, without which the system would not function. ii) main institutions involved (names and roles); Ministry of Labour and Social Affairs unemployment benefits, family benefits, paternity benefits Labour Office of the Czech Republic, Regional branches and the Branch of the capital of Prague unemployment benefits, family benefits, paternity benefits, Czech Social Security Administration, district social security administration pension insurance (old age, invalidity, survival), sickness insurance (sickness pay, attendance allowance), maternity benefits (maternity benefit, compensatory benefit in pregnancy and maternity) Ministry of Defence pension and sickness insurance for employee s Ministry of Internal Affairs - pension and sickness insurance for employee s Ministry of Justice - pension and sickness insurance for employee s iii) financing principles (general);
The social insurance system includes the basic compulsory pension insurance and sickness insurance. The contributions to the state s employment policy are also collected within the framework of the system, as well as the social security contributions. The state social support system is a non-contributory system which is financed from the state budget and administered by the assigned state bodies. By means of the state social support system, the state contributes in particular to families with dependent children in the case of an acknowledged social situation which the family is unable to resolve using its own funds and abilities. The social support payments follow the life cycle of the dependent child frombirth through to the end of the education process and they provide help to families with children in various diffi cult situations (such as insufficient income, care for a new-born or small child, care for a child with a disability, an incomplete family and so on). The social care allowances for individuals with disabilities react to the certain specifi c needs for this group of individuals. They assist in resolving the need for mobility, housing and aids. iv) coverage; I. Social Insurance Participation in the pension insurance scheme The participation in the basic pension insurance scheme iscompulsory upon the fulfi lment of the designated conditions. The Pension Insurance Act, which contains the appropriate legalregulations, does, however, also enable voluntary participation inthe pension insurance scheme at a designated extent within the framework of the basic compulsory pension insurance scheme. A uniform set of legal regulations apply to all the individual groups of insured individuals [individuals in employment,individuals in the services, co-operative members, selfemployed individuals and other groups of insured individuals]. The legal right to a pension arises once the legally designatedconditions have been fulfi lled.all of the decisions on the entitlement to pension insurancepayments and the amount or payment thereof are subject tocourt review. the basic pension insurance scheme is economically guaranteed bythe state, because it is not possible to leave pensioners withoutany source of the funds, on which they are existentially dependent. The merit principle only manifests itself in the pension systemto a limited extent as a consequence of the simultaneousapplication of the principle of social solidarity (the existenceof the reduction limits, which are used to limit the charging ofhigher earnings in the designated manner, causes a fall in the relative level of the pension with increasing earnings which can nbe charged for the purposes of pension insurance). Participation in sickness insurance Sickness insurance is participated by employees (among whom we also include the members of the armed forces and security forces) and self-employed individuals. Employees are obliged to participate in the sickness insurance scheme Sickness insurance remains voluntary for self-employed individuals. The compulsory participation in the sickness insurance scheme arises for employees, if they fulfi l the 3 basic conditions set out in the Sickness Insurance Act, which are: the performance of work in the territory of the Czech Republic in employment undertaken in labour law or labour relations which may form the basis for participation in the sickness insurance, the scope of employment which is designated by the minimum number of days (the employment has lasted or should last at least 15 calendar days),
the minimum amount of the agreed income (this involves the so-called determinate income, the limit of which has been designated at 2 500 CZK and will be increased according to the development of the average wage). Special conditions for the participation of employees in sickness insurance are designated for the case of small-scale employment, i.e. employment, for which the conditions of the performance of the employment within the territory of the Czech Republic and the length of the duration of the employment have been fulfi lled, but the condition of the negotiated earnings in employment at the designated amount have not been fulfi lled (i.e. at least 2 500 CZK). During the performance of small-scale employment, the employee is only insured in those calendar months, in which he/ she earned at least the appropriate determinate income. Self-employed individuals may participate in the sickness insurance scheme, if they undertake gainful activities outside the territory of the Czech Republic, but only upon the basis of an authorisation arising from the legal regulations of the Czech Republic. The participation in the sickness insurance arises upon the basis of the submission of a sickness insurance registration form and the payment of the sickness insurance contributions. The sickness insurance of selfemployed individuals lapses on the fi rst day of the calendar month, for which the selfemployed individual has not duly paid the insurance contribution. II. State social support Persons-Czech citizens and foreigners - have a right to benefits if they and the family/household members assessed jointly with them are registered as permanently resident in the Czech Republic and have their residence here. For non-eu foreign nationals, the registration as permanently resident in the Czech Republic is considered to be the period once 365 days have passed since the date they registered to stay in the Czech Republic. This does not include any period during which a person is seeking asylum. Act No 117/1995 Coll. on State Social Support stipulates other persons eligible for state social support benefits, if they have their residence in the Czech Republic. In the range of persons covered, there are also EU nationals who are subject of directly applicable legislation of the EU. Entitlement to the payment of benefits expires once three months have passed since the date to which the benefits apply. In the case of one-off benefits, an entitlement expires one year as of the date to which the benefit applies. Income decisive for an entitlement to state social support benefits includes, in particular, income from dependent activity (employment), income from entrepreneurship or other self-employment, sickness and pension scheme benefits, unemployment benefit, including similar income from abroad. Net income is taken into account in the decisive income. Family for the purposes of state social support consist of parents and dependent children if they reside jointly and cover costs of their needs in common. Dependent children are children up to the end of compulsory school attendance and beyond, if they undergo further education or vocational training, or if they are disabled, but up to a maximum of 26 years of age. In the case of housing allowance, all persons registered as permanently resident in the flat are jointly assessed and the condition of covering costs of their needs in common is not requested. v) possibility to cumulate benefits; There is not general answer. It depends on the indivudal type of benefits.
vi) application procedures. Pension insurance The Czech Social Security Administration is competent for a decision about entitlement and amount of a benefit. The entitlement examined after submitting an application on a prescribed form at the locally competent District Social Security Administration pursuant to the place of the applicant s permanent residence. With an applicant who does not have a permanent residence in the Czech Republic, any District Social Security Administration fills in the Czech Republic in the application Sickness insurance Sickness insurance for all insured people (with the exception of officers, those in custody and convicts) will only be conducted by District Social Security Administrations. The District Social Security Administration will pay the appropriate benefit within 1 month after the day on which the application (i.e. the proof of the right to the benefit payment) was delivered to this Administration. Employees may choose how the benefits will be paid to a bank account or in cash (by money order); if paid in cash (by money order), the cash delivery costs will be borne by the employee. The payment of benefits to foreign countries, on the basis of insured person s application, can only be made to an insured person s bank account, with the insured paying the money transfer costs. State social support Applications for state social support benefits are handled by the contact points of the Regional Branches of the Labour Office of the Czech Republic based on the (permanent) residence of the person entitled to the benefit (the eligible applicant). Applications for benefits are submitted on forms prescribed by the Ministry of Labour and Social Affairs. The addresses of the Regional Branches of the Labour Office of the Czech Republic can be found at http://portal.mpsv.cz/ssp/local. The application forms are available from http://forms.mpsv.cz/sspforms/ or http://portal.mpsv.cz/ssp/elforms. These appellate body is the Ministry of Labour and Social Affairs. The Czech Social Security Administration (further CSSA ) is the largest financial organization of the Czech public administration with annual income and expenses of almost CZK 700 billion and nearly 9000 employee s. As part of the public administration, the CSSA falls under the Czech Ministry of Labour and Social Affairs. The CSSA contributes more than a third to the national budget by collecting social security premiums and contributions to the state employment policy. It covers social security issues for almost 8 million clients. The Director General of the CSSA is nominated by the Minister of Labour and Social Affairs. The CSSA Headquarters are settled in Prague and further round 90 District Social Security Administrations are established in all big cities and administrative centres; informatik for clients is provided via these bodls as well by Central Information Office in Prague and free call-centres (for pensions, sickness instance and executions). One of the main tasks of the CSSA is to collect and enforce payable social security premiums, which includes pension insurance, sickness insurance and a contribution to the state employment policy. The CSSA takes decisions on pension benefits (except pensions within the responsibility of the Interior, Defence and Justice Ministry) and arranges to pay them. These include old-age pensions or disability pensions, widows and widowers pensions and orphans pensions. The CSSA also takes decisions on sickness benefits in cash (sickness benefits, maternity cash benefits, compensatory pregnancy and maternity benefits and also allowances for care of a family member) and arranges for them to be paid. The CSSA also includes the Medical Assessment Service which assesses the health condition and work ability of citizens for the purposes of sickness and pension insurance, state social support and long-term care
benefits. They also check the assessment of temporary work inability made by treating physicians. In accordance with Regulation (ECC) No. 883/04 and 987/09 on the coordination of social security systems, the CSSA is the liaison body and competent institution for cash sickness benefits and maternity benefits, pensions and determining the applicable legislation, in preparation is the Access Point for these competencies. The CSSA also makes sure 30 bilateral agreements on social security falling under the scope of its activities are implemented, pays out pensions to 72 states (in 2011 round 65 000). All figures related to international agenda are increasing year by year. A few data and figures: International area: liaison body (Headquarters) competent institution (CSSA Headquarters - pensions) determination of legislation applicable institution of the place of residence and the place of stay (DSSAs) contact institution for pensions (Headquarters) designated institution for recovery and offsetting Pensions - CSSA decides: on benefits according to the domestic legislation and on benefits according to the EC Regulations in accordance with bilateral agreements on social security issues approx. 400,000 decisions every year Length of the procedures on average in national pension cases: 30 days old-age pension 40 days survivor s pension 60-70 invalidity pension Lengths of procedures in international pension cases: another 100 days on average Cca 30 bilateral agreements (14 out of EU/EEA area) Payments to 72 countries, 50-70 000 recipients monthly (Life certificates) Year Number of applications for national pensions in the years 2007-2011 Old-age pensions altogether Thereof early old-age pension Invalidity pensions Survival pensions 2007 119 308 34 169 66 790 47 339 233 437 2008 129 062 37 807 65 366 47 681 242 109 2009 141 774 52 967 64 902 48 705 255 381 2010 122 568 34 342 42 457 48 406 213 431 2011 168 611 86 146 39 059 45 197 252 867 Comment to the table: 1) These statistical data are obtained by registration the application form into the system (PC) in the given year, which allows division into the types of pensions. The actual numbers of applications in particular years (including those, whose registration does not get through PC) were: in a year 2007 244 113 All
in a year 2008 251 396 in a year 2009 270 352 in a year 2010 224 277 in a year 2011 259 611. Applications submitted for international pensions: 16 000 14 000 12 000 10 000 8 000 9,289 9,313 11,087 12,378 13,167 13,774 15,995 15,693 6 000 4 000 2 000 4,648 4,447 5,460 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2. Information by typology of benefits PENSION SYSTEM Along with sickness insurance, basic pension insurance is part of social insurance in the narrow sense of the word. The Czech pension system is composed of two parts. The first pillar is obligatory basic pension insurance, defined-benefit (DB) and pay-as-you-go (PAYGO). It is universal and covers all economically active persons; the legislation is the same for all insurees; there are no special schemes for different sectors etc. For the force departments (e.g. army servicemen, policemen, customs officers, firemen) there are merely some differences in the organisational and administrative realm. A pension from basic pension insurance is collected by more than 99% of the population above the age limit for eligibility for old-age pension. Besides this there is voluntary, supplemental, defined-contribution (DC) pension insurance, financed out of supplemental pension insurance with a state contribution. In EU terminology, supplemental pension insurance with a state contribution can be regarded as the third pillar of the pension system. Products of commercial insurance companies most notably life insurance also form part of the third pillar. So far, pensions awarded from the third pillar have accounted for a negligible proportion of pensioners incomes. This pillar is not
covered by the Ministry of Labour and Social Affairs web site, because it falls under the authority of the Ministry of Finance. The second pillar customary in EU member states (workplace pension schemes) does not exist in the Czech pension system. The fundamental material-law regulation governing pension entitlements under basic pension insurance, the way pension amounts are defined and the conditions for paying them out is Act No. 155/1995, on pension insurance, as amended, which entered into effect on 1 January 1996. Types of pension The following pensions are provided out of basic pension insurance: old-age (including early old-age pension ); disability; widows and widowers ; orphans. The pension is composed of two components, namely: a basic assessment (defined as a fixed sum that is the same for all types of pension regardless of the duration of the insurance period and size of earnings); and a proportional assessment. If the conditions of entitlement to more than one pension of the same kind or payment of oldage or disability pension are satisfied, only one pension, the larger one, is paid out. If the conditions entitling a person to old-age or disability pension and to widows or widowers pension or orphans pension are simultaneously satisfied, the larger pension is paid out in full and half of the proportional assessment of the other pensions is paid out, unless the act on pension insurance stipulates otherwise. Decisions on entitlement to a pension and its amount and payment are made by the Czech Social Security Administration, save in cases where these decisions fall to the social security authorities of the ministries of defence, the interior and justice (in the case of members of the armed forces, the police and the fire brigade). Pension insurance Under the act on pension insurance persons participating in this insurance are provided for in life situations such as old age, disability and the death of the breadwinner. In these situations insurance payers are entitled to receive pension security benefits. Along with sickness insurance, basic pension insurance forms part of social security within the meaning of Act No. 582/1991, on the organisation and implementation of social security, as amended. The fundamental piece of legislation governing pension entitlements, the way pension amounts are defined and the conditions for paying them is Act No. 155/1995, on pension insurance, which entered into effect on 1 January 1996.
Pension insurance is governed by the following regulations (links to the Public Administration Portal): Act No. 155/1995, on pension insurance; Act No. 582/1991, on the organisation and implementation of social security; Act No. 100/1988, on social security; Decree No. 284/1995, implementing the act on pension insurance; Decree No. 149/1988, implementing the act on social security. Mandatory pension insurance Those performing gainful activity participate in pension insurance on the assumption that their gainful activity is extensive enough to establish participation in the insurance. Range of insured persons As of 1 January 2012, the following gainfully employed individuals shall be parties to pension insurance coverage, provided that the scope of the wage-earning activity establishes their participation in sickness insurance coverage: a) Employed employees; b) Members of the Police Force of the Czech Republic, the Prison Service of the Czech Republic, the Security Information Service, the Office for Foreign Relations and Information, the Fire Rescue Service of the Czech Republic, the Customs Administration of the Czech Republic, professional soldiers, and civil servant pursuant to the Civil Service Act; c) Members of cooperatives in cooperatives, if in addition to their industrial relations they also carry out work for the cooperative, for which they receive remuneration; d) Individuals, who are, pursuant to a special legal regulation, appointed and/or elected to act as the head of an administrative authority or the statutory body of a legal entity established pursuant to a special legal regulation, or to act as the deputy of such a head or statutory body, if this head / statutory body is only one person, and the appointment / election did not result in an employment / service relationship for these persons, and physical entities holding a public office outside of an employment / service relationship pursuant to a special legal regulation, if the Labour Code applies to their employment relationship within the stipulated extent; e) Employees with an agreement on working activity; f) Employees based on an agreement to complete a job, provided their reported income exceeds CZK 10 000 g) Judges; h) Members of municipal councils and city districts / precincts councils of regionally subdivided statutory cities and the city of Prague, who are released, on a long-term basis, to hold the office or who were not employed prior to being elected as councilmen, however, who hold the office to the same extent as councilmen released on a long-term basis; ch) Members of the Chamber of Deputies and Senators of the Senate of the Parliament of the Czech Republic and the Members of the European Parliament, elected within the Czech Republic; i) The President of the Czech Republic, cabinet members, the president, the Vice-President, and members of the Supreme Audit Office, members of the Council for Radio and Television Broadcasting, members of the Institute for the Study of Totalitarian Regimes,
members of the Czech Telecommunication Office, the financial arbitrator, the deputy financial arbitrator, the Public Defender of Rights, and the Deputy of the Public Defender of Rights; j) Voluntary day care employees; k) Foster-parents, who provide foster care within establishments that provide foster care pursuant to a special legal regulation, or who receive remuneration for providing foster care as a foster-parent in special cases pursuant to a special legal regulation; l) Convicted persons serving a sentence of imprisonment enrolled for work and Individuals serving a prison sentence reintegrated into work and persons in security detention reintegrated into work m) Employees within employment concluded according to foreign legal regulations. n) Partners and executives of limited liability companies and limited partners in special limited partnerships if they carry out work for the company outside of an employment relationship and such work is remunerated, and directors of public undertakings or utilities if they carry out work for the company outside of an employment relationship and such work is remunerated o) Authorised agents (proxies) if their income from their work as agents (proxies) is deemed income from dependent activity under the Income Tax Act p) Members of collective bodies of legal persons, where such members are remunerated for their work in such bodies, provided the income for their work in such bodies is deemed income from dependent activity or emoluments under the Income Tax Act q) Liquidators (receivers) if their income from their work as liquidators (receivers) is deemed dependent activity under the Income Tax Act r) Heads (directors) of establishments (branches) of legal persons where the registered office of such legal person is located in a state with which the Czech Republic has not concluded an international agreement on social security, provided such establishments (branches) are registered in the Commercial Register and the permanent place of work of such heads (directors) is in the Czech Republic. The period of insurance shall be documented by one personal pension instance file (see personal records). Self-employed persons, provided they carry on their business in the Czech Republic and fulfil certain stipulated conditions, and persons who voluntarily take part in pension insurance shall also be parties to pension insurance. Voluntary participation in pension insurance Voluntary participation in pension insurance coverage is possible for individuals who are 18 years old or older. The appropriate district social security administration (DSSA) for the place of one s permanent residence or for one s reported place of residence (in the case of a foreigner) accepts applications and keeps records of voluntary pension insurance coverage. Individuals who do not have a permanent or reported place of residence in the Czech Republic may submit applications to any DSSA, which is obliged to accept them. If the application for participation in voluntary pension insurance coverage is submitted at the time when pension proceedings are already underway, the DSSA where the pension insurance coverage request has been filed is the appropriate DSSA in proceedings on payment of the insurance premium. As of 1 January 2012, participation in voluntary pension insurance coverage is possible only until the day that immediately precedes the day of establishment of the entitlement to old-age pension.
From January 1 st 2012 the minimum insurance premium for voluntary insurance is CZK 1,760. It is possible to participate in voluntary pension insurance pursuant to the provisions of 6, section 1 of Act no. 155/1995 Coll., as amended, for the following reasons: a) An individual is registered by a labour office as a job applicant, provided unemployment benefits / retraining benefits are not awarded for this period; b) Systematic preparation for a future occupation secondary school or university in the Czech Republic or abroad, as the case might be, if according to the decision of the Ministry of Education - this study program is equal to study programs at secondary schools and universities in the Czech Republic; with the exception of the first six years of this study after reaching the age of 18; the first 6 years after reaching the age of 18 is included as from 1. 1. 1996. This insurance is possible as from 1. 1. 2002. As of 1 January 2010, individuals who reach 18 years of age may register for voluntary pension insurance. Confirmation about the duration of one s studies has to be submitted along with the insurance registration application or insurance deregistration application. Studies can be demonstrated by presenting a report card, credit book, or confirmation from the respective school. The presented documents have to show the date of commencement or termination of studies. These two types of voluntary insurance coverage can even be applied retroactively prior to submitting the application without any time limits. c) Gainful activity abroad after 31. 12. 1995, in case of: An employee within employment; Members of cooperatives in cooperatives where an employment relationship of the members to the cooperative is a necessary condition of their membership, if in addition to their industrial relations they also carry out work for the cooperative, for which they receive remuneration; Self-employed persons. d) Long-term voluntary service on the basis of a contract concluded with the delegating organization. e) Activities in the Czech Republic on behalf of a foreign employer in case of individuals, who are employed by a foreign employer and who act on behalf of (in favour of) this employer in the Czech Republic. It is also possible to participate in the insurance prior to submitting an application, however only for up to two years immediately preceding this day. f) Discharge of the office of Member of European Parliament elected in the Czech Republic in force from 19 September 2009 [Section 6(1)(f) of Act No. 155/1995 Coll.]. g) Residence abroad for the reason of accompanying one s spouse who is a member of the diplomatic corps of the Czech Republic in force from 1 January 2010 [Section 6(1)(g) of Act No. 155/1995 Coll.]. These two types of voluntary insurance coverage can even be applied retroactively prior to submitting the application without any time limits, but no sooner than as of the date of force of the statutory amendment. h) Voluntary insurance coverage without stating a reason:
Individuals over 18 years of age who submitted a voluntary insurance coverage registration application even though they do not fulfil the conditions stated above may also apply for voluntary pension insurance coverage. In such case, however, participation in insurance coverage is possible for a maximum of 10 years. For the period prior to the date of submission of the application, participation in insurance coverage is possible for no more than one year immediately preceding such date. If the ten-year period expires and one does not submit an insurance deregistration application, participation in the insurance coverage ends on the last day of such period. Obligations of Employers According to the Act an employee can be a legal or physical entity who employs at least one employee, and a state organisational unit, which includes employees in employment or those who are employed through a work agreement. An employer carries out activities connected with insurance tasks at his own expense. A local affiliation to the District Social Security Administration office is determined according to an employer s place of business depending on whether he/she does not have a payroll department or the place of a payroll department is not the same as the employer s place of business; or according to an employer s place of a payroll department depending on whether he/she does have a payroll department and its place is not the same as the employer s place of business. As for an employer a physical entity, a place of business is considered to be his/her place of residence in the Czech Republic, and if he/she is a foreigner his/her notified place of residence in the Czech Republic. If a physical entity an employer does have permanent residence, nor a notified place of residence in the Czech Republic, a local affiliation to the District Social Security Administration office is determined according to the place where business is carried out (or according to his/her place of work, the place of work of his/her employees) in the Czech Republic. If a foreign legal person is an employer whose wage division is not located in the Czech Republic, the Prague Social Security Administration, located at the address Trojská 1997, Prague 8, has been designated the locally pertinent social security administration. Keeping personal pension insurance records (PPIRs) is one of the obligations of employers laid down by Act No. 582/1991, on the organisation and implementation of social security, as amended. Employers keep PPIRs for every person participating in pension insurance for the individual calendar year, or part thereof if gainful activity establishing participation in pension insurance was begun or ended during the calendar year. PPIRs are also kept for recipients of old-age pension who have not yet reached pensionable age (i.e. recipients of early old-age pension who are not entitled to receive old-age pension after starting employment) and also, for 2009, for recipients of old-age pension who are gainfully active having reached pensionable age, if they were participants in pension insurance abroad at any time in the past or in 2009. Following a change in the legislation on entitlement to increased pension for a period of gainful activity when collecting old-age pension, it has been necessary since 1.1.2010 to keep PPIRs for all oldage pension beneficiaries as well.
Participation in pension insurance is not established and records are not kept in the case of gainful activity whose extent does not establish participation in sickness or pension insurance. For every calendar year, after the close of books (close of payroll), but no later than on 30 April the following calendar year, and if participation in pension insurance is terminated before 31.12. of the given calendar year within 1 month after the final incomes settlement, but no later than by 31 January of the following calendar year, the following information is set down in the PPIRs: employer s identification data; citizen s name, last surname, family surname, date and place of birth, place of permanent residence and birth index number; type of gainful activity; duration of participation in pension insurance; period of pension insurance; assessment base for insurance contributions to social security and the contribution to state employment policy; periods which are excluded from the personal assessment base when calculating pensions; periods which, from the date on which the age necessary for old-age pension eligibility is attained, are not regarded as performance of gainful activity for the purposes of increasing the old-age pension proportional assessment. Social Security Premium Employers, employees who are participants in sickness and pension insurance, self-employed persons, and people who have voluntarily signed up for pension insurance are obliged to pay insurance. The legal regulations of premiums are contained in the Act No. 589/1992 Col., on Premiums for Social Security and Contribution to the State Policy of Employment, as amended. Premiums are income from the state budget and it includes: premiums on sickness insurance premiums on pension insurance contribution to the state policy of employment (Does not include premiums for health insurance, which is collected by health insurance companies.) The amount of premium is determined by a percentage rate from the basis of assessment established for the decisive period. This is for employers the calendar month, for which premium is paid. For self-employed persons, the period concerned is a calendar year and the assessment base for calculating the insurance premium is the amount that they themselves determined, but not less than 50% of the tax base. Premiums are paid in Czech currency. As the date of payment is with book transfers from a bank account considered the date, when debiting from the premium payer s acount was executed, with payments in cash the date, when the bank, the holder of post licence, or the competent OSSZ received cash. Maximum Calculation Base for Employees
There is a new maximum calculation base for payment of social security premium and contribution to the state employment policy (hereinafter just Insurance Premium), defined as 72 multiple of the mean annual wage. The maximum calculation base for the purpose of insurance premium calculation amounts to CZK 1.809.864,-. The procedure in case of reaching the maximum calculation base then depends on the number of employers of the respective employee. If in a calendar year the sum of the calculation bases of an employee exceeds the maximum calculation base and the employee only had one employer in the calendar year in question then the employee shall not pay for that year the premium from the amount in excess to the maximum calculation base; this also applies to more employments in the given calendar year with the same employer. The calculation base for the employer shoe not then include the amount in excess of the maximum calculation base of the employee from which the employe does not pay premium in the given calendar year. That means that the employer does not pay premium for the employee from the excess amount from which the employee itself does not pay premium (6 % of the calculation base), and does not even pay premium for itself from the same excess amount (25 % of the calculation base). If in a calendar year the sum of the calculation bases of an employee exceeds the maximum calculation base and the employee was employed with more employers that calendar year, then the premium paid by the employee from the sum of his or her calculation bases in all jobs in excess to the maximum calculation base is considered overpayment by the employee; this overpayment, however, cannot be higher than the amount deducted from the employee's income as insurance premium. In such case the employee shall submit a written request for return of the overpayment supported with confirmations from all his or her employers about the calculation base achieved by the employee with them in the given calendar year for which the premium was deducted from the employee's salary. The affected employers, however, shall not be returned the premium paid for themselves (25 % of the calculation base). Maximum Calculation Base of Self-Employed and Employee at the Same Time The maximum calculation base of the self-employed for the purpose of premium payment since 1 January 2010 has also been 72 multiple of the mean wage. The maximum calculation base shall also apply in cases when the insured performed work as self-employed and employee concurrently in the course of the calendar year in question. The calculation base of such an insured shall be reduced by the amount of excess of the maximum calculation base calculated as the sum of calculation bases for all his or her employments including the self-employment. The reduction shall first be applied to the calculation base of the person's work as self-employed. If the self-employed person has reached the maximum calculation base in his or her job with an employer then the person shall not pay premium from its activity as self-employed but the pension insurance shall also extend to this activity. The self-employed shall not be liable to pay the advance premium since the calendar month in which he or she has notified the SSA about reaching the maximum calculation base in the employment with the appropriate documentation. The fact whether the self-employed has reached the maximum calculation base in a single job or in more jobs for different employers does not matter for this purpose. The basis of assessment is:
with an employee, who is employed under the Czech legislation, a sum of his/her gross counting incomes credited by the employer in relation with pursuance of employment, which establishes participation on sickness insurance an incomes credited by employer in relation with employment which establishes participation on sickness insurance Act. No. 589/1992 Coll., as amended); with an employee, who is employed under different legislation thant the Czech legislation, a sum of incomes credited to him/her by employer in relation with this labour relation, which establishes participation on sickness insurance excluding incomes that reimburse to this employee expenses for employer or damage ocurred in relation with this employment; with an employer, a sum corresponding to the total of basis of assessment of all of its employees. Self-Employed Persons According to Act No. 155/1995 Coll., on Pension Insurance, as amended, the following are considered self-employed: they carry out an independent gainful activity, or they co-operate in carrying out an independent gainful activity, if the income from this activity and the expenses incurred by it can be divided to this person pursuant to Act No. 586/1992 Coll., on the Income Taxes, as amended, they have completed the mandatory school attendance and have reached at least the age of 15. An independent gainful activity is understood as: the business of farming, if the natural person carrying out the farming is registered pursuant to special legislation carrying out a craft on the basis of an authorization to carry out a craft pursuant to special legislation the activity of a partner in a partnership or general partner in a limited partnership carried out on behalf of this company carrying out an artistic or other creative activity on the basis of copyright relations Carrying out an independent gainful activity in the Czech Republic is understood both as carrying out an independent gainful activity in the Czech Republic and outside the Czech Republic, if it is carried out on the basis of an authorization for carrying out this activity under Czech legislation. This will apply unless the applicable legislation is governed by a relevant international agreement on social security or by Regulation (EEC) No. 883/04 and Regulation (EEC) No. 987/09. Types of independent gainful activity From 1 January 2004 the difference between a major and subsidiary independent gainful activity has been distinguished. An independent gainful activity is always considered major unless the conditions for a subsidiary independent gainful activity are fulfilled. An independent gainful activity is considered subsidiary if the self-employed person in the calendar year:
was employed was entitled to the payment of a invalidity pension or an old-age pension has been awarded to him/her was entitled to a parental allowance or maternity cash benefit or sickness benefit due to pregnancy and delivery if there is an entitlement to these benefits on the basis of sickness insurance of employed persons or cared personally for a person under 10 years who is dependent on the care of another person in degree I (light dependency) or for a person who is dependent on the care of another person in degree II (medium dependency) or degree III (heavy dependency) or degree IV (full dependency), if the person who is dependent on the care of another person is a close relative or lives with the self-employed person in a common household served in the Czech military, unless they are professional soldiers, or community service was a dependent child within the meaning of 20 (3) (a) of Act No. 155/1995 Coll., on Pension Insurance, as amended (study) Insurance Participation of Self-Employed Persons If the statutory conditions are satisfied participation in pension insurance and the payment of a contribution to the state employment policy are mandatory for self-employed persons. Sickness insurance is voluntary. Participation of self-employed persons in pension insurance A self-employed person participates in pension insurance: in a calendar year for the period in which he/she carried out a major independent gainful activity, in a calendar year for the period in which he/she carried out a subsidiary independent gainful activity, if the income from the subsidiary independent gainful activity after deducting expenses reached in the calendar year at least the so-called decisive amount. in a calendar year for the period in which he/she carried out a subsidiary independent gainful activity, if he/she registered for participation in pension insurance. Obligations of a Self-Employed Persons in Social Security System The main obligations of self-employed persons under the social security system include, if the statutory conditions are fulfilled, paying pension insurance premiums and the contribution to the state employment policy and submitting an annual Survey of income and expenses. The period for which the self-employed person was not obliged to pay premiums is not subject to evaluation in terms of entitlement to pension benefits. In addition, the self-employed person must notify the relevant social security administration of the day: of commencing (resuming) an independent gainful activity or co-operation in carrying out an independent gainful activity and to state the date from which he/she is authorized to carry out this activity, and in addition the co-operating person must report the first name, last name, permanent residence and birth number of the self-employed person with whom he/she is co-operating, of terminating an independent gainful activity, of the expiry of an authorization to carry out an independent gainful activity,
from which an independent gainful activity has been suspended, from which he/she is not employed, not entitled to the payment of a invalidity pension and parental allowance, has ceased to personally care for a person under 10 years who is dependent on the care of another person in degree I (light dependency) or for a person who is dependent on the care of another person in degree II (medium dependency) or degree III (heavy dependency) or degree IV (full dependency), is not entitled to the payment of maternity benefits in cash due to pregnancy and delivery, if the entitlement to maternity benefits in cash arises from the employees sickness insurance, has ceased military (community) service, has ceased to be a dependent child, if the origination of these facts had been reported and proven for a subsidiary independent gainful activity. The self-employed person must meet the above obligations at the latest by the eighth day of the calendar month after the month in which the fact establishing this obligation occurs. The local DSSA/PSSA/MSSA depends on the place of permanent residence of the citizen (the self-employed person) or the registered place of residence in the Czech Republic for a foreigner. If the self-employed person s permanent residence, or in the case of a foreigner the registered place of residence, is not in the Czech Republic, the local responsibility depends on where the independent gainful activity is carried out. If the independent gainful activity is carried out in several places then the local responsible DSSA is where the independent gainful activity is predominantly carried out according to a declaration by the natural person concerned. Survey of income and expenses of the self-employed person Any person who carried out an independent gainful activity for at least part of a calendar year must submit to the responsible social security administration a Survey of income and expenses for the calendar year on the prescribed form, at the latest one month after the date by which the person was obliged to submit a tax return for the calendar year pursuant to special legislation. The Survey can be submitted by one of the following methods: by delivering the paper form to the responsible DSSA/PSSA/MSSA the relevant form is available at these offices. The form can also be downloaded from the CSSA web site by electronic submission, the e - Podání. Payment of Premiums The payment of premiums for social security and contributions to the state employment policy is governed by Act No. 589/1992 Coll., on premiums for social security and the contribution to the state employment policy, as amended. The self-employed person pays: pension insurance premiums, advances on premium payments or supplementary premium payments, sickness insurance premiums provided the insured are participating in it voluntarily. Advance Premium Payments The advance premium payment for a calendar month is due from 1 st to 20 th day of the following calendar month. The advance payments are paid for full calendar months and are 29.2 % of the monthly assessment base.
Amounts of advance payments in 2012 Type of independent activity Minimum monthly advance payments Major 1.836,- Subsidiary 735,- The minimum amount of the advance premium payment is determined from the assessment base which equals 50 % of the average monthly income from an independent gainful activity, after deducting expenses, attained in the previous calendar year. A self-employed person who attained the maximum assessment base from employment and reports and proves this fact to the DSSA is not obliged to pay advance premium payments from that month on. Pension Insurance Premiums Pension insurance premiums must be paid by every self-employed person who in the preceding year: carried out a major independent gainful activity, carried out a subsidiary independent gainful activity enough to participate in pension insurance, carried out a subsidiary independent gainful activity and registered to participate in the pension insurance scheme. The self-employed person him/herself determines the amount of the annual assessment base for premium payments. The lowest assessment base is determined as 50% of the tax base (under the Income Tax Act). The minimum assessment base is amended each year by a Decree of the Government and differs for major and subsidiary independent gainful activity. In both cases the months during which the self-employed person was entitled for the whole month to sickness benefits from the sickness insurance scheme for self-employed persons or was granted maternity benefits in cash or carried out military service are not included in this number of calendar months. The maximum (annual) assessment base for self-employed persons for pension insurance premiums and the contribution to the state employment policy is 72 times the average wage. This assessment base for self-employed persons is not reduced by the proportional part. Insurance rates from the assessment base for social insurance in the Czech Republic valid from 1. 1. 2012 Pension State empl. Sickness insurance In total insurance Policy (%) (%) (%) (%) Employer 2,3 21,5 1,2 25 Employee - 6,5-6,5-28 1,2 29,2 Self-employed person 2,3 28 1,2 31,5 from the assessment base
which cannot be lower than double the amount for the participation of employees and will be determined every year (in 2012: 5000,-CZK) A person voluntarily participating in pension instance A foreign employee in accordance with 3 letter q) of the Sickness Insurance Act (voluntary participation) - 28-28 2,3 (voluntary participation) - - 2,3 Alternative periods of insurance An alternative period of insurance is a period in which no insurance premiums are paid, yet these periods are included in the necessary years of insurance for pensions. That applies if the period of insurance lasted at least one year. There are nine alternative periods. Periods of military service, care for a child and care for an incapacitated/dependent person are counted in full; the remaining six periods are included to the extent of 80%. For the purposes of entitlement to an old-age pension all the alternative periods are counted in full if they were amassed before 1.1.2010. Those alternative periods that are reduced to 80% for the purposes of pension size are also reduced to 80% if they were amassed after 31.12.2009. Participation in pension insurance by virtue of an alternative period applies to: persons who are systematically preparing for a future occupation by studying at secondary or higher vocational school (hereinafter secondary school ) or university in the Czech Republic; that applies to the first six years of this study after the attainment of 18 years of age in the period before 2010; persons registered with the labour offices as job-seekers for the period in which they are entitled to unemployment support or retraining support, and to an extent of at most three years also during the period in which they are not entitled to unemployment support and retraining support with the understanding that this three-year period is ascertained retrospectively from the day on which entitlement to a pension was established; the period during which unemployment support or retraining support was not due before the attainment of 55 years of age is included to the extent of at most 1 year; a period of participation in insurance pursuant to Section 6 (1) (a) and Section 2 and a period of gainful activity which, under a special regulation, does not prevent inclusion in the job-seekers register even if this activity establishes participation in insurance, is not included;, disabled persons placed in theoretical and practical preparation for employment or other gainful activity;
persons performing military service in the armed forces of the Czech Republic, excluding professional soldiers and soldiers in further service; persons performing civilian service (up to 2004); persons caring personally for a child aged up to four; persons caring personally for a person under 10 who is dependent on the care of another person in degree I (mild dependency) or a person of any age who is dependent on the care of another person in degree II (medium dependency) or degree III (severe dependency) or degree IV (complete dependency), if they live in the same household; the household condition is not required if the person being cared for is a close relative; recipients of a disability pension for third-degree disability (Section 39 (2) (c) of Act No. 155/1995) out of Czech insurance, applicable up to the age necessary for the establishment of entitlement to an old-age pension pursuant to Section 32; for the purposes of participation in insurance persons who are not receiving a disability pension for third-degree disability (Section 39 (2) (c)) but satisfy the conditions for entitlement to this pension and receive a veteran s allowance or an allowance for service pursuant to special acts are also deemed to be recipients of a disability pension for third-degree disability; persons who, after the termination of gainful activity that established participation in sickness insurance pursuant to a special regulation, remain: - in temporary incapacity for work which they did not bring about deliberately, if this temporary incapacity for work arose at the time of this gainful activity or in the protective period pursuant to a special regulation; - in quarantine ordered pursuant to a special regulation at the time of this gainful activity or in the protective period pursuant to a special regulation; - in the support period for the provision of nursing expenses; - in the support period for the provision of financial assistance in maternity in the period before parturition. These periods are assessed as alternative periods of insurance on the condition that they were amassed in the territory of the Czech Republic and that the period of insurance lasted at least one year. Only for the alternative period of caring for a child under 4 is it not required that the care had to be provided in the Czech Republic. Periods of care Up till 31.12.2006 a period of care for a long-term severely disabled child aged up to 18 requiring extraordinary care (this care also did not have to be provided in the Czech Republic for this period to be an alternative period) and a period of personal care for a largely or completely incapacitated person or partially incapacitated person over 80 were alternative periods. The participation of a person caring for a child under 18 who is long-term severely disabled and requiring extraordinary care and a person caring personally for a largely or completely incapacitated person or partially incapacitated person over 80, provided they live together in the same household, in pension insurance prior to 1 January 2007 is assessed according to the legislation applicable before that date. Up till 30.6.2001 only a period of care for a relative who is a largely or completely incapacitated person or a partially incapacitated person over 80 was an alternative period. Spouses, first-degree relatives (parents, grandparents, children and grandchildren), siblings, sons-in-law and daughters-in-law are deemed close relatives.
Between 1.7.2001 and 31.12.2006 a period of care for a person who is not a close relative was an alternative period of insurance provided that person was largely or completely incapacitated or partially incapacitated and over 80. Unlike care for a close relative, however, this period is only assessed for the period after 30.6.2001 and only in the period in which the carer lived in the same household as the incapacitated person (i.e. constant cohabitation in which the costs of their requirements were paid jointly). A period of care for a dependent person (in degrees II, III or IV, or possibly an under-10 in degree I), care for an incapacitated person (largely, completely, or partially if over 80) and for a long-term severely disabled child requiring extraordinary care up to the age of 18 is proven by a decision of the district (Prague, municipal) social security administration. A decision of the district, Prague or municipal social security administration is also required to prove a man s care for a child under 4, if this care ended by 30.6.2007 at the latest. The decision is issued on the basis of a proposal for the commencement of proceedings for the issuance of a decision on the period and extent of care. Up to 30.6.2007 an application for participation in insurance was submitted (the application was submitted no later than two years after the end of the care, with failure to meet this deadline excluding the applicant) and a proposal for the commencement of proceedings on the issuance of a decision on the period and extent of care was submitted. Since 1.7.2007 only the proposal for the commencement of proceedings is submitted. Since that date submission of the proposal is also bound by a deadline of two years after the care ended. OLD-AGE PENSION In the Czech Republic a citizen is entitled to the award of an old-age pension if he has attained pensionable age and amassed the necessary period of insurance. The age for taking retirement is different for men and women for women it depends on the number of children raised. The necessary period of insurance for receiving old-age pensions has gradually increased since 2010 and its duration for specific insurees depends on the calendar year in which they attained pensionable age. For persons who attained pensionable age in 2012 the necessary period of insurance for entitlement to an old-age pension is at least 28 years; at least 18 years of insurance is enough for persons who in 2012 attained an age at least 5 years higher than the pensionable age of a man of the same date of birth. If you are 65, you become entitled to old-age pension if you have satisfied the conditions for entitlement to disability pension. Old-age Pension Retirement Conditions A condition for entitlement to old-age pension is accumulation of the required period of insurance and attainment of the stipulated age (i.e. retirement age or the age derived therefrom or 65 years of age). On 1 January 2010, Act No. 155/1995 Coll., on pension insurance (the Pension Insurance Act ), was amended. A new retirement age and the new required period of insurance for entitlement to old-age pension were set; changes were also made to the pension amount. The age of retirement also increased, taking effect from 30 September 2011.
In addition to the entitlement to old-age pension prior to reaching retirement age (Section 32 of the Pension Insurance Act), the regulation differentiates between entitlements to old-age pension in accordance with the following provisions: Section 29(1) of the Pension Insurance Act (old-age pension upon reaching retirement age) Section 29(2) of the Pension Insurance Act (so-called proportional old-age pension) Section 29(3) of the Pension Insurance Act (old-age pension upon accumulating 30 years of insurance) Section 29(4) of the Pension Insurance Act (old-age pension upon fulfilling the conditions for entitlement to a disability pension). Retirement age a) For insured individuals born prior to 1936 The retirement age for men is 60 years old The retirement age for women is: 53 years old, if at least 5 children were raised 54 years old, if at least 3 or 4 children were raised 55 years old, if at least 2 children were raised 56 years old, if at least 1 child was raised 57 years old b) For insured individuals born between 1936 and 1977 Year of birth 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945 1946 1947 1948 1949 1950 1951 1952 1953 1954 men 60y+2m 60y+4m 60y+6m 60y+8m 60y+10m 61y 61y+2m 61y+4m 61y+6m 61y+8m 61y+10m 62y 62y+2m 62y+4m 62y+6m 62y+8m 62y+10m 63y 63y+2m Retirement age for women who raised the following number of children 0 1 2 3-4 5 or more 57y 57y 57y 57y+4m 57y+8m 58y 58y+4m 58y+8m 59y 59y+4m 59y+8m 60y 60y+4m 60y+8m 61y 61y+4m 61y+8m 62y 62y+4m 56y 56y 56y 56y 56y+4m 56y+8m 57y 57y+4m 57y+8m 58y 58y+4m 58y+8m 59y 59y+4m 59y+8m 60y 60y+4m 60y+8m 61y 55y 55y 55y 55y 55y 55y+4m 55y+8m 56y 56y+4m 56y+8m 57y 57y+4m 57y+8m 58y 58y+4m 58y+8m 59y 59y+4m 59y+8m 54y 54y 54y 54y 54y 54y 54y+4m 54y+8m 55y 55y+4m 55y+8m 56y 56y+4m 56y+8m 57y 57y+4m 57y+8m 58y 58y+4m 53y 53y 53y 53y 53y 53y 53y 53y+4m 53y+8m 54y 54y+4m 54y+8m 55y 55y+4m 55y+8m 56y 56y+4m 56y+8m 57y
1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 63y+4m 63y+6m 63y+8m 63y+10m 64y 64y+2m 64y+4m 64y+6m 64y+8m 64y+10m 65y 65y+2m 65y+4m 65y+6m 65y+8m 65y+10m 66y 66y+2m 66y+4m 66y+6m 66y+8m 66y+10m 67y 62y+8m 63y+2m 63y+8m 63y+10m 64y 64y+2m 64y+4m 64y+6m 64y+8m 64y+10m 65y 65y+2m 65y+4m 65y+6m 65y+8m 65y+10m 66y 66y+2m 66y+4m 66y+6m 66y+8m 66y+10m 67y 61y+4m 61y+8m 62y+2m 62y+8m 63y+2m 63y+8m 64y+2m 64y+6m 64y+8m 64y+10m 65y 65y+2m 65y+4m 65y+6m 65y+8m 65y+10m 66y 66y+2m 66y+4m 66y+6m 66y+8m 66y+10m 67y 60y 60y+4m 60y+8m 61y+2m 61y+8m 62y+2m 62y+8m 63y+2m 63y+8m 64y+2m 64y+8m 65y+2m 65y+4m 65y+6m 65y+8m 65y+10m 66y 66y+2m 66y+4m 66y+6m 66y+8m 66y+10m 67y 58y+8m 59y 59y+4m 59y+8m 60y+2m 60y+8m 61y+2m 61y+8m 62y+2m 62y+8m 63+2my 63y+8m 64y+2m 64y+8m 65y+2m 65y+8m 66y 66y+2m 66y+4m 66y+6m 66y+8m 66y+10m 67y 57y+4m 57y+8m 58y 58y+4m 58y+8m 59y+2m 59y+8m 60y+2m 60y+8m 61y+2m 61y+8m 62y+2m 62y+8m 63y+2m 63y+8m 64y+2m 64y+8m 65y+2m 65y+8m 66y+2m 66y+8m 66y+10m 67y c) for insured individuals born after 1977 - the number of calendar months that equals twice the difference between the year of birth and 1977 is added to the age of 67 years. d) for insured individuals who worked in category I employment for the stipulated period and members of the resistance - the manner of determining the age for entering into old-age retirement remains unchanged. For these groups of insured, the age limit stipulated by regulations valid prior to 1 January 1996 remains valid. Old-age pension upon reaching retirement age [Section 29(1) of the Pension Insurance Act] The required period of insurance gradually increases depending on the retirement age of the insured individual or the age of the insured individual. The necessary period for entitlement to old-age pension under Section 29(1) of the Pension Insurance Act amounts to:
Retirement age reached Required period of insurance: before 2010 25 years in 2010 26 years in 2011 27 years in 2012 28 years in 2013 29 years in 2014 30 years in 2015 31 years in 2016 32 years in 2017 33 years in 2018 34 years after 2018 35 years To ascertain the required period of insurance, only the year when one reaches retirement age is decisive. Insured individuals who have not accumulated the required period of insurance on the day that they reach retirement age will not receive an old-age pension on such date. Only after they accumulate the required period of insurance will they be able to receive an old-age pension. Proportional old-age pension [Section 29(2) of the Pension Insurance Act] In the event that insured individuals are not entitled to old-age pension under Section 29(1), they shall be entitled to old-age pension under Section 29(2) of the Pension Insurance Act, provided their accumulated period of insurance is at least: 15 years and they attain at least 65 years of age prior to 2010 16 years and, in 2010, they are at least 5 years older than the retirement age stipulated under Section 32 of the Pension Insurance Act for men of the same date of birth 17 years and, in 2011, they are at least 5 years older than the retirement age stipulated under Section 32 of the Pension Insurance Act for men of the same date of birth 18 years and, in 2012, they are at least 5 years older than the retirement age stipulated under Section 32 of the Pension Insurance Act for men of the same date of birth 19 years and, in 2013, they are at least 5 years older than the retirement age stipulated under Section 32 of the Pension Insurance Act for men of the same date of birth 20 years and, after 2013, they are at least 5 years older than the retirement age stipulated under Section 32 of the Pension Insurance Act for men of the same date of birth. Old-age pension upon amassing 30 years of insurance [Section 29(3) of the Pension Insurance Act] The entitlement to old-age pension arises for insured individuals who attain retirement age after 2014 and accumulated at least 30 years of insurance, provided they did not fulfil the conditions of Section 29(1) of the Pension Insurance Act; in this case, notionally credited periods of insurance shall not be included in the insurance period. Old-age pension upon fulfilling the conditions for entitled to disability pension [Section 29(4) of the Pension Insurance Act]
Insured individuals who attain 65 years of age and failed to accumulate the required period of insurance to be entitled to an old-age pension under Section 29(1), (2) or (3) of the Pension Insurance Act shall also be entitled to an old-age pension if they became disabled (regardless of the degree of disability) and accumulated the necessary period of insurance for entitlement to a disability pension or became disabled due to a work-related injury. Recognition of insurance under Section 29(4) of the Pension Insurance Act does not prevent establishment of the entitlement to an old-age pension under Section 29(1), (2), (3) of the Pension Insurance Act. Amount of old-age pension recognised under Section 29(1), (2), (3) of the Pension Insurance Act The manner of determination of the old-age pension amount remains the same for insured individuals who do not raise the percentage assessment of pension through gainful activity after becoming entitled to a pension. The amount of the basic assessment in 2012 amounts to CZK 2 270, the amount of the percentage assessment amounts to 1.5% of the calculation basis for each whole year of insurance, but at least CZK 770 per month. Amount of old-age pension recognised under Section 29(4) of the Pension Insurance Act The amount of the percentage assessment of this pension is determined in the same way that the amount of the percentage assessment for disability pensions is determined, and for each year of insurance amounts to: 0.5% of the calculation basis in the case of first degree disability. 0.75% of the calculation basis in the case of second degree disability. 1.5% of the calculation basis in the case of third degree disability. In 2012, the amount of the basic assessment of this type of old-age pension amounts to CZK 2 270 per month; the amount of the percentage assessment may not be lower than CZK 770 per month. Even if the degree of disability changes for the individuals receiving this pension, the old-age pension is not recalculated and will continue to be paid out in the same amount. The mentioned type of old-age pension shall not increase over the period of gainful activity after the establishment of the entitlement to this pension. Concurrence of payments of old-age pension recognised under Section 29 of the Pension Insurance Act with income from gainful aktivity As of 31 December 2009, insured individuals may, after being recognised an old-age pension under Section 29 of the Pension Insurance Act, work and collect their old-age pension in the full amount regardless of the type and scope of the gainful activity carried out. In addition to this possibility, individuals receiving an old-age pension have the possibility to request that only half of the old-age pension be paid out while carrying out gainful activity. Conditions for the entitlement to an early old-age pension
The basic condition that has to be fulfilled is accumulation of the required period of insurance, i.e., the period of insurance set out in Section 29(1) or (3) of the Pension Insurance Act. The entitlement to this pension then depends on reaching the age of retirement: If the age of retirement of the insured individual is at least 63 years old, the entitlement arises no earlier than upon reaching at least 60 years of age, or If the age of retirement of the insured individual is less than 63 years old, the entitlement to an early old-age pension arises no earlier than on the day from which no more than three years remain until retirement age is reached. It continues to apply that this pension cannot be recognised earlier than as of the day of filing of the application for this pension, with the date of establishment of the entitlement being deemed the day from which it is recognised and, in the case of recognition of early retirement, the entitlement to old-age pension under Section 29 of the Pension Insurance Act does not arise. New changes in pension insurance take effect from 1 January 2012: the change in the reduction in early retirement pensions means a more pronounced reduction in the percentage assessment of early retirement pensions for citizens who take early retirement more than 360 calendar days early, i.e. where the earliness is greater than 360 days. The amount of the percentage assessment of early retirement pensions is reduced by a particular percentage for each commenced 90 calendar day period from the period from the day from which early retirement pension is awarded until retirement age is reached. In practice this means that the amount of the percentage assessment of early retirement pension will now be reduced for the period from the 361 st to the 720 nd calendar day by 1.2% of the calculation base (the reduction in the period up to 360 calendar days and after the 721 st calendar day remains unchanged). Entitlement to early retirement pension is predicated on acquiring the necessary insured period for eligibility for regular old-age pension and reaching an age at which there are 3 years to go until regular pension age is reached if the citizen s retirement age is lower than 63 or 5 years to go if the citizen s retirement age is at least 63 years and the citizen has reached the age of at least 60. Calculators giving a guideline calculation of pensions can be found on the web site of the Ministry of Labour and Social Affairs: http://www.mpsv.cz./cs/2435. Example of the calculation of early retirement pension awarded from a date falling within the period: from 1.1.2012 The insured person applied for the award of early retirement pension 910 days before he reached retirement age, so for the first 360 days the pension is reduced by 4 x 0.9% of the calculation base, i.e. by 3.6% of the calculation base; for the 361 st to the 720 th day the percentage assessment is reduced by 4 x 1.2% of the calculation base, i.e. by 4.8% of the calculation base; and for the remaining 190 days the percentage assessment is reduced by 3 x 1.5% of the calculation base, i.e. by 4.5% of the calculation. The overall reduction in the percentage assessment is therefore 12.9% of the calculation base. up to 31.12.2011 The insured person applied for the award of early retirement pension 910 days before he reached retirement age, so for the first 720 days the pension is reduced by 8 x 0.9% of the calculation base, i.e. by 7.2% of the calculation base; and for the remaining 190 days the percentage assessment is reduced by 3 x 1.5% of the calculation base, i.e. by 4.5% of the
calculation. The overall reduction in the percentage assessment is therefore 11.7% of the calculation base. Transformation of full disability pension, partial disability pension and disability pension into old-age pension and the amount thereof Conditions for the transformation: 1) Receipt of full disability pension or partial disability pension and reaching 65 years of age prior to 1 January 2010 If individuals receiving full disability or partial disability pension reach 65 years of age prior to 1 January 2010, they lose entitlement to full disability or partial disability pension on 1 January 2010 and, at the same time, they become entitled to old-age pension in the amount of the hitherto paid out full disability or partial disability pension. 2) Receipt of disability pension (regardless of the degree of disability) and reaching 65 years of age after 31 December 2009 On the day that individuals receiving the disability pension reach 65 years of age after 31 December 2009, they lose entitlement to disability pension and, at the same time, they become entitled to old-age pension in the amount of the hitherto paid out disability pension. A decision has to be issued to those individuals receiving a disability pension that they will be entitled to an old-age pension instead of a disability pension of the first, second or third degree. Decisive at all times is the amount of the full or partial disability insurance as of 31 December 2009 in the case of individuals who reached 65 years of age prior to 1 January 2010 (point 1), or the amount of the disability pension as at the date of reaching 65 years of age after 31 December 2009 (point 2); any change in the degree of disability no longer has any impact on the amount of the old-age pension paid out. This old-age pension shall not increase while individuals are involved in gainful activity after their entitlement to this pension has been established. The entitlement to this old-age pension does not preclude the entitlement to old-age pension under Section 29 of the Pension Insurance Act. Concurrence Concurrence of entitlements to pensions and their payment If the conditions for entitlement to receipt of more than one pension of the same kind or for receipt of old-age and disability pensions are simultaneously satisfied, only one pension, the larger one, is paid. That does not apply, however, in the case of entitlement to orphans pension following the death of two parents. If the conditions for entitlement to old-age and disability pensions of the same amount are simultaneously satisfied, the pension chosen by the insuree is paid. On the day on which payments of pensions are modified on the grounds of concurrence, entitlements to the pensions that are not paid expire. If the conditions for entitlement to receipt of an old-age pension or disability pension and receipt of a widows or widowers pension, or orphans pension, are simultaneously satisfied,
the largest pension is paid in full, including the basic assessment, and half of the proportional assessment is paid from the other pensions. Concurrence of old-age pension and income from gainful activity With effect from 1.1.2010 entitlement to an old-age pension awarded pursuant to Section 29 of Act No. 155/1995, on pension insurance, is no longer conditional on the conclusion of a labourlaw relationship for a fixed period not exceeding one year. After 31.12.2009 the insuree can thus collect this old-age pension in full regardless of what gainful activity he performs and the extent to which he performs it. Besides this option, the recipient of this old-age pension can opt for the payment of half the old-age pension while performing gainful activity. Concurrence of old-age pension awarded before attainment of pensionable age and income from gainful activity If the recipient of an old-age pension awarded before the attainment of pensionable age pursuant to Section 31 of Act No. 155/1995, on pension insurance, performs gainful activity or receives unemployment support or retraining support, he is not entitled to receive this pension until he attains pensionable age. From the date on which pensionable age is attained the conditions for payment of the old-age pension are assessed in the equivalent manner to old-age pensions awarded pursuant to Section 29 of Act No. 155/1995, on pension insurance. The performance of gainful activity abroad has no influence on the payment of old-age pensions before the attainment of pensionable age, unless an international treaty on social security states otherwise. Treaties with Montenegro and Serbia, the United States of America and Korea are such international treaties. That means that there is no entitlement to payment of an old-age pension before the attainment of pensionable age when performing gainful activity in these countries. Calculation of pensions Pensions consist of two components, the basic assessment defined as a fixed sum now CZK 2,230 per month and a proportional assessment defined individually by a percentage rate from the calculation base depending on the amassed period of insurance. Calculation and assessment base The calculation base is defined by reducing the personal assessment base, which is a monthly average of the sum of the insureee s annual assessment bases for the determinative period. The sum of assessment bases (put simply, earnings) for an individual calendar year of the determinative period multiplied by the growth period of the universal assessment base is deemed to be the insuree s annual assessment base. For the period after 31.12.1995 the assessment base for determining insurance contributions for social insurance and the contribution to state employment policy is the assessment base; for the period prior to 1.1.1996 gross earnings defined for the purposes of pension security are the assessment base. Determinative period With effect from 30.9.2011 the determinative period is no longer restricted to 30 calendar years. It will continue to start in the calendar year immediately following the year in which the insuree turned 18, but it will end in the calendar year immediately preceding the year in which
the pension is awarded. It continues to apply that years before 1986 are not included in the determinative period, so this change will only affect pensions awarded after 2016. Reduction of the personal assessment base The reduction amounts for calculating pensions in 2012 are defined as follows: up to CZK 11,061 from CZK 11,061 to CZK 29,159 from CZK 29,159 to CZK 100,548 over CZK 100,548 full inclusion 28% inclusion 16% inclusion 8% inclusion Excluded periods Under Section 16 (4) (a) to (j) of the act on pension insurance, after 31. 12. 1995 the following periods are excluded periods: a) temporary incapacity for work which the insuree did not cause deliberately, provided that the temporary incapacity for work arose at the latest on the last day of the protective period pursuant to the act on sickness insurance, periods of quarantine ordered pursuant to the act on the protection of public health, periods in which nursing or care for a child aged under 10 or another household member pursuant to the act on sickness insurance was required, except in the case of persons who are not entitled to nursing expenses, but at most for the first 9 calendar days of the need for nursing care or care, or possibly the first 16 calendar days in the case of a unmarried employee who is caring for at least one child under 16 who has not completed compulsory schooling, and periods before parturition during which gainful activity was not conducted on the grounds of pregnancy, but at the earliest from the start of the eighth week before the expected date of birth which immediately preceded the date of parturition; b) the receipt of a disability pension for third-degree disability, or possibly full disability pension, or the receipt of old-age pension; the payment of equivalent pensions from a foreign insurer is also deemed to be the receipt of such pensions; c) periods in which the insuree was a payer of insurance contributions for insurance, if the amount of his assessment bases cannot be ascertained; d) the performance of military service in the armed forces of the Czech Republic, except in the case of professional soldiers and soldiers in further service, and the performance of civilian service; e) participation in insurance of persons caring for a child under 4 or a person dependent on the care of another individual in degrees II to IV (or degree I in the case of a person under 10); f) study up to 31.12.2009 referred to in Section 5 (1) (m) of the act on pension insurance and, in the case of the determination of the personal assessment base for calculating disability pension, also periods of systematic preparation for a future occupation through study at a secondary school or university in the Czech Republic, applicable for the first 6 years of this study after the attainment of 18 years of age. With effect from 30.9.2011 the period of study after 31.12.2009 is an excluded period regardless of the type of pension; g) participation in insurance of persons referred to in Section 5 (1) (n) (persons registered by the labour offices as job-seekers);
h) theoretical and practical preparation for employment or other gainful activity by a person with a disability; i) the period from the day on which a pension is awarded to the end of the year in which the pension is awarded in the cases referred to in Section 18 (2) and (3) and the period before the attainment of 18 years of age in the cases referred to in Section 18 (2); j) periods in which lower wages than were due were paid pursuant to the act on the protection of employees in the event of the employer s insolvency and amending certain acts; k) periods in which in the case referred to in Section 11 (2), sixth sentence, there was no compensation for wages, pay or other income that can be included in the assessment base for determining insurance contributions pursuant to a special act and awarded by a court; That is on the assumption that these periods do not overlap with the period of insurance in which the insuree had incomes that are included in the assessment base for determining the size of insurance contributions for social security and the state employment policy. Pension calculators Calculators (pension and age calculators) for a guideline calculation of old-age pension can be found on the Ministry of Labour and Social Affairs web site www.mpsv.cz. Pension applications Pension applications may be submitted by an authorised citizen or his representative under power of attorney. It must be clear from the power of attorney that the empowerment covers the submission of a pension application. As the empowered representative must state and sign on the applicant s behalf certain fundamental declarations and information (e.g. about raising minors, receipt of sickness benefits, periods of time worked after completing compulsory schooling, alternative periods of insurance), which he might not have detailed knowledge of, pension applicants should be represented when making out applications only in exceptional cases. If the future pensioner cannot submit an application himself due to poor health, the application may be made out on his behalf by a family member, without power of attorney having to be presented. The family member must, however, present the consent of the authorised person to the submission of the pension application and a doctor s confirmation that his health disorder is serious enough to prevent him making out the application. The Czech Social Security Administration is competent for a decision about entitlement and amount of a benefit. The entitlement examined after submitting an application on a prescribed form at the locally competent District Social Security Administration OSSZ/PSSZ/MSSZ pursuant to the place of the applicant s permanent residence. With an applicant who does not have a permanent residence in the Czech Republic, any OSSZ/PSSZ/MSSZ fills in the Czech Republic in the application. The following benefits are provided from pension insurance if the determined conditions are fulfilled: old-age pension invalidity pension widow s and widower s pension orphan s pension.
Objection proceedings in matters of pension insurance Written objections may be lodged against a decision by a social security authority in matters of pension insurance announced after 31. 12. 2009 within 30 days from the day on which it was announced to the participant in the proceedings. Objections may be lodged with the authority that issued the decision, i.e. with the Czech Social Security Administration or any district social security administration (district, Prague, municipal). The Czech Social Security Administration decides on the objections, and may decide against the participant in the proceedings. The lodging of objections is a standard remedial measure in administrative proceedings undergoing objection proceedings, whether successful or unsuccessful, is therefore an essential requirement for the matter to be dealt with subsequently by a court under an administrative action. Administrative court actions may be lodged with the local regional court (in the case of Prague the Municipal Court in Prague) within two months after the day on which the decision on objections is announced. Since 1.1.2012 it no longer applies that the effects of an action lodged in good time are preserved if the action was lodged with the Czech Social Security Administration. Payment of pensions Pensions are paid to an authorised recipient or his representative or a special recipient. When submitting an application for a pension insurance benefit the citizen chooses how the pension is to be paid; he can apply to the Czech Social Security Administration for a different payment method at any time. Pensions are paid out either in cash through Czech post offices to the address of permanent or temporary residence or by bank transfer to the client s bank account. The Czech Social Security Administration also arranges for pensions to be paid to social care institutions with all-year residence. With effect from 1. 1. 2010 the new legislation obliges recipients of pensions paid out in cash through Czech post offices to pay the pension payer s costs for remittances of pension instalments paid at regular intervals. This obligation does not apply to recipients of pensions who were awarded the pension before 1. 1. 2010 and who have been continuously entitled to at least one pension since 31. 12. 2009 (e.g. widows and, since 31. 12. 2009, old-age pension). These costs amounted to CZK 21 per pension instalment in 2010. This amount is deducted in advance from the total instalment, which is subsequently remitted to the pensioner minus the deducted amount. Conditions for Paying out of Pension Benefits to Persons with a Permanent Place of Residence Outside the Czech Republic All payments of pension benefits are made through the Czech National Bank in Prague (hereinafter as CNB) and its contractual partners its correspondent banks. The payments of pension benefits by cheque to an address of a pensioner in a foreign country are made 4x in a year, each time as a part payment for a respective quarter in March, June, September and December of each calendar year.the conditions for eligibility to pension benefits are verified 1x per year according to the information provided in the form Certificate of living which the Czech Social Security Administration (CSSA) automatically sends to the address of a pensioner in the respective foreign country in December of each calendar year. The period for returning the filled-in form signed by a beneficiary is 30 calendar days from the day of its delivery to the beneficiary.
The payments of pension benefits to accounts at financial institutions (banks) in a foreign country are made through non-cash payment system. The conditions for eligibility to pension benefits are verified according to the information provided in the form Certificate of living. A payment of pension to the account of a beneficiary is always made only after the filled-in Certificate of living had been received, always for a particular past period and only until the end of the month in which the Certificate of living had been filled-in, dated and signed by the beneficiary (his/her signature must be certified in this case). A beneficiary submits the Certificate of living without notice of CSSA and in time intervals determined by him/her. The frequency of sending is not limited and a quarterly, biannual or other frequency can be accepted; we recommend sending it 1 x yearly at least. For the bank accounts in EUR in the EU states it is necessary to specify a beneficiary s account number in the international standard IBAN as well as BIC code for SWIFT for the states outside EU the following must be specified an account number of a beneficiary, name of the bank and its full address, and currency of the account for payments of pension benefits to Bulgaria we recommend transferring the benefits directly to a beneficiary s account, because when cashing a cheque, the Bulgarian banks charge fees that might in many cases be higher than the pension benefits in many states there are problems with crediting the pension benefits, because a client does not specify a name of the account, i.e. a name of the owner The payments of pension benefits to an account maintained at a financial institution (bank) in the Czech Republic are made in the Czech currency (CZK) with a beneficiary being obliged to submit the Certificate of living. The procedure for making payments and submitting the Certificate of living is the same as with paying out pension benefits to accounts maintained at financial institutions abroad. The payments of pension benefits to Poland are made monthly by an international money order in zloty through the Polish Post. Monthly payments of pension benefits are delivered always in the first half of a respective calendar month for which the benefits shall be paid out. It is not necessary to submit the Certificate of living for this method of paying out pension benefits. The payments of pensions to the Slovak Republic are made regularly once in a month, remitted between the 22 nd and 26 th day of a month to CNB and credited to accounts of the clients within 5 working days. The conditions for eligibility to pension benefits are verified 4x yearly according to the information provided in the form Certificate of living which CSSA automatically sends to the address of a pension beneficiary in February, May, August, and November of a calendar year. The period for returning the filled-in form signed by a beneficiary is 30 calendar days from the day of its delivery to the beneficiary. If a beneficiary stays at a different place than at his/her permanent residence address, he/she is obliged to send the certified form Certificate of living without notification and in the respective months specified above. In the application for payments of pension benefits to a bank account in Bulgaria, it is necessary to specify an account number in the international standard IBAN, BIC code of the bank for SWIFT and a full name of the account owner. The conditions for eligibility to pension benefits are verified according to the information provided in the form Certificate of living which CSSA automatically sends to the address of a pension beneficiary at the beginning of March, June, September, and December. And a certified Certificate of living must be
returned in these specified months as well. Pension benefits are paid out regularly once in a quarter of a year during April, July, October, and January of the following year. Change of date of award With effect form 1 January 2007 an authorised person may, within 30 days from the day on which the Czech Social Security Administration s decision is announced, apply in writing for a change of the date of: the award of pension or payment thereof; a person may submit such an application at most twice in the case of the award of one and the same pension; the release of payment of old-age pension or the arrangement of the payment of old-age pension which was not arranged from the day on which this pension was awarded; a person may submit such an application just once after this release or arrangement of payment. Regular adjustment (valorisation) of pensions - Paid out pensions are increased depending on the growth of the consumer price index and wage growth - Regular term basic and percentage assessments of paid out pensions are increased from premiums payable in January - Extraordinary term percentage assessment of paid out pensions are increased outside the regular term if, in the period for ascertaining price growth, prices growth was at least 5%; the paid out pensions will not be increased until the fifth calendar month following the month in which the price growth reached at least 5 % - With respect to the amount of the basic assessment of paid out pensions, the rule of 9 % of average wage has to be observed; the increase thus will amount to the difference up to this amount (rounded up to whole ten crowns) - Percentage assessment of paid out pensions shall, in connection with an increase during a regular term, increase by a percentage that will ensure that, in the case of an average oldage pension, the sum of the amount of the increase of the basic assessment and the amount of the increase of the percentage assessment correspond to the increase of the average oldage pension stipulated in the amount of the sum of the price growth (price growth is determined as the percentage growth of the consumer price index in the specified period) and one third of the growth of real wages - Percentage assessments of paid out pensions shall increase in connection with an increase during an extraordinary term by a percent that corresponds to price growth. - Average old-age pension is ascertained according to data from the CSSA as an average amount of all old-age pensions paid out in the last month of the period for ascertaining price growth - In the case of increasing pensions in the regular term, the increase in pension is stipulated by 30 September of the calendar year that precedes by one year the calendar year in which the regular term for increasing pensions falls - If an increase in pensions occurs in an extraordinary term, the pension increase is stipulated within 50 days of the last day of the calendar month in which price growth attained at least 5 %. 2.2 Survivor pensions Survivors pensions are widows /widowers pension and orphans pension.
Widow s and Widower s Pension Widow s pension is granted in case of a husband s death. Widower s pension is granted in case of a wife s death. A widow (widower) is entitled to a widow s (widower s) pension if her husband (his wife) received a pension or fulfilled the insurance period condition required for an entitlement to a full disability or old-age pension on the date of his (her) death. The conditions for the eligibility for a widow s or widower s pension one year after the death of a spouse are as follows: caring for a dependent child, caring for a child who is dependent on another person s care with grade II (medium dependency), grade III (heavy dependency) or grade IV (full dependency) dependency, caring for the individual s own parent or the parent of the deceased spouse who lives in the same household and is dependent on another person s care with grade II (medium dependency), grade III (heavy dependency) or grade IV (full dependency) dependency grade 3 disability reaching an age of at least 4 years below the retirement age for a man of the same date of birth determined in accordance with section 32 of Pension Insurance Act no. 155/95 Coll. or reaching the retirement age, if the retirement age is lower. From 1 January 2012, the period in which the entitlement to a pension arises again when these conditions are met is reduced from 5 years to 2 years from the previous expiration of the entitlement to a widow s or widower s pension. If entitlement to a widow s or widower s pension arises prior to 1 January 2012, the 5-year period applies to the new entitlement to such pension; the deciding factor is not when the entitlement to a widow s or widower s pension expired, i.e., whether it terminated prior to 1 January 2012 or later. If, however, entitlement to a widow s or widower s pension arises again after 31 December 2011 (within the 5-year period) and this entitlement again expires, the 2-year period applies to the new entitlement to a widow s or widower s pension. Orphan s Pension Orphan s pension is granted only to a dependent child in the case of death of his/her parent (event. adoptive parent) or to a person who substitutes parental care and supported a child at the time of the parent s death because of impossibility of performance for substantial reasons.at the same time the deceased must be a beneficiary of an old-age, disability pension on the date of his/her death or must fulfil the condition of the insurance period for a disability pension or for an old-age pension on the date of his/her death or he/she died due to a work accident. From 1 January 2012, all that is required for eligibility for an orphan s pension is that, on the day of death, the deceased had accrued at least half the insured period necessary for eligibility for invalidity pension. Subject to fulfilment of the above-mentioned conditions an orphan who lost both parents is entitled to an orphan s pension after each of his/her parents or to the person substituting parental care and supporting a child at the time of the parents death because of impossibility of performance for substantial reasons.
From 1 January 2012 an orphan s pension is awarded after the death of a person who has taken a child into his/her care only if the child was taken by the deceased, before the death of the deceased, into care substituting parental care (based on a court decision on the placing of a child in care or in the joint care of a married couple). For the purposes of entitlement to an orphan s pension, a dependent child is a child before completion of his/her compulsory school attendance or after the completion up to the age of 26 if the child Prepares systematically for his/her future careers; Is unable to prepare systematically for his/her future careers or to carry out a gainful activity due to an illness or injury; or Is unable to carry out a permanent gainful activity due to his/her long-lasting unfavourable health condition. 2.3 Disability pensions A citizen who is disabled in any of the three degrees of disability and has amassed the necessary period of insurance is entitled to a disability pension. The condition of the necessary period of insurance is not required if the disability came about as a result of a work injury (occupational illness). With effect form 1.1.2010 there have been fundamental changes in the assessment of entitlements to pensions conditional on long-term poor health and in the way the amounts are determined. The main change is the new definition of disability, consisting in the introduction of three degrees of disability instead of full and partial disability. In connection with this change full disability pension and partial disability pension were replaced by disability pensions of the first, second and third degrees; their amounts depend on an ascertainment of the degree of disability. In the case of insurees aged over 38, the conditions for amassing the necessary period of insurance for entitlement to disability pension are relaxed and there were also changes in the determination of additionally calculated periods and in the way their extent is assessed. Another change is the introduction of an age limit for the establishment of entitlement to a disability pension and its continuance. The following are the periods of insurance required for various ages of insurees for the award of a disability pension: less than 1 year for those aged up to 20; 1 year for those aged 20 to 22; 2 years for those aged 22 to 24; 3 years for those aged 24 to 26; 4 years for those aged 26 to 28; 5 years for those over 28. The necessary period of insurance for entitlement to disability pension is ascertained from the period before the disability arose, and if the insuree is over 28 years of age, from the last ten years before the disability arose. In the case of an insuree aged over 38, the condition of the period of insurance necessary for entitlement to disability pension is also deemed satisfied if this period was amassed during the last 20 years before the disability arose; the necessary period of insurance is in that case 10 years. The condition of the period of insurance necessary for entitlement to disability pension is also deemed satisfied if this period was amassed in any
ten-year period completed after the disability arose; in the case of an insuree younger than 24 the necessary period of insurance is in that case two years. The determinative date for the valorisation increase in disability pension is the date from which the disability pension was awarded, regardless of whether there were subsequently changes in the amount on the grounds of a change in the degree of disability. Conditions for entitlement to invalid benefit An insured individual who meets the following conditions is entitled to invalid benefit: a) not yet reached the age of 65 Once an insured individual reaches the age of 65 the individual is not entitled to an invalid s benefit if this age is reached after 31. 12. 2009. After this date, an insured individual cannot be awarded an invalid s benefit from the age of 65, even if the insured individual becomes an invalid because of an occupational illness or a work accident. If the recipient of an invalid s benefit reaches the age of 65 after 31. 12. 2009, the invalid s benefit will change to an old age pension from the age of 65. b) an invalid with stage one, two or three invalidity The new legislation no longer differentiates between full and partial invalidity. Invalidity is now defined as a decrease in work ability that occurs because of a long-term unfavourable state of health to the extent of at least 35%. The Pension Insurance Act now differentiates between three stages of invalidity according to the degree of the decrease in work ability. If the insured individual s work ability decreases: by at least 35%, but not more than 49%, this is stage one invalidity by at least 50%, but not more than 69%, this is stage two invalidity by at least 70%, this is stage three invalidity c) has the necessary period of insurance or if the invalidity arises because of a work accident or an occupational illness The necessary insurance period and the method of ascertaining it has not essentially changed. However, now insured individuals who are older than 38 and do not meet the condition of five years of insurance in the last ten years before the invalidity occurred, the necessary insurance period condition will also be considered as met, if the insured individual has ten years of insurance in the last twenty years before the invalidity occurred (the provisions that the necessary period can be in any period after the invalidity occurred in a period of twenty years does not apply, i.e. the period of insurance up to when the invalidity occurred is the only deciding factor to meet this condition). If the insured individual is older than 38, it is first ascertained whether the insured individual meets the condition of five years in the last ten years before the invalidity occurred, then it is ascertained whether the insured individual meets the condition of ten years in the last twenty years before the invalidity occurred and if this condition is not met, it is ascertained whether the insured individual meets
the condition of five years in the last ten years before the invalidity occurred in any completed ten years after the invalidity occurred. d) has not met the conditions for an old age pension according to the provisions of section 29 of the Pension Insurance Act If the conditions for entitlement to an old age pension according to the provisions of section 29 of the Pension Insurance Act are met, the insured individual is only entitled to an invalid s benefit if the insured individual has become an invalid because of a work accident (an occupational illness). e) has not yet reached pension age, if he/she has been awarded an old age pension according to the provisions of section 31 of the Pension Insurance Act (i.e. an old age pension prior to reaching the pension age) an insured individual is not entitled to an invalid s benefit if the individual has been awarded an old age pension according to the provisions of section 31 of the Pension Insurance Act and has already reached the pension age on the day the invalidity occurs, provided the invalidity is not the result of a work injury (occupational illness). 2.4. Unemployment benefits (max 10 pages) i) institution(s) involved Institutions involved into the unemployment benefits administration is according the Labour Office Act No 73/2011 Coll the Labour Office of the Czech Republic (Úřad práce Česká republika). This Act is valid from 1.4.2011. The Labour Office CR is constituted from the Directorate General which is located in Prague and 14 Regional Offices. There is a number of so called contact Labour Offices under each Regional Office. Regional Office capital city of Prague Regional Office Příbram Regional Office České Budějovice Regional Office Plzeň Regional Office Karlovy Vary Regional Office Ústí nad Labem Regional Office Liberec Regional Office Hradec Králové Regional Office Pardubice Regional Office Jihlava Regional Office Brno Regional Office Olomouc Regional Office Ostrava Regional Office Zlín More information can be obtain at the following address: www.portal.mpsv.cz/upcr. Example: If the claiming person is living within the capital city e.g. at Prague 2, the relevant office is for he/she contact Labour Office Prague 2 of the Regional Office of the capital city of Prague. For this moment is the current residency address very relevant. Within the respective contact Labour Offices 2 forms must be completed. First one is Žádost o podoru v nezaměstnanosti which is the claim for the unemployment benefits. The second one is Žádost o zprostředkování zaměstnání which is the declaration the the claiming person is
searching for the job. On this form the claiming person has to provide an information about type of work he/she is looking for and it is listed on the jobseekers register. Labour Office cooperates with employers and keeps a database of open positions which you can apply for. The citizen (or a foreign national enjoying the same position as a Czech citizen) applying for mediation of employment must attach a certificate verifying his/her identity, citizenship and permanent residence to the application. In addition, he/she must present self-employment or studies, documents on his/her professional skills (school-leaving exam, traineeship certificate, diploma etc.); persons taking care of minors must in addition present the birth certificates of their children, persons with disabilities must present a medical report or a decision on a changed working capacity or a decision on disability pension. At the same time the labour Office will asks also for other documents: Ukončení pracovního poměru Contract termination, it confirms the mason for the termination and the date of the termination of employment; Potvrzení o zaměstnání Employment confirmation, it confirms the period of time the person Works at the previous position. For the purposes of Employment confirmation it includes the duration of: - studies in the Czech Republic, - preparations by a citizen with limited working capacity for a job (in the Czech Republic), - personal care of a child aged under three or a child with long-term disability aged under 18 in need of intensive care, - personal care of a partially or fully powerless relative or a partially powerless person older than 80, - period of full disability pension (from the Czech pension insurance), - long-term voluntary service (abroad this applies to permanent residents only) exceeding 20 hours in a calendar week under an agreement concluded with the sending organisation accredited by the Czech Ministry of Interior, Evidenční list důchodového pojištění List of evidence for the pension instance, statement about the pension contributions; Potvrzení o průměrném čistém výdělku Confirmation about the avaradge net salary, it confirms previous monthly salary. However, the listed periods are not included in the duration of employment, if they collide with previous employments. If the listed periods collide, they are included only once (under Section 13 of Act on Employment). The previous employer must provide the claiming person with all those above mentioned documents and they should be ready on or before the date of actually work leaving. Each claiming person is taken by a councelor who will process the claim. Blank application form may be obtained at the local Labour Office. The job seeker may fill in the data either him/herself or with the help of a labour officer. Labour Offices mediate employment in the entire Czech Republic. If bound by international treaties to do so, the Labour Offices mediate employment abroad or mediate employment for foreign nationals in the Czech Republic (under Section 4(3) of Act on Employment).
In May 2012, job offices paid off unemployment benefits to 93,150 job seekers, that is 19.3 % of all job seekers under registration (April 2012 21.8 %, May 2011 23.3 %). ii) basic principles The Czech social security system is built on three pillars. The first pillar is compulsory social insurance, which covers sickness benefits, unemployment benefits and pension insurance. The second pillar is the state social support, covering the cost of subsistence and other basic personal needs of children and families. Finally, there is the social assistance provided to people in need. Everyone working in the Czech Republic is insured with the Czech Social Security Administration. The social security contribution is 8% of your gross salary. It will automatically be taken off your monthly pay by your Czech employer. Employers also have to pay social insurance for their employees from their own funds amounting 26% of gross wages. The claiming person can be the czech citizen (or a foreign national enjoying the same position as a Czech citizen, holding a permanent residence permit or if they are EU Citizen or having been granted asylum or if they are position under an international treaty - e.g. citizens of Slovakia. Other foreign nationals must hold a work permit and residence permit) not being employed or similarly engaged for work and not being a self-employer and not being a student will be registered with the job seekers registry based on a written application (see point i)). Foreign nationals with a residence visa for over 90 days (for the purpose of employment or business) or a long-term residence permit may not be registered with the job seekers registry (unless they are citizens of a state being a party to a bilateral treaty on employment signed by the Czech Republic). They may seek employment via the Internet or address any private agency. Job seekers registered with the job seekers registry are entitled to be mediated a suitable employment, i.e. employment corresponding to their health, age, professional skills and capabilities, previous work experience and accommodation opportunities (under Section 1(4) of Act on Employment). The job seeker must provide the Labour Office with the necessary co-ordination when invited (i.e. by attending a meeting at the Labour Office as arranged, for instance). The job seeker must notify the Labour Office of all changes in facts decisive for the registry of job-seekers (e.g. if he/she finds a job him/herself) within seven calendar days. The job seeker may be deleted from the register if he rejects a suitable job (offered by the Labour Office and fitting his/her qualification or skills) without a reason or if he/she intentionally hinders co-ordination with the Labour Office in its efforts to mediate employment; in such a case, the job seeker may be registered with the registry after three months(under Section 7(3) of Act on Employment). Unemployment relief benefits are not paid abroad! (Section 14(3) of Act on Employment). iii) entitlement conditions (dividing by schemes, if applicable. Please consider also partial unemployment benefits)
The condition for claiming unemployment benefits are depended on holding either temporary residency as an EU citizen either permanent resistency as a non-eu citizen for at least one year. In both cases the claiming person is obliged to work and make social insurance contribution in the Czech Republic for at least twelve months over the last three years. Claiming person has to declare as well that he/she does not have other forms of income, no severance pay outstanding, no income abroad, no bussines and no impediments to work. The specific entitlement can be defined in two ways: the period of support and the amount of support (see section vi)). iv) contribution rules (dividing by schemes, if applicable. Please consider also partial unemployment benefits) Please see sections i), ii) and iii) v) calculation rules (dividing by schemes, if applicable. Please consider also partial unemployment benefits) The amount of unemployment benefits is calculated on the basis of average net income generated by the job seeker in his/her last employment; the benefits amount to 50% of this income in the first three months and to 40% of this income in the remaining period. The unemployment benefits payable to job seekers attending re-qualification programmes amount to 60% of the average monthly income generated in the last employment. For persons who were self-employed before applying for mediation of employment, the unemployment benefits are calculated on the basis of the last assessment basis for pension insurance premiums and for the contributions to the state unemployment policy (Section 17(5) of Act on Employment). Job seekers who are unable to document the average monthly net income will be paid unemployment benefits amounting to 50% of the subsistence minimum for the first three months and to 40% of the subsistence minimum valid for citizens older than 26 years of age as per the day the job seeker becomes entitled to unemployment relief, for the remaining period. vi) duration (dividing by schemes, if applicable. Please consider also partial unemployment benefits) The job seeker is entitled to unemployment relief benefits for no more than six months (if the job seeker attends a re-qualification programme, the benefits will be paid until the end of the programme). Jobseekers are eligible for benefits until: the age of 50 for a period of 6 months the ages of 50 and 55 for a period of 9 months if the job seeker has been paying social insurance for a period of at least 25 years
55 years of age for a period of 12 months if the job seeker has been paying social insurance for a period of at least 30 years These benefits are available until suitable employment is found. That means, employment that will pay health and social security insurance and whose work week is no less than 80% of a regular work week and where the contract is for an indefinite or definite period of time, longer than 3 months. If the job seeker rejects a suitable job that is offered by the Labor Office and fits his/her qualifications, they may be deleted from the registry. vii) accumulation with other benefits The job seeker is not entitled to unemployment relief, if he/she: 1. is eligible for old age or full disability pension (from Czech insurance); 2. is eligible to sickness benefits compensating the lost wage (income); 3. is on (substitute) military service, arrested or imprisoned in the Czech Republic; 4. refuses to accept a job or re-qualification programme without a serious or family-related reason, or does not fulfil the material obligations within re-qualification; 5. intentionally hinders the efforts of the Labour Office in finding a suitable job; 6. has repeatedly terminated his/her employment in the past six months without serious reasons, or if his/her employment has been terminated for unsatisfactory results or for a breach of employment-related obligations; 7. resides abroad for more than 30 calendar days (under Section 14 of Act on Employment). 2.5. Family benefits (max 5 pages) In the Czech Republic family benefits are currently provided by the State Social Support Act, no. 117/1995 Coll., as amended. This scheme is in force since 1.1.1996. This new legislation replaced previous child benefit laws that was connected to the sickness insurance. i) Institution(s) involved Family benefits ie. Benefits of State Social Support are provided by Labour Office and its regional branches. There is almost 300 contact units for citizens where application can be made. ii) Basic principles Family benefits in the Czech Republic are: residence based generally to be entitled to any benefit the beneficiary must have permanent residence and also centre of interest in the territory of the Czech Republic means-tested as a condition of entitlement for most of benefits the income of beneficiary and persons living with him/her in the same household is assessed. persons living in the same household are generally assessed together. For means tested benefits there is a concept of jointly assessed persons. It follows from an idea that income of persons who jointly cover their daily expenses should also be assessed together. iii) Typologies (e.g. child benefits, other dependant persons) There are several types of family benefits: 1. Child benefit
2. Parental allowance 3. Birth grant 4. Funeral grant iv) beneficiaries; 1. Child benefit Entitled person is a dependent child. A child is considered to be dependent: Before the end of the obligatory school attendance; After the end of the obligatory school attendance till 26 years of age, under condition that a child is preparing for his/her future profession. 2. Parental allowance Entitled person is a person who personally, during whole month and on a full time basis duly takes care of a child under 4 years maximum. Person may also be entitled to this benefit if it is secured that a child is taken care of by another adult person (i.e. mother is still entitled to this benefit even if she goes back to work and when she is at work a child is taken care of by grandmother). 3. Birth grant Entitled person is the mother of a newly born child, if mother died than father is the entitled person. 4. Funeral grant Entitled person is a person who arranged a funeral to a dependent child or to a parent of a dependent child, under condition the deceased had permanent residence in the territory of the Czech Republic. v) entitlement conditions (dividing by typology, if applicable) 1. Child benefit Permanent residence and residence of a child and jointly assessed persons (centre of interest) in the Czech Republic; A fact that child is dependent (conditions see above); Income of a family (household of jointly assessed persons) does not exceed 2,4 multiplied of minimum subsistence. 2. Parental allowance Permanent residence and residence (centre of interest) of a person that takes care of a child (centre of interest) in the Czech Republic; Personal and full time care of a child under 4 years maximum. Person may also be entitled to this benefit if it is secured that a child is taken care of by another adult person (i.e. mother is still entitled to this benefit even if she goes back to work and when she is at work a child is taken care of by grandmother). If a child is under years of age, a child must not attend an institutional care for more than 46 hours in a calendar month, for children with disabilities there are exceptions to this rule. 3. Birth grant Permanent residence and residence (centre of interest) of a mother or father of a child (centre of interest) in the Czech Republic; First child is born within a family )- for second and further children no benefit is paid out;
Income of a family (household of jointly assessed persons) does not exceed 2,4 x amount of minimum subsistence of the family concerned. 4. Funeral grant Permanent residence of the deceased in the territory of the Czech Republic; Entitled person arranged a funeral to a dependent child or to a parent of a dependent child. vi) calculation rules (dividing by typology, if applicable); 1. Child benefit The amount of the child benefit depends on the age of the child: Age of dependent child Child benefit in CZK /month Till 6 years 500 (aprox. 20 EUR) 6 15 years 610 (aprox. 25 EUR) 15 26 years 700 (aprox. 28 EUR) 2. Parental allowance Maximum amount that caring person may receive for the whole period of taking care of a child (i.e. from birth till the age of maximum four years) is fixed at 220 000 CZK (aprox. 8000 EUR). Amount of monthly payment is determined by a caring person, but it is limited by maximum. Maximum is dermined as 70 per cent of the daily assessment base from which the previously received insurance-based maternity daily benefit was calculated multiplied by 30. If neither for the mother nor for the father such amout can be determined (mostly in cases they did not have sickness insurance), the amounts are fixed by law as follows: o For the first nine months of the age of the child 7600 CZK per month (aprox. 304 EUR); o than till the end of 4 years of age of a child 3800 CZK (aprox. 152 EUR). If at least to one parent it is possible to determine such amount and it is 7600 CZK or less, maximum amount of monthly parental benefit is 7600 (aprox. 304 EUR). If the above mentioned amount is more than 7600 CZK, maximum amount of parental benefit is this amount. (Example: if 70 per cent of the daily assessment base multiplied by 30 is 10000 CZK, maximum monthly parentel benefit is 10000 CZK). Under no circumstances parentel benefit may exceed 11500 CZK (aprox. 460 EUR). o If daily assessment base can be determined for both parents the higher amount is taken into account. o Amount once choosen by beneficiary may be changed only once within each 3 months. 3. Birth grant The amount is settled as fixed amount - 13000 CZK (aprox 520 EUR), in case of multiple birth 19500 CZK (aprox. 780 EUR). 4. Funeral grant The amount is settled as fixed amount - 5000 CZK (aprox 200 EUR). vii) accumulation with other benefits. 1. Child benefit no anti-accumulation rules.
2. Parental allowance generally cannot be accumulated with insurance based maternity benefit paid out of sickness insurance. In case such insurance based benefit is lower than parental allowance, the difference is paid out as parental allowance. Also cannot be accumulated with care allowance (benefit for the disabled person who is dependent on the care of the other). 3. Birth grant - no anti-accumulation rules. 4. Funeral grant - no anti-accumulation rules. 2.6. Maternity and paternity benefits (max 5 pages) 2.6.1. Maternity benefits: i) institution(s) involved; The maternity benefits authorities include the District Social Security Administrations (OSSZ), the Czech Social Security Administration (ČSSZ), service authorities, and the Ministry of Labour and Social Affairs. The service authorities include the Ministry of Defence, the Ministry of the Interior, the Prison Service of the Czech Republic, the General Customs Directorate, the Security Information Service, and the Office for Foreign Relations and Information. ii) basic principles; The insured person must have participated in the sickness insurance scheme for at least 270 calendar days over the last two years before the date of starting the maternity leave to have the right to this benefit. iii) typologies (e.g. maternity leave; benefits in cash); The following maternity benefits are provided to employees from the insurance: Maternity benefit, Compensatory benefit in pregnancy and maternity. iv) entitlement conditions (for each typology); Maternity benefit A basic condition for entitlement to maternity benefit is participation in insurance (e.g., continuation of insured employment) at the time of commencement of maternity leave (financial assistance during maternity). The time of commencement is understood as the day determined by the expectant mother herself between the eighth and sixth week prior to the expected date of birth, or the date of birth if the birth occurs prior to the time of commencement of maternity leave. If the insured mother does not stipulate such date during this period, the time of commencement of financial assistance during maternity leave is understood to commence at the beginning of the sixth week prior to the expected date of birth. A woman who commences maternity leave after leaving work within the period of protection is also entitled to the benefit. The period of protection for women whose insurance (employment) terminated during pregnancy is 180 calendar days from the date of termination of the insurance. If, however, the insurance period lasted a shorter period of time, the period of protection amounts only to the number of calendar days that the insurance lasted. If the insurance was not terminated during pregnancy, the period of protection amounts to 7 calendar days from the day
of termination of the sickness insurance (provided the insurance lasted at least during this period). The period of protection does not ensue from certain insured activities (e.g., from agreements to complete a job, from small-scale employment). The period of participation in sickness insurance for the right to MB includes the period of studies at a secondary school, vocational college or university considered to be the systematic preparation for a future profession, for the purposes of pension insurance, if the beginning of the sixth week before the anticipated childbirth date falls on the period of 270 calendar days from the date of the successful completion of the studies, or the care of the child was assumed within 270 days after the date of the successful completion of the studies. The period of receiving full invalidity pension if the pension recipient was deprived of this pension is also included and the insured activity as well as the period of insurance interruption occurred or persisted after being deprived of this pension. The general conditions applicable to employed persons also apply to self-employed persons and in addition, the following applies: the self-employed person must not personally carry out an independent gainful activity when receiving maternity benefits in cash, the period of participation of the self-employed person in the sickness insurance scheme must be at least 180 days during one year before the day when the payment of maternity benefits in cash started, at the same time the insurance period must have lasted for at least 270 calendar days during the last two years before the day when the payment of maternity benefits in cash started. Compensatory benefit in pregnancy and maternity (hereinafter reffered to as the CBPM ) The CBPM is provided to a female employee who was transferred to a different position because of her pregnancy and maternity and, as a result, receives a lower wage through no fault of her own. The benefit is provided to a pregnant employee or mother until the end of the 9 th month following birth, provided she had been doing work that such women are prohibited from doing. This also applies to female employees who cannot carry out their current work because it would, according to a medical opinion, pose a risk to their pregnancy, motherhood or breastfeeding. The benefit is provided for the number of calendar days that the transfer to a different position lasted. It is paid out to the pregnant employee no longer than up until the start of the sixth week prior to the expected date of birth. During maternity, the equalisation benefit is provided until the end of the 9 th month following birth and to women who breastfeed for the period they are breastfeeding. v) calculation rules (for maternity and benefits in cash); From the first calendar day, the MB amount is 70% of the daily basis of assessment per calendar day. The daily basis of assessment is reduced as follows: for maternity benefit and CBPM 100% up to the amount of the first reduction level; 60% from the amount above the first reduction level up to the second reduction level; 30% from the amount above the second reduction level up to the third reduction level; and the amount above the third reduction level is disregarded. The reduction level amounts valid from 1 January 2012 are: 1st reduction level - CZK 838
2nd reduction level - CZK 1 257 3rd reduction level - CZK 2 514 vi) duration and possible extensions (please specify also the conditions); The support period for the MB begins with the start of the maternity leave (no later than the beginning of the 6th week before the anticipated date of childbirth), and is 28 weeks for an insured woman who bears a child, even if she is an employee who is not married, is widowed, divorced, or alone for other serious reasons. For an insured woman who bears two or more children at the same time, the support period is 37 weeks and, after 28 weeks of the support period, the MB will only be received if the insured woman continues to take care of at least two of these children. For an insured person who assumed the care of a child (on the basis of a decision of the relevant authority, due to the mother s death, or long-term serious disease, or on the basis of an agreement under this Act), the support period is 22 weeks. If this insured person takes care of two or more children at the same time, the support period is 31 weeks and, after 22 weeks of the support period, the MB will only be received if the insured person continues to take care of at least two of these children. An insured person who is the father of a child or husband of a woman who bore the child also has the right to MB, if the person has concluded a written agreement with the mother of the child that he will take care of the child. The agreement must include data laid down by law, and may be concluded with effect no sooner than the beginning of the 7th week after the childbirth. vii) accumulation with other benefits. For concurrent employments, benefits will be calculated from the income from all employments where the employee qualifies, but the benefits will be granted only once (with the exception of the compensation allowance in pregnancy and maternity). 2.6.1 Paternity benefits: i) institution(s) involved; Labour Office of the Czech Republic Regional Branches and the Branch for the Capital of Prague Ministry of Labour and Social Affairs, Department of Family and Benefit Systems ii) basic principles; The parent s income is not tested; the parent may carry out an occupational activity without losing their entitlement to parental allowance. However, during the period of this occupational activity, the parent must ensure that the child is in the care of another adult. iii) typologies (paternity leave; benefits in cash); Parental allowance is provided to employees during the parental leave. A parent who personally and duly cares for a child who is the youngest in the family is entitled to parental allowance. iv) entitlement conditions (for each typology); Parent is entitled to parental allowance provided:
a child under the age of 2 years attends a creche or other facility for pre-school children for a maximum of 46 hours in a month; a child attends a remedial care centre, creche, kindergarten or similar facility for disabled pre-school children for no more than 4 hours a day; a child of disabled parents attends a creche, kindergarten or similar facility for pre-school children for no more than 4 hours a day; a disabled child attends a creche, kindergarten or similar facility for pre-school children for no more than 6 hours a day. v) calculation rules (for paternity leave and benefits in cash); A parent may elect the amount of parental allowance and thus the period of its drawing under the condition that at least one parent in a family is a person participating in sickness insurance. The monthly amount of parental allowance is calculated based on daily assessment base for determination maternity benefit or sickness benefit related to child s confinement or adoption according to the act on sickness insurance. If 70 % of 30 multiple of daily assessment base is under or equal 7,600 CZK, the amount of parental allowance can get to 7,600 CZK at the most; if 70 % of 30 multiple of daily assessment base is higher than 7,600 CZK, the maximum amount of parental allowance is limited by this figure, but parental allowance totals no more than 11,500 CZK. When the daily assessment base can be determined for both parents, the higher one is used for calculation. Choice of the amount of parental allowance can be changed once in 3 month. Parental allowance is provided until the total amount of 220,000 CZK. In the case that the daily assessment base cannot be set for any parent, parental allowance is paid at fixed monthly amounts of 7,600 CZK until the child reaches 10 months and after it at the amount of 3,800 CZK until the child is 48 months old. vi) duration and possible extensions (please specify also the conditions); Parental allowance is provided maximum up to 4 years of child s age. vii) accumulation with other benefits. There is a possible accumulation with other state social support benefits like child allowance, housing allowance, foster care benefits, birth grant, funeral grant. 2.7. Sickness (cash) benefits i) institution(s) involved; The sickness insurance authorities include the District Social Security Administrations (OSSZ), the Czech Social Security Administration (ČSSZ), service authorities, and the Ministry of Labour and Social Affairs. The service authorities include the Ministry of Defence, the Ministry of the Interior, the Prison Service of the Czech Republic, the General Customs Directorate, the Security Information Service, and the Office for Foreign Relations and Information. ii) basic principles; The aim of sickness insurance benefits is to provide financial support when a citizen loses his or her earnings temporarily due to illness or maternity leave.
Participation in sickness insurance is mandatory under the law. Participation in sickness insurance by self-employed persons is voluntarily. Under sickness insurance no differentiation is made in terms of whether an employee is a citizen of the Czech Republic or of some other country. It is not only persons working in the Czech Republic for employers based in the Czech Republic who may participate in sickness insurance; employees who work for employers not based in the Czech Republic are also insured in the Czech Republic, provided such employers are based in an EU Member State or in a country with which the Czech Republic has concluded an international social security agreement. The personal scope of sickness insurance determines who may be insured. Under the Sickness Insurance Act, the following persons shall be insured if they meet the conditions stipulated for participation in sickness insurances and are active in the Czech Republic: basis Employees: Workers with an employment relationship, Officers of the Police of the Czech Republic, the Fire and Rescue Service of the Czech Republic, the Customs Administration of the Czech Republic, the Prison Service of the Czech Republic, the Security Information Service, the Office for Foreign Relations and Information, and professional soldiers, State employees under the Service of Public Servants Act, Members of cooperatives where membership depends on them being in an employment relationship with the cooperative provided that, outside the contractual employment relationship, they work for the cooperative for which they are remunerated by the cooperative, Employees with Agreements on Working Activity, Workers with an employment relationship established under foreign legislation, Judges, Members of the Boards of Representatives of territorial self-governing units and Boards of Representatives of municipal quarters or municipal districts of territorially divided statutory cities and the Capital of Prague who have been disengaged from their regular occupations during the long term in order to discharge this function, or those who had not been employed prior to being elected Members of the Boards of Representatives but discharge the function to the same extent as Members of the Board of Representatives disengaged during the long term, Members of the Lower House of Parliament and Senators of the Senate of the Czech Parliament and Members of the European Parliament elected in the Czech Republic, Members of the government, President, Vice-President and Members of the Supreme Audit Office, Members of the Council for Radio and Television Broadcasting, Members of the Board of the Institute for Studying Totalitarian Regimes, Members of the Board of the Czech Telecommunication Office, Financial Arbitrator and Deputy Financial Arbitrator, Public Defender of Rights and Deputy Public Defender of Rights, Natural entities who, under special law, are appointed or elected chiefs of an administrative authority or a statutory body of a legal entity established under special law, or a deputy for this chief or statutory body if this chief or statutory body is just one entity and the appointment or election did not result in establishing an employment or service relationship for these persons; natural entities who, under special law, discharge a public function outside an employment or service relationship if their employment relationship is subject to the specified scope of the Labour Code, Voluntary home care services staff,
Foster-parents working in facilities designed for this purpose under special legislation, or who are paid remuneration for foster care that foster-parents are paid in special events and under special legislation, Imprisoned convicts included in a work process, People working under a relationship with the same content as an employment relationship, but without establishing the employment relationship because the conditions set out by labour law for establishing an employment relationship are not met, Partners and executives of limited liability companies and limited partners in special limited partnerships if they carry out work for the company outside of an employment relationship and such work is remunerated, and directors of public undertakings or utilities if they carry out work for the company outside of an employment relationship and such work is remunerated Authorised agents (proxies) if their income from their work as agents (proxies) is deemed income from dependent activity under the Income Tax Act Members of collective bodies of legal persons, where such members are remunerated for their work in such bodies, provided the income for their work in such bodies is deemed income from dependent activity or emoluments under the Income Tax Act Liquidators (receivers) if their income from their work as liquidators (receivers) is deemed dependent activity under the Income Tax Act Directors of branches of legal persons, where such branches are listed in Section 167c and their permanent place of work is in the Czech Republic. On a voluntarary basis: Self-employed persons Foreign employees employees of a foreign employer if they are active in the Czech Republic for the foreign employer s benefit. Foreign employees participate in the insurance if they have applied to enter the insurance system using the prescribed form. Someone who carries out numerous activities establishing participation in sickness insurance under the law (e.g., he or she has a number of jobs) shall be insured for each activity separately. Sickness insurance is usually established by the start of employment and terminated by the end of employment. The precondition for participating in sickness insurance is working in the Czech Republic in a job carried out under a contractual employment relationship or an employment relationship which may establish participation in this insurance, and the scope of employment which is determined by the minimum number of days (the employment lasted or should have lasted at least 15 calendar days). It also depends on the minimum amount of the agreed income (what is known as the authoritative income, the level of which has been set at CZK 2,500, and will be raised according to average wage developments). Insurance rates from the assessment base for social insurance in the Czech Republic valid from 1. 1. 2012 Sickness insurance (%) Pension insuran ce (%) State employ ment policy (%) In total (%) Employer 2,3 21,5 122 25 Employee - 6,5-6,5
Self-employed person A person voluntarily participating in pension insurance A foreign employee - 28 122 29,2 2,3 from the assessment base which cannot be lower than double the amount for the participation of employees and will be determined every year (in 2012: 5000,-CZK) (voluntary participation) 28 12,2 31,5-28 - 28 2,3 (voluntary participation) - - 2,3 iii) entitlement conditions;d under Sickness Insurance The following benefits are provided to employees from the insurance: Sickness benefit, Attendance allowance. Self-employed persons, if they pay sickness insurance premium, are entitled only to sickness benefit. Sickness Benefit An employee will be entitled to this benefit from the 22nd calendar day of his or her temporary incapacity to work, for the calendar days. Temporary incapacity to work is considered to be the condition which, for health disorders or other reasons laid down by this Act, does not enable the insured person to carry out the existing insured activities and, if the health disorder lasts for longer than 180 calendar days, this also applies to other than the existing insured activities. If, after the elapse of 180 calendar days of the temporary incapacity to work, the insured person can carry out other than the existing insured activities, i.e. to comply with the requirements for job-seekers, the temporary incapacity to work will be terminated. During the first two weeks of the temporary incapacity to work, an employer will provide the employee with a compensation wage for working days; however, the compensation for wages, salary or remuneration will not be paid for the first 3 days of this period. The employee will only be entitled to the compensation wage for the period of the employment relationship that establishes the participation in sickness insurance. Those who receive retirement pension or stage three invalidity receive the sickness benefit from the 22 nd calendar day of their temporary incapacity to work or from the 22 nd calendar day of the ordered quarantine, for no longer than 63 calendar days, from no later than the day on which the insured activity ends.
Those insured who have intentionally incurred a temporary incapacity to work are not entitled to sickness benefit. If an insured person has incurred a temporary incapacity to work caused by his or her involvement in a fight or as a direct consequence of being drunk or having misused narcotics or psychotropic substances, or while committing a deliberate crime or deliberately committed offence, this person is entitled to half the sickness benefit per calendar day, irrespective of whether the person has any family or not. If the insured sustained a temporary incapacity to work or was ordered into quarantine while escaping from a place of custody or imprisonment, the person is not entitled to sickness benefit either. The protection period is usually 7 calendar days from the date when sickness insurance expires. For women whose insurance expired during pregnancy, the protection period for the right to maternity benefit is 180 calendar days from the date when the insurance expired. Even for these women, if the insurance period was shorter, the protection period is only the same number of days as the number of days of the insurance. The protection period is not provided on the grounds of insured activities of a recipient of retirement pension or full disability pension; on the grounds of other employment, i.e. employment where the employee works instead of working in the other employment on the basis of which the employee is insured and where the employee has taken time-off for the period of working under another employment; and on the grounds of other employment carried out only during the recreational leave from the other employment. In addition, the protection period is not provided on the grounds of small employment; on the grounds of employment negotiated by an insured person who is a pupil or student if the employment is only for school holidays or holidays in general; and if the insurance of a convict expires at the time of his or her escape from the place of imprisonment. The general conditions applicable to employed persons also apply to self-employed persons. In addition, the following conditions for entitlement to sickness benefits apply: a self-employed person does not personally carry out an independent gainful activity during the time of inability to work (quarantine), the period of participation of the self-employed person in sickness insurance has lasted for at least three months immediately preceding the day of the origination of the inability to work (quarantine); The entitlement to benefits arises if the conditions for entitlement to benefits are satisfied during the period of insurance or if the temporary inability to work starts within the protection period of 7 calendar days from the day of terminating the insurance. If the duration of the insurance was shorter, then the protection period is equal to the number of calendar days for which the insurance lasted. The period of protection does not ensue from insurance of the work of self-employed persons who enjoy an old-age pension or disability pension for a third-degree disability. Attendance allowance3. An employee who cannot work because he or she has to attend an ill member of the employee s household, or take care of a healthy child below the age of 10 because the school or other child facility has been closed (due to a breakdown, epidemic, other unforeseen event), the child has been ordered into quarantine, or the person who otherwise takes care of the child has fallen ill has the right to attendance allowance. An employee is not entitled to attendance allowance for attending or taking care of a child if another natural entity is, on the grounds of taking care of the child, entitled to receive MB or
entitled to parental benefits; this does not apply if the other person has fallen ill, sustained an injury, is in situations set out by law, born a child or been ordered into quarantine, and consequently cannot take care of the child. In the same case of attendance (care), the attendance allowance is only paid to one of the eligible or to two eligible persons successively if they replace one another in the same case of attendance (care). Only one replacement can be made. Some groups of insured, due to the nature of their activities, are not entitled to the attendance allowance (such as employees under small employment) iv) calculation rules; The amount of sickness benefit per calendar day is 60% of the reduced daily basis of assessment. The daily basis of assessment is reduced as follows: for sickness benefit and attendance allowance, 90% up to the amount of the first reduction level; 60% from the amount above the first reduction level up to the second reduction level; 30% from the amount above the second reduction level up to the third reduction level; and the amount above the third reduction level is disregarded. The reduction level amounts valid from 1 January of the calendar year are announced as a notification by the Ministry of Labour and Social Affairs in the Collection of Acts. According to current assumptions, the reduction levels from 1 January 2012 should be: 1st reduction level - CZK 838 2nd reduction level - CZK 1 257 3rd reduction level - CZK 2 514 v) duration; Sickness benefit The support period lasts no longer than 380 calendar days from the date of the temporary incapacity to work or quarantine order, unless stated otherwise. Attendance allowance The support period for the attendance allowance is no longer than 9 calendar days. If an employee who permanently takes care of at least one child below the age of 16 who has not finished compulsory education lives alone the support period is no longer than 16 calendar days. The support period for the attendance allowance is suspended during hospital care of the person under treatment in a healthcare facility. vi) accumulation with other benefits. For concurrent employments, benefits will be calculated from the income from all employments where the employee qualifies, but the benefits will be granted only once (with the exception of the compensation allowance in pregnancy and maternity).
2.8. Minimum resources (means-tested) benefits (max 10 pages, possibly describing all meanstested benefits, if more than one typology is provided - e.g. if there are different schemes for long-term unemployed or for elderly people) i) Institution(s) involved; Labour Office and its regional branches (more than 400 contact places), tasks in the field of social work are also entrusted to municipalities. ii) Basic principles; Assistance to persons with insufficent resources motivating those persons to make an active effort to improve their situation and be able to cover their material needs themselves. Scheme of assistance in material need is: residence based generally to be entitled to any benefit the beneficiary must have permanent residence in the territory of the Czech Republic. This does not apply to special immediate help there stay in the territory is sufficient means-tested income and property situation of the beneficiary is tested. based on amounts of subsistence defined in legislation: - Living subsistence minimal accepted income level able to secure the nutrition and other basic personal needs; - Existential subsistence minimal treshold for financial resources which is necessary to secure nutrition and other basic personal needs on the level enabling survival. Existential subsistence cannot be applied to dependent child, beneficiary of old age pensiion, person disabled in the third level and to person older than 68 years. Living subsistence since 1. 1. 2012 (monthly amounts in CZK) For an individual 3 410 For the first adult in a household 3 140 For the second and following adult person in a household 2 830 For dependent child: Till 6 years 1 740 6-15 years 2 140 15-26 years 2 450 Living subsistence is total of all sums of the living subsistence amounts of all members of the household. Existential subsistence since 1. 1. 2012 (monthly amount in CZK Existential subsistence 2 200 iii) Entitlement conditions (characteristics of beneficiaries and income thresholds); Person in material need positive definition Person or family does not have enough resources and their overall social and material state does not enable to satiry of basic living needs on acceptable level. At the same time such
person is unable due to objective reasons to solve her situation herself by increase of the income (use of property or its sale etc.) Person in material need negative definition: there is also a list of situations in which persons ARE NOT regarded as being in material need we list only the most frequent: those who verifyably do not show an effort to increase the income by own aktivity. Those who do not have labour or simile relationship, do not exercise self-employment and are not registered unemployed. registered unemployed who without servus reasons refused short term employment or participation in targeted program for employment solution. Types of benefits Subsistence Allowance Housing Supplement Special Immediate Assistance Subsistence Allowance Person or a family is entitled to subsistence allowance if its income after deducting adequate housing expenses does not reach the amount of subsistence. The amount of subsistence provided for each person individually, based on the assessmetn of his/her effort, possibilities and potential. In order to determine the amount of subsistence of a family, the amoutns to all members are aggregated. Housing Supplement This benefit is provided to persons/families whose income together with housing benefit paid out from state social support scheme is not sufficient to cover housing expeses Beneficiary is a tenant or owner of a flat who is entitled to subsistence allowance. Special Immediate Assistance It is provided to persons who find themselves in situations that needs to be soved immediately. According to the legislation, there are six such situations: Condition for regular benefits are not fulfilled, nevertheess, in case the help is not provided a person would suffer serious harm. Person suffeded serious event (natural disaster, fire, accident and similar). Amount of benefit may reach minimum subsistence multiplied by 15, i.e. 51 150 CZK (aprox. 2046 EUR). Lack of resources to cover the fees connected with the duplication of personal documents or due to loos of financial resources. Amout may reach the real expenses. Lack of resources necessary to purchase or repair an object of long-term use. Benefit covers real expenses, maximum within one calendar year is minimum subsistence of an individual multiplied by 10, i.e. 34100 CZK (aprox. 1364 EUR) Lack of resources to cover justified expeses arising in connection with the education or leisure acitivities of dependent children or expenses related to social-legal protection of children. Benefit covers real expenses, maximum within one calendar year is minimum subsistence of an individual multiplied by 10, i.e. 34100 CZK (aprox. 1364 EUR) Threat of social exclusion (persons leaving institutional child care or foster care, addiction therapy, prison etc.).the amount is up to 1000 CZK (aprox. 40 EUR) and may be provided repeatedly, with maximum within callendar year 13640 CZK (approx. 545 EUR). iv) Calculation rules
Subsistence Allowance Amount of this benefits follows from the amounts of living and existential subsistance. It is determined for each person individually depending on assessment of his/her effort, needs and potential. The more a person makes an effort to improve his/her income (be it by employment, use of property, exercise of a claim etc.) the higher the amount of subsistence. The amount of benefit is the difference between the amount of subsistence of an individual or a family and the real income, from which the adequate housing expenses are deducted. Housing Supplement The amount is determined so that to the recipient and/or the family after covering reasonable housing expenses (rental, services connected to housing and energies) has remained the amount of subsistence. Special Immediate Assistance see above v) Duration see above Subsistence Allowance no precise limitation stipulated by law, duration is assessed based on individual circumstances of an individual. Housing Supplement Payment of this supplement is limited to 84 months within last 10 calendar years. This limitation does not apply to households consisting solely of persons older than 70 years of age and to persons with disabilities who live in flats that were build or for them. Special Immediate Assistance see above vi) Accumulation with other benefits The assistance in material need is a social safety net. Before there can be an entitlement to this assistance, person must have exhausted other entitlements from insurance-based systems or from state social support or be in a situation that entitlements from those schemes do not reach the amount of his subsistence. References A good starting point for the collection of comprehensive information on these issues is represented by the following websites: - MISSOC (Mutual Information System on Social Protection): http://ec.europa.eu/social/main.jsp?catid=815&langid=en - EU Social Security Coordination webpage (rights country by country): http://ec.europa.eu/social/main.jsp?langid=en&catid=858