Social Security Programs 

Throughout the World: 

Europe, 2004 

Social Security Administration

Office of Policy

Office of Research, Evaluation, and Statistics

500 E Street, SW, 8th Floor

Washington, DC 20254

SSA Publication No. 13-11801

September 2004

Preface

This issue begins the second four-volume series of Social Security Programs Throughout the

World. In this new format, each volume focuses on a specific region of the world: Europe, Asia

and the Pacific, Africa, and the Americas. The volumes are published at 6-month intervals over a

2-year period.

The information contained in these volumes is crucial to our efforts, and those of researchers

in other countries, to review different ways of approaching social security challenges that will

enable us to adapt our social security systems to the evolving needs of individuals, households,

and families. These efforts are particularly important as each nation faces major demographic

changes, especially the increasing number of aged persons, as well as economic and fiscal issues.

Social Security Programs Throughout the World is the product of a cooperative effort

between the Social Security Administration (SSA) and the International Social Security

Association (ISSA). Founded in 1927, the ISSA is a nonprofit organization bringing together

institutions and administrative bodies from countries throughout the world. The ISSA deals with

all forms of compulsory social protection that by legislation or national practice are an integral

part of a country’s social security system.

Previous editions of this report, which date back to 1937, were issued as one volume and were

prepared by SSA staff. With the introduction of the four-volume format, however, the research and

writing has been contracted out to the ISSA. The ISSA has conducted the research largely

through its numerous country-based correspondents, as well as its Social Security Worldwide

Database and a myriad of other types of data that must be drawn together to update this report.

Members of the ISSA’s Information System and Databases Unit analyzed the information and

revised the publication to reflect detailed changes to each social security program. Social

Security Programs Throughout the World is based on information available to the ISSA and SSA

with regard to legislation in effect in January 2004, or the last date for which information has been

received.

Questions about the report should be sent to Barbara Kritzer at ssptw@ssa.gov. Corrections,

updated information, and copies of relevant documentation and legislation are also welcome and

may be sent to:

International Social Security Association

Information System and Databases Unit

Case postale 1

4 route des Morillons

CH-1211 Geneva 22

Switzerland

This report is available at http://www.socialsecurity.gov/policy. For additional copies, please

telephone 202-358-6274 or e-mail op.publications@ssa.gov.

SSA staff members were responsible for technical and editorial assistance and production.

Barbara Kritzer served as technical consultant and provided overall project management.

Emil Loomis designed the report and produced it for publication. Sherry Snyder edited the report,

with assistance from Anthony Nathe. Laurie Brown prepared the electronic versions for the Web.

Edward J. DeMarco

Associate Commissioner

for Research, Evaluation, and Statistics

September 2004

Contents

Guide to Reading the Country Summaries

Sources of Information .................................................................................. 1

Types of Programs

Employment-Related .................................................................................................... 2

Universal ..................................................................................................................... 2

Means-Tested .............................................................................................................. 3

Other Types of Programs ............................................................................................. 3

Format of Country Summaries

Old Age, Disability, and Survivors .............................................................................. 4

Sickness and Maternity ............................................................................................... 8

Work Injury.................................................................................................................. 10

Unemployment ............................................................................................................ 12

Family Allowances....................................................................................................... 14

Tables

1. Types of social security programs.......................................................................... 16

2. Types of mandatory systems for retirement income ............................................... 18

3. Demographic and other statistics related to social security, 2004 .......................... 20

4. Contribution rates for social security programs, 2004 ............................................ 22

Albania .......................................... 27

Andorra .......................................... 31

Austria ........................................... 34

Belarus ........................................... 39

Belgium .......................................... 44

Bulgaria .......................................... 49

Croatia ............................................ 52

Cyprus ........................................... 58

Czech Republic .............................. 63

Denmark ......................................... 67

Estonia ........................................... 72

Finland ........................................... 76

France ............................................ 83

Germany ......................................... 89

Greece ............................................ 95

Guernsey ........................................ 100

Hungary ......................................... 104

Iceland ........................................... 109

Ireland ............................................ 114

Isle of Man .................................... 120

Italy ................................................ 126

Jersey ............................................. 132

Latvia ............................................. 136

Liechtenstein ................................. 139

Lithuania ........................................ 144

Luxembourg ................................... 147

Malta .............................................. 151

Moldova ........................................ 156

Monaco .......................................... 160

Netherlands ................................... 163

Norway .......................................... 167

Poland ............................................ 173

Portugal .......................................... 179

Romania ......................................... 185

Russia ............................................ 190

San Marino .................................... 195

Serbia ............................................. 198

Slovak Republic ............................. 202

Slovenia ......................................... 207

Spain .............................................. 212

Sweden .......................................... 217

Switzerland .................................... 223

Ukraine ........................................... 229

United Kingdom ............................ 234

Country Summaries

Guide to Reading

the Country Summaries

This issue on Europe marks the beginning of the second

four-volume series Social Security Programs

Throughout the World. The combined findings of this

and future reports—on Asia and the Pacific, Africa, and

the Americas—produced at 6-month intervals over a 2-

year period, highlight the principal features of social

security programs throughout the world.

This guide serves as an overview of programs in all

regions. A few political jurisdictions have been excluded

because they have no social security system or have

issued no information regarding their social security

legislation. In this volume on Europe, the data reported

are based on laws and regulations in force in January 2004

or on the last date for which information has been received.1 Information for each country on types of social

security programs, types of mandatory systems for

retirement income, contribution rates, and demographic

and other statistics related to social security is shown in

Tables 1–4 beginning on page 16.

The country summaries show each system’s major

features. Separate programs in the public sector and

specialized funds for such groups as agricultural workers,

collective farmers, or the self-employed have not been

described in any detail. Benefit arrangements of private

employers or individuals are not described in any detail,

even though such arrangements may be mandatory in

some countries or available as alternatives to statutory

programs.

The country summaries also do not refer to international

social security agreements that may be in force between

two or more countries. Those agreements may modify

coverage, contributions, and benefit provisions of national

laws summarized in the country write-ups. Since the

summary format requires brevity, technical terms have

been developed that are concise as well as comparable

and are applied to all programs. The terminology may

therefore differ from national concepts or usage.

Sources of Information

Most of the information in this report was collated from

the Social Security Programs Throughout the World

survey conducted by the International Social Security

Association (ISSA) under the sponsorship of the U.S.

Social Security Administration (SSA). This information

was supplemented by data collected from the ISSA’s

Developments and Trends Annual Survey. Empirical

data were also provided by numerous social security

officials throughout the world. (For a listing of countries

and jurisdictions, see page 2.) Important sources of

published information include the ISSA Documentation

Center; the legislative database of the International

Labour Office; and official publications, periodicals, and

selected documents received from social security

institutions. Information was also received from the

Organization for Economic Cooperation and

Development, the World Bank, the International

Monetary Fund, and the United Nations Development

Programme. During the compilation process,

international analysts at both SSA and the ISSA

examined the material for factual errors, ambiguous

statements, and contradictions in material from different

sources.

Types of Programs

The term social security in this report refers to

programs established by statute that insure individuals

against interruption or loss of earning power and for

certain special expenditures arising from marriage, birth,

or death. This definition also includes allowances to

families for the support of children.

Protection of the insured person and dependents

usually is extended through cash payments to replace at

least a portion of the income lost as the result of old

age, disability, or death; sickness and maternity; work

injury; unemployment; or through services, primarily

hospitalization, medical care, and rehabilitation. Measures providing cash benefits to replace lost income are

usually referred to as income maintenance programs;

measures that finance or provide direct services are

referred to as benefits in kind.

Three broad approaches to coverage provide cash

benefits under income-maintenance programs; namely,

employment-related, universal, and means-tested

systems. Under both the employment-related and the

universal approaches, the insured, dependents, and

survivors can claim benefits as a matter of right. Under

means-tested approaches, benefits are based on a

comparison of a person’s income or resources against a

standard measure. Some countries also provide other

types of coverage.

1 The names of the countries in this report are those used

by the U.S. Department of State. The term country has been

used throughout the volume even though in some instances

the term jurisdiction may be more appropriate.
2 ♦ SSPTW: Europe, 2004

Employment-Related

Employment-related systems, commonly referred to as

social insurance systems, generally base eligibility for

pensions and other periodic payments on length of

employment or self-employment or, in the case of family

allowances and work injuries, on the existence of the

employment relationship itself. The amount of pensions

(long-term payments, primarily) and of other periodic

(short-term) payments in the event of unemployment,

sickness, maternity, or work injury is usually related to the

level of earnings before any of these contingencies

caused earnings to cease. Such programs are financed

entirely or largely from contributions (usually a

percentage of earnings) made by employers, workers, or

both and are in most instances compulsory for defined

categories of workers and their employers.

The creation of notional defined contributions (NDC)

is a relatively new method of calculating benefits. NDC

schemes are a variant of contributory social insurance

that seek to tie benefit entitlements more closely to

contributions. A hypothetical account is created for each

insured person that is made up of all contributions during

his or her working life and, in some cases, credit for

unpaid activity such as caregiving. A pension is calculated by dividing that amount by the average life expectancy at the time of retirement and indexing it to various

economic factors. When benefits are due, the

individual’s notional account balance is converted into a

periodic pension payment.

Some social insurance systems permit voluntary

affiliation of workers, especially the self-employed. In

some instances, the government subsidizes such programs to encourage voluntary participation.

The government is, pro forma, the ultimate guarantor

of many benefits. In many countries, the national government participates in the financing of employmentrelated as well as other social security programs. The

government may contribute through an appropriation from

general revenues based on a percentage of total wages

paid to insured workers, finance part or all of the cost of

a program, or pay a subsidy to make up any deficit of an

insurance fund. In some cases, the government pays the

contributions for low-paid workers. These arrangements

are separate from obligations the government may have

as an employer under systems that cover government

employees. Social security contributions and other

earmarked income are kept in a dedicated fund and are

shown as a separate item in government accounts. (For

further details on the government’s role in financing

social security, see Source of Funds under Old Age,

Disability, and Survivors.)

Universal

Universal programs provide flat-rate cash benefits to

residents or citizens, without consideration of income,

employment, or means. Typically financed from general

revenues, these benefits may apply to all persons with

sufficient residency. Universal programs may include

Countries in Europe that Responded to the

Social Security Programs Throughout the World Survey

Albania

Andorra

Austria

Belarus

Belgium

Bulgaria

Croatia

Cyprus

Czech Republic

Denmark

Estonia

Finland

France

Germany

Greece

Guernsey

Hungary

Iceland

Ireland

Isle of Man

Italy

Jersey

Latvia

Liechtenstein

Lithuania

Luxembourg

Malta

Moldova

Monaco

Netherlands

Norway

Poland

Portugal

Romania

Russia

San Marino

Serbia

Slovak Republic

Slovenia

Spain

Sweden

Switzerland

Ukraine

United Kingdom
SSPTW: Europe, 2004 ♦ 3

old-age pensions for persons over a certain age; pensions

for disabled workers, widow(er)s, and orphans; and

family allowances. Most social security systems

incorporating a universal program also have a second-tier

earnings-related program. Some universal programs,

although receiving substantial support from income taxes,

are also financed in part by contributions from workers

and employers.

Means-Tested

Means-tested programs establish eligibility for benefits by

measuring individual or family resources against a

calculated standard usually based on subsistence needs.

Benefits are limited to applicants who satisfy a means

test. The size and type of benefits awarded are

determined in each case by administrative decision within

the framework of the law.

The specific character of means, needs, or income

tests, as well as the weight given to family resources,

differ considerably from country to country. Such

programs, commonly referred to as social pensions or

equalization payments, traditionally are financed primarily

from general revenues.

Means-tested systems constitute the sole or principal

form of social security in only a few jurisdictions. In

other jurisdictions, contributory programs operate in

tandem with income-related benefits. In such instances,

means- or income-tested programs may be administered

by social insurance agencies. Means-tested programs

apply to persons who are not in covered employment or

whose benefits under employment-related programs,

together with other individual or family resources, are

inadequate to meet subsistence or special needs. Although means-tested programs can be administered at the

national level, they are usually administered locally.

In this report, when national means-tested programs

supplement an employment-related benefit, the existence

of a means-tested program is generally noted, but no

details concerning it are given. When a means-tested

program represents the only or principal form of social

security, however, further details are provided.

Other Types of Programs

Three other types of programs are those delivered, in the

main, through financial services providers (mandatory

individual accounts, mandatory occupational pensions,

and mandatory private insurance), publicly operated

provident funds, and employer-liability systems.

Programs Delivered by Financial Services Providers

Mandatory individual accounts. Applies to a program

where covered persons and/or employers must contribute

a certain percentage of earnings to the covered person’s

individual account managed by a contracted public or

private fund manager. The mandate to establish membership in a scheme and the option to choose a fund

manager lie with the individual. The accumulated capital

in the individual account is normally intended as a source

of income replacement for the contingencies of retirement, disability, ill health, or unemployment. It may also

be possible for eligible survivors to access the accumulated capital in the case of the insured’s death.

 Contributions are assigned to an employee’s individual account. The employee must pay administrative

fees for the management of the individual account and

usually purchase a separate policy for disability and

survivors insurance.

Mandatory occupational pension. Applies to a program

where employers are mandated by law to provide

occupational pension schemes financed by employer, and

in some cases, employee contributions. Benefits may be

paid as a lump sum, annuity, or pension.

Mandatory private insurance. Applies to a program

where individuals are mandated by law to purchase

insurance directly from a private insurance company.

(For example, in Switzerland, insurance for cash and

medical benefits under Sickness and Maternity.)

Provident Funds. These funds, which exist primarily in

developing countries, are essentially compulsory savings

programs in which regular contributions withheld from

employees’ wages are enhanced, and often matched, by

employers’ contributions. The contributions are set aside

and invested for each employee in a single, publicly

managed fund for later repayment to the worker when

defined contingencies occur. Typically, benefits are paid

out in the form of a lump sum with accrued interest,

although in certain circumstances drawdown provisions

enable partial access to savings prior to retirement or

other defined contingencies. On retirement, some

provident funds also permit beneficiaries to purchase an

annuity or opt for a pension. Some provident funds

provide pensions for survivors.

Employer-Liability Systems. Under these systems,

workers are usually protected through labor codes that

require employers, when liable, to provide specified

payments or services directly to their employees. Specified payments or services can include the payment of

lump-sum gratuities to the aged or disabled; the provision

of medical care, paid sick leave, or both; the payment of

maternity benefits or family allowances; the provision of

temporary or long-term cash benefits and medical care in

the case of a work injury; or the payment of severance

indemnities in the case of dismissal. Employer-liability
4 ♦ SSPTW: Europe, 2004

systems do not involve any direct pooling of risk, since

the liability for payment is placed directly on each employer. Employers may insure themselves against liability,

and in some jurisdictions such insurance is compulsory.

Format of Country Summaries

Each country summary discusses five types of programs:

• Old age, disability, and survivors;

• Sickness and maternity;

• Work injury;

• Unemployment; and

• Family allowances.

Old Age, Disability, and Survivors

Benefits under old age, disability, and survivor programs

usually cover long-term risks, as distinct from short-term

risks such as temporary incapacity resulting from

sickness and maternity, work injury or unemployment.

The benefits are normally pensions payable for life or for

a considerable number of years. Such benefits are

usually provided as part of a single system with common

financing and administration as well as interrelated

qualifying conditions and benefit formulas.

The laws summarized under Old Age, Disability, and

Survivors focus first on benefits providing pensions or

lump-sum payments to compensate for loss of income

resulting from old age or permanent retirement. Such

benefits are usually payable after attaining a specified

statutory age. Some countries require complete or

substantial retirement in order to become eligible for a

pension; other countries pay a retirement pension at a

certain age regardless of whether workers retire or not.

The second type of long-term risk for which pensions

are provided is disability (referred to in some countries as

invalidity). Disability may be generally defined as longterm and more or less total work impairment resulting

from a nonoccupational injury or disease. (Disability

caused by a work injury or occupational disease is usually

compensated under a separate program; see Work Injury,

below.)

The third type of pension is payable to dependents of

insured workers or pensioners who die. (Pensions for

survivors of workers injured while working are usually

provided under a separate Work Injury program.)

Coverage. The extent of social security coverage in any

given country is determined by a number of diverse

factors, including the kind of system, sometimes the age

of the system, and the degree of economic development.

A program may provide coverage for the entire country

or some portion of the workforce.

In principle, universal systems cover the entire population for the contingencies of old age, disability, and

survivorship. A person may have to meet certain conditions, such as long-term residence or citizenship. Many

countries exclude aliens from benefits unless there is a

reciprocal agreement with the country of which they are

nationals.

The extent of employment-related benefits is usually

determined by the age of the system. Historically, social

security coverage was provided first to government

employees and members of the armed forces, then to

workers in industry and commerce, and eventually

extended to the vast majority of wage earners and

salaried employees through a general system. As a

result, public employees (including military personnel and

civil servants), teachers, and employees of public utilities,

corporations, or monopolies are still covered by occupation-specific separate systems in many countries.

In many countries, special occupational systems have

been set up for certain private-sector employees, such as

miners, railway workers, and seamen. Qualifying

conditions and benefits are often more liberal than under

the general system. The risk involved in an occupation,

its strategic importance for economic growth, and the

economic and political strength of trade unions may have

had a role in shaping the type and size of benefits offered

by the particular program.

Groups that might be considered difficult to administer—family workers, domestics, day workers, agricultural

workers, and the self-employed—were often initially

excluded from coverage. The trend has been to extend

coverage to these groups under separate funds or to

bring them gradually under the general system. In some

countries, noncovered workers become eligible for the

right to an eventual pension if they make voluntary

contributions at a specified level. Some systems also

provide voluntary coverage for women who leave the

labor force temporarily to have children or to raise a

family, or for self-employed persons not covered by a

mandatory program. Some developed countries with

younger programs have constructed a unified national

program, thus largely bypassing the need for developing

separate industrial or agricultural funds.

Most developing countries have extended coverage

gradually. Their first steps toward creating a social

security system have commonly been to cover wage and

salary workers against loss of income due to work injury,

and then old age and, less commonly, disability.

In a number of developing countries, particularly in

those that were once British colonies, this initial step has

come via the institutional form of provident funds. Most

provident funds provide coverage for wage and salary

workers in the government and private sector. A few

funds have exclusions based on the worker’s earnings or

the size of the firm. Funds that exclude employees with

earnings above a certain level from compulsory coverage
SSPTW: Europe, 2004 ♦ 5

may in some cases give them the option to affiliate or

continue to participate voluntarily.

Source of Funds. The financing of benefits for old-age,

disability, and survivor programs can come from three

possible sources:

• A percentage of covered wages or salaries paid by

the worker,

• A percentage of covered payroll paid by the employer, and

• A government contribution.

Almost all pension programs under social insurance (as

distinct from provident funds or universal systems) are

financed at least in part by employer and employee

contributions. Many derive their funds from all three

sources. Contributions are determined by applying a

percentage to salaries or wages up to a certain maximum. In many cases the employer pays a larger share.

The government’s contribution may be derived from

general revenues or, less commonly, from special earmarked or excise taxes (for example, a tax on tobacco,

gasoline, or alcoholic beverages). Government contributions may be used in different ways to defray a portion of

all expenditures (such as the cost of administration), to

make up deficits, or even to finance the total cost of a

program. Subsidies may be provided as a lump sum or an

amount to make up the difference between employer/

employee contributions and the total cost of the system.

A number of countries reduce or, in some cases, eliminate

contributions for the lowest-paid wage earners, financing

their benefits entirely from general revenues or by the

employer’s contribution.

The contribution rate apportioned between the sources

of financing may be identical or progressive, increasing

with the size of the wage or changing according to wage

class. Where universal and earnings-related systems

exist side by side, and the universal benefit is not financed

entirely by the government, separate rates may exist for

each program. In other instances, flat-rate weekly

contributions may finance basic pension programs.

These amounts are uniform for all workers of the same

age and sex, regardless of earnings level. However, the

self-employed may have to contribute at a higher rate

than wage and salary workers, thereby making up for the

employer’s share.

For administrative purposes, a number of countries

assess a single overall social security contribution covering several contingencies. Benefits for sickness, work

injury, unemployment, and family allowances as well as

pensions may be financed from this single contribution.

General revenue financing is the sole source of income in

some universal systems. The contribution of the resident

or citizen may be a percentage of taxable income under

a national tax program. General revenues finance all or

part of the means-tested supplementary benefits in many

countries.

Contribution rates, as a rule, are applied to wages or

salaries only up to a statutory ceiling. A portion of the

wage of highly paid workers will escape taxation but will

also not count in determining the benefit. In a few cases,

an earnings ceiling applies for the determination of

benefits but not for contribution purposes. In some

countries, contribution rates are applied not to actual

earnings but to a fixed amount that is set for all earnings

falling within a specified range or wage class.

Qualifying Conditions. Qualifying to receive an old-age

benefit is usually conditional on two requirements:

attainment of a specified age and completion of a

specified period of contributions or covered employment.

Another common requirement is total or substantial

withdrawal from the labor force. In some instances,

eligibility is determined by resident status or citizenship.

Old-age benefits generally become payable between

ages 60 and 65. In some countries, length-of-service

benefits are payable at any age after a certain period of

employment, most commonly between 30 and 40 years.

In recent years, several countries have increased the age

limit for entitlement, in part because of budgetary

constraints arising as a consequence of demographic

aging.

Many programs require the same pensionable age for

women as for men. Others permit women to draw a full

pension at an earlier age, even though women generally

have a longer life expectancy. Although the norm has

been for the differential to be about 5 years, there is now

an emerging international trend toward equalizing the

statutory retirement age.

Many programs offer optional retirement before the

statutory retirement age is reached. A reduced pension,

in some instances, may be claimed up to 5 years before

the statutory retirement age. Some countries pay a full

pension before the regular retirement age if the applicant

meets one or more of the following conditions: work in

an especially arduous, unhealthy, or hazardous occupation

(for example, underground mining); involuntary unemployment for a period near retirement age; physical or

mental exhaustion (as distinct from disability) near

retirement age; or, occasionally, an especially long period

of coverage. Some programs award old-age pensions to

workers who are older than the statutory retirement age

but who cannot satisfy the regular length-of-coverage

requirement. Other programs provide increments to

workers who have continued in employment beyond the

normal retirement age.

Universal old-age pension systems usually do not

require a minimum period of covered employment or

contributions. However, most prescribe a minimum

period of prior residence.
6 ♦ SSPTW: Europe, 2004

Some old-age pension systems credit periods during

which persons, for reasons beyond their control, were not

in covered employment. Credits can be awarded for

reasons such as disability, involuntary unemployment,

military service, education, child rearing, or training.

Other systems disregard these periods and may proportionately reduce benefits for each year below the required minimum. Persons with only a few years of

coverage may receive a refund of contributions or a

settlement in which a proportion of the full benefit or

earnings is paid for each year of contribution.

The majority of old-age pensions financed through

social insurance systems require total or substantial

withdrawal from covered employment. Under a retirement test, the benefit may be withheld or reduced for

those who continue working, depending on the amount of

earnings or, less often, the number of hours worked.

Universal systems usually do not require retirement from

work for receipt of a pension. Provident funds pay the

benefit only when the worker leaves covered employment or emigrates.

Some countries provide a number of exemptions that

act to eliminate the retirement condition for specified

categories of pensioners. For instance, the retirement

test may be eliminated for workers who reached a

specified age above the minimum pensionable age or for

pensioners with long working careers in covered employment. Occupations with manpower shortages may also

be exempted from the retirement test.

The principal requirements for receiving a disability

benefit are loss of productive capacity after completing a

minimum period of work or having met the minimum

contribution requirements. Many programs grant the full

disability benefit for a two-thirds loss of working capacity

in the worker’s customary occupation, but this requirement may vary from one-third to 100 percent.

The qualifying period for a disability benefit is usually

shorter than for an old-age benefit. Periods of 3 to 5

years of contributions or covered employment are most

common. A few countries provide disability benefits in

the form of an unlimited extension of ordinary cash

sickness benefits.

Entitlement to disability benefits may have age limitations. The lower limit in most systems is in the teens, but

it may be related to the lowest age for social insurance or

employment or to the maximum age for a family allowance benefit. The upper age limit is frequently the

statutory retirement age, when disability benefits may be

converted to old-age benefits.

For survivors to be eligible for benefits, most programs

require that the deceased worker was a pensioner,

completed a minimum period of covered employment, or

satisfied the minimum contribution conditions. The

qualifying contribution period is often the same as that for

the disability benefit. The surviving spouse and orphans

may also have to meet certain conditions, such as age

requirements.

Old-Age Benefits. The old-age benefit in most countries

is a wage-related, periodic payment. However, some

countries pay a universal fixed amount that bears no

relationship to any prior earnings; others supplement their

universal pension with an earnings-related pension.

Provident fund systems make a lump-sum payment,

usually a refund of employer and employee contributions

plus accrued interest. In programs that have mandatory

individual accounts, options for retirement include purchasing an annuity, making withdrawals from an account

regulated to guarantee income for an expected lifespan

(programmed withdrawals), or a combination of the two

(deferred annuity).

Benefits that are related to income are almost always

based on average earnings. Some countries compute the

average from gross earnings, including various fringe

benefits; other countries compute the average from net

earnings. Alternatively, some countries have opted to use

wage classes rather than actual earnings. The wage

classes may be based on occupations or, for administrative convenience, on earnings arranged by size using the

midpoint in each step to compute the benefit.

Several methods are used to compensate for averages

that may be reduced by low earnings early in a worker’s

career or by periods without any credited earnings due,

for example, to unemployment or military service, and for

the effects of price and wage increases due to inflation.

One method is to exclude from consideration a number of

periods with the lowest (including zero) earnings. In

many systems the period over which earnings are

averaged may be shortened to the last few years of

coverage, or the average may be based on years when

the worker had his or her highest earnings. Other

systems revalue past earnings by applying an index that

usually reflects changes in national average wages or the

cost of living. Some assign hypothetical wages before a

certain date. Alternatively, others have developed

mechanisms for automatic adjustment of workers’ wage

records based on wage or price changes.

A variety of formulas are used in determining the

benefit amount. Instead of a statutory minimum, some

systems pay a percentage of average earnings—for

instance, 35 percent or 50 percent—that is unchanged by

length of coverage once the qualifying period is met. A

more common practice is to provide a basic rate—for

example, 30 percent of average earnings—plus an

increment of 1 percent or 2 percent of earnings either for

each year of coverage or for each year in excess of a
SSPTW: Europe, 2004 ♦ 7

minimum number of years. Several countries have a

weighted benefit formula that returns a larger percentage

of earnings to lower-paid workers than to higher-paid

workers.

Most systems limit the size of the benefit. Many do so

by establishing a ceiling on the earnings taken into

account in the computation. Others establish a maximum

cash amount or a maximum percentage of average

earnings set, for example, at 80 percent. Some systems

combine these and other, similar methods.

Most systems supplement the benefit for a wife or

child. The wife’s supplement may be 50 percent or more

of the basic benefit, although in some countries the

supplement is payable only for a wife who has reached a

specified age, has children in her care, or is disabled. It

may also be payable for a dependent husband.

Minimum benefits are intended to maintain a minimum

standard of living in many countries, although that objective is not always achieved. A maximum that reduces the

effect large families have on benefits is commonly used

to limit total benefits, including those of survivors, in the

interest of the financial stability of the program.

In some countries, benefits are automatically adjusted

to reflect price or wage changes. In other countries, the

process is semiautomatic—the adequacy of pensions is

reviewed periodically by an advisory board or other

administrative body that recommends a benefit adjustment to the government, usually requiring legislative

approval.

Disability Benefit. Under most programs, provisions for

disability benefits for persons who are permanently

disabled as the result of nonoccupational causes are very

similar to those for the aged. The same basic formula

usually applies for total disability as for old age—a cash

amount usually expressed as a percentage of average

earnings. Increments and dependents’ supplements are

generally identical under the total disability and old-age

programs. For the totally disabled, a constant-attendance

supplement, usually 50 percent of the benefit, may be

paid to those who need help on a daily basis. Partial

disability benefits, if payable, are usually reduced,

according to a fixed scale. The system may also provide

rehabilitation and training. Some countries provide higher

benefits for workers in arduous or dangerous

employment.

Survivor Benefit. Most systems provide periodic

benefits for survivors of covered persons or pensioners,

although some pay only lump-sum benefits. Survivor

benefits are generally a percentage of either the benefit

paid to the deceased at death or the benefit to which the

insured would have been entitled if he or she had attained

pensionable age or become disabled at that time.

Survivor benefits are paid to some categories of

widows under nearly all programs. The amount of a

widow’s benefit usually ranges from 50 percent to

75 percent of the deceased worker’s benefit or, in some

cases, 100 percent. In some countries, lifetime benefits

are payable to every widow whose husband fulfills the

necessary qualifying period. More commonly, the

provision of widows’ benefits is confined to widows who

are caring for young children, are above a specified age,

or are disabled.

Lifetime benefits are ordinarily payable to aged and

disabled widows. Those awarded to younger mothers,

however, are usually terminated when all children have

passed a certain age, unless the widow has reached a

specified age or is disabled. Most widows’ benefits also

terminate on remarriage, although a final lump-sum grant

may be payable under this circumstance. Special provisions govern the rights of the divorced. Age limits for

orphan’s benefits are in many cases the same as for

children’s allowances. Many countries fix a somewhat

higher age limit for orphans attending school or undergoing an apprenticeship or for those who are incapacitated.

The age limit is usually removed for disabled orphans as

long as their incapacity continues. Most survivor programs distinguish between half orphans (who have lost

one parent) and full orphans (who have lost both parents), with the latter receiving benefits that are

50 percent to 100 percent larger than those for half

orphans. Special payments are also made to orphans

under the family allowance programs of some countries.

Benefits are payable under a number of programs to

widowers of insured workers or pensioners. A widower

usually must have been financially dependent on his wife

and either disabled or old enough to receive an old-age

benefit at her death. A widower’s benefit is usually

computed in the same way as a widow’s benefit.

Many systems also pay benefits to other surviving

close relatives, such as parents and grandparents, but

only in the absence of qualifying widows, widowers, or

children. The maximum total benefit to be divided among

survivors is usually between 80 percent and 100 percent

of the benefit of the deceased.

Administrative Organization. Responsibility for

administration generally rests with semiautonomous

institutions or funds. These agencies are usually subject

to general supervision by a ministry or government

department but otherwise are largely self-governing,

headed by a tripartite board that includes representatives

of workers, employers, and the government. Some

boards are bipartite with representatives of workers and

employers only or of workers and the government.

Where coverage is organized separately for different

occupations, or for wage earners and salaried employees
8 ♦ SSPTW: Europe, 2004

or self-employed workers, each program usually has a

separate institution or fund. In a few cases, the

administration of benefits is placed directly in the hands

of a government ministry or department.

Sickness and Maternity

Sickness benefit programs are generally of two types:

cash sickness benefits, which are paid when short-term

illnesses prevent work, and health care benefits, which

are provided in the form of medical, hospital, and

pharmaceutical benefits. Some countries maintain a

separate program for cash maternity benefits, which are

paid to working mothers before and after childbirth. In

most countries, however, maternity benefits are

administered as part of the cash sickness program.

(Benefits provided as a result of work injury or

occupational disease are provided either under work

injury or sickness programs. Details of the benefits are

discussed under Work Injury.)

Cash sickness and maternity benefits as well as health

care are usually administered under the same branch of

social security. For this reason, these programs are

grouped together in the country summaries.

An important reason for grouping these numerous

benefits together is that each deals with the risk of

temporary incapacity. Moreover, in most instances, such

benefits are furnished as part of a single system with

common financing and administration. Most countries

provide medical care services for sickness and maternity

as an integral part of the health insurance system and link

those services directly with the provision of cash benefits.

In some instances, however, maternity cash grants are

covered under family allowance programs. Occasionally,

medical care services are provided under a public health

program, independent of the social insurance system.

Where this dual approach is followed, it has been indicated in the summaries.

Where health care is dispensed directly by the government or its agencies and the principal source of funds is

general revenue, the cash benefit program usually

continues to be administered on an insurance basis,

funded by payroll contributions, and merged in some

instances with other aspects of the social insurance

system such as old age and disability. However, countries that deliver health care primarily through private

facilities and private funding are also likely to have

developed separate programs. Where the social security

program operates its own medical facilities, both types of

benefits are usually administered jointly.

Benefits designed to assist in the provision of longterm care, often at home, are generally supported by a

special tax. Benefit levels are normally set to the level of

care required. These benefits may be payable in cash, as

care services, or as a combination of the two.

Coverage. The proportion of the population covered by

sickness programs varies considerably from country to

country, in part because of the degree of economic

development. Coverage for medical care and cash

benefits is generally identical in countries where both

types of benefits are provided through the same branch

of social insurance. In a number of systems, particularly

in developing countries, health care insurance extends

only to employees in certain geographic areas. A

common procedure is to start the program in major urban

centers, then extend coverage gradually to other areas.

Both cash sickness and health care programs may

exclude agricultural workers, who, in some countries,

account for a major proportion of the working population.

Where a health insurance system (as distinguished from a

national health service program) exists, most workers

earning below a certain ceiling participate on a

compulsory basis. Others, such as the self-employed,

may be permitted to affiliate on a voluntary basis. In

several countries, higher-paid employees are specifically

excluded from one or both forms of sickness insurance,

although some voluntary participation is usually permitted.

Many countries include pensioners as well as other

social security beneficiaries under the medical care

programs, in some cases without cost to the pensioner.

Elsewhere, pensioners pay a percentage of their pension

or a fixed premium for all or part of the medical care

coverage. Special sickness insurance systems may be

maintained for certain workers, such as railway employees, seamen, and public employees.

Where medical care coverage is provided through a

national health service rather than social insurance, the

program is usually open in principle to virtually all residents. However, restrictions on services to aliens may

apply.

Source of Funds. Many countries have merged the

financing of sickness programs with that of other social

insurance benefits and collect only a single contribution

from employees and employers. More commonly,

however, a fixed percentage of wages, up to a ceiling, is

contributed by employees and employers directly to a

separate program that administers both health care and

cash benefits for sickness and maternity. Some countries

also provide a government contribution. Where medical

care is available to residents, generally through some type

of national health service, the government usually bears

at least the major part of the cost from general revenues.

Qualifying Conditions. Generally, a person becoming ill

must be gainfully employed, incapacitated for work, and
SSPTW: Europe, 2004 ♦ 9

not receiving regular wages or sick-leave payments from

the employer to be eligible for cash sickness benefits.

Most programs require claimants to meet a minimum

period of contribution or to have some history of work

attachment prior to the onset of illness to qualify. Some

countries, however, have eliminated the qualifying period.

The length of the qualifying period for cash sickness

benefits may range from less than 1 month to 6 months or

more and is ordinarily somewhat longer for cash maternity benefits. Usually the period must be fairly recent,

such as during the last 6 or 12 months. In the case of

medical benefits, a qualifying period is usually not required. In instances where such a requirement does

exist, it is generally of a short duration. Most programs

providing medical services to dependents of workers, as

well as to the workers themselves, do not distinguish in

their qualifying conditions between the two types of

beneficiaries. A few programs require a longer period of

covered employment before medical services are provided to dependents.

Cash Benefits. The cash sickness benefit is usually

50 percent to 75 percent of current average earnings,

frequently with supplements for dependents. Most

programs, however, fix a maximum benefit amount or do

so implicitly through a general earnings ceiling for

contributions and benefits. Benefits may be reduced

when beneficiaries are hospitalized at the expense of the

social insurance system.

A waiting period of 2 to 7 days is imposed under most

cash sickness programs. As a result, benefits may not be

payable if an illness or injury lasts for only a few days.

Similarly, in the case of a prolonged inability to work,

benefits may not be payable for the first few days.

Under some programs, however, benefits are retroactively paid for the waiting period when the disability

continues beyond a specified time, commonly 2 to 3

weeks. A waiting period reduces administrative and

benefit costs by excluding many claims for short illnesses

or injuries during which relatively little income is lost and

can also help reduce the potential for the inappropriate

use of the system by workers.

The period during which a worker may receive

benefits for a single illness or injury, or in a given

12-month period, is ordinarily limited to 26 weeks. In

some instances, however, benefits may be drawn for

considerably longer and even for an unlimited duration.

A number of countries permit the agency to extend the

maximum entitlement period to 39 or 52 weeks in specific

cases. In most countries, when cash sickness benefits

are exhausted, the recipient is paid a disability benefit if

the incapacity continues.

Cash maternity benefits are usually payable for a

specified period, both before and after childbirth. A

woman is almost always required to stop working while

receiving maternity benefits, and usually she must use the

prenatal and postnatal medical services provided by the

system. In some countries, cash maternity benefits are

also payable to working men who stay home to care for a

newborn child while the mother returns to work. Cash

payments may also be available for a parent, usually the

mother, who is absent from work to care for a sick child

under a specified age.

The proportion of earnings payable as a cash maternity

benefit differs considerably from country to country but,

like cash sickness benefits, is usually between 50 percent

and 75 percent of current earnings. However, in a

number of countries, maternity benefits are set at

100 percent of wages. Benefit payments usually start

approximately 6 weeks before the expected date of

childbirth and end 6 to 8 weeks afterward.

A nursing allowance—usually 20 percent or 25 percent

of the regular maternity benefit and payable for up to

6 months or longer—may be provided in addition to the

basic cash maternity benefit. A grant for the purchase of

a layette—clothes and other essentials for the new-born

baby—or the provision of a layette itself is furnished

under some programs. Finally, a lump-sum maternity

grant may be paid on the birth of each child. The wives

of insured men may be eligible for this grant. Similar

benefits may be provided under the family allowance

program.

Medical Benefits. Medical services usually include at

least general practitioner care, some hospitalization, and

essential drugs. Services of specialists, surgery,

maternity care, some dental care, a wider range of

medicines, and certain appliances are commonly added.

Transportation of patients and home-nursing services may

be included.

There are three principal methods of meeting the cost

of health care: direct payment to providers by the public

system or its agents, reimbursement of patients, and

direct provision of medical care. These methods may be

used in different combinations and may be varied for

different kinds of services.

Under direct payment, the social security or public

medical care system pays providers directly for services.

Patients usually have little or no direct financial dealings

with the care provider. Payments for care are commonly

made on the basis of contracts with service providers or

the professional groups representing them, such as

practitioner or hospital associations. Remuneration may

take the form of a specified fee for each service, a

capitation payment in return for providing all necessary

services to a given group of persons, or a salary.

Under the reimbursement method, the patient makes

the initial payment and is reimbursed by social security
10 ♦ SSPTW: Europe, 2004

for at least part of the cost. A maximum is sometimes

placed on the refund, expressed as a percentage of the

bill or a flat amount that can vary with the nature of the

service as stipulated in a schedule of fees. The ceiling on

medical bills can be placed on the provider when presenting the bill or on the patient when applying for reimbursement. In the latter case, the patient may be reimbursed

for only a small portion of the bill.

Under the direct-provision method, the social security

system or the government owns and operates its own

medical facilities, largely manned by salaried staff.

Countries using this method may contract for services of

public or private providers. The patient normally pays no

fee for most of these services, except insofar as part of

the social security contribution may be allotted toward

health care funding.

Regardless of the funding method used, all national

health care programs provide for at least a small degree

of cost-sharing by patients, usually on the assumption that

such charges discourage overuse. Thus, the patient

either pays part of the cost to the provider or social

security agency or receives less than full reimbursement.

Even under the direct-provision method, with its emphasis

on basically free medical services to the whole population, patients are generally required to pay a small fixed

fee per medical treatment or prescription or per day of

hospitalization.

Some health care systems have no limit on how long

medical care may be provided. Other systems fix a

maximum, such as 26 weeks, for services provided for

any given illness. Some set limits only on the duration of

hospitalization paid for by social security. Where time

limits are imposed, they may be extended.

Maternity Care. Prenatal, obstetric, and postnatal care

for working women is provided in most countries under

the medical services program. Obstetric care is

sometimes limited to the services of a midwife, although

a doctor is usually available in case of complications.

Care in a maternity home or hospital, as well as essential

drugs, are ordinarily furnished where necessary.

Medical Care for Dependents. When medical benefits

for insured workers are provided through social

insurance, similar services are typically furnished to their

spouse and young children (and, in some cases, other

adults or young relatives living with and dependent on the

insured). Maternity care is generally provided to the wife

of an insured man.

In some countries, however, medical services available

to dependents are more limited than those provided to

insured workers or heads of families. Dependents may

be subject to a shorter maximum duration for hospital

stays, for example, and may have to pay a larger percentage of the cost of certain services such as medicines.

Administrative Organization. The administrative

organization for the sickness and maternity program is

similar to that of the old-age, disability, and survivor

program in many countries. Most commonly, such

programs are administered by some form of national

social security institution. Under some systems, social

security agencies own and operate their own medical

facilities, furnishing at least part of the services available

under their programs.

In most countries with a national health insurance

program, responsibility for detailed administration lies

with semiautonomous, nongovernment health funds or

associations. All workers covered by the program must

join one of these funds.

Each health fund usually requires government approval

and must satisfy certain requirements. Workers and, in

some countries, employers participate in the election of

governing bodies. The funds normally collect contributions within minimum and maximum limits. Funds may

also receive government subsidies related to their expenditures or to the number of affiliated members.

National law usually prescribes the minimum (and, in

some cases, the maximum) cash benefits and medical

services the health funds may provide. In a few countries, individual funds may determine what specific health

care benefits and services to provide and arrange to

furnish medical care to their members. This arrangement

can involve delivery through contracts with care and

service providers in the region.

Less commonly, government departments are responsible for the actual provision of medical services, usually

through a national health service program. The administrative responsibility for delivering medical services in

some countries is often separated from the administration

of cash benefit programs, which tend to be linked with

other types of social security benefits.

Work Injury

The oldest type of social security—the work injury

program—provides compensation for work-connected

injuries and occupational illnesses. Such programs

usually furnish short- and long-term benefits, depending

on both the duration of the incapacity and the age of

survivors. Work injury benefits nearly always include

cash benefits and medical services. Most countries

attempt to maintain separate work injury programs that

are not linked directly with other social security

measures. In some countries, however, work injury

benefits are paid under special provisions of the general

social security programs. Both types of programs are

dealt with under Work Injury.
SSPTW: Europe, 2004 ♦ 11

Types of Systems. There are two basic types of work

injury systems: social insurance systems that use a public

fund, and various forms of private or semiprivate

arrangements required by law. In most countries, work

injury programs operate through a central public fund,

which may or may not be part of the general social

insurance system. All employers subject to the program

must pay contributions to the public carrier, which in turn

pays the benefits.

Countries that rely primarily on private arrangements

require employers to insure their employees against the

risk of employment injury. However, in some of these

countries, only private insurance is available. In the

remainder, a public fund does exist, but employers are

allowed the option of insuring with either a private carrier

or the public fund.

The premiums charged by private or mutual insurance

companies for work injury protection usually vary according to the experience of work accidents in different

undertakings or industries, and the cost of protection may

vary widely. In some countries, however, experience

rating has been eliminated, and all employers contribute

to the program at one rate.

In other instances, workers’ compensation laws simply

impose on employers a liability to pay direct compensation to injured workers or their survivors. Employers

covered under such laws may simply pay benefits from

their own funds as injuries occur or may voluntarily

purchase a private or mutual insurance contract to

protect themselves against risk.

Coverage. Work injury programs commonly cover wage

and salary workers and exclude the self-employed. The

programs of some of the more highly industrialized

nations cover practically all employees. However, many

countries either exclude all agricultural employees or

cover only those who operate power-driven machinery.

Some programs also exclude employees of small

enterprises.

Source of Funds. Work injury benefits are financed

primarily by employer contributions, reflecting the

traditional assumption that employers should be liable

when their employees suffer work injuries. Where

certain elements of the work injury program are meshed

with one or more of the other branches of the social

insurance system, however, financing usually involves

contributions from employees, employers, and the

government. Another exception occurs in countries that

provide medical treatment for work-connected illnesses

under their ordinary public medical care programs.

Work Injury Benefits. Work injury programs provide

cash benefits and medical benefits. Cash benefits under

work injury programs may be subdivided into three types:

benefits for temporary disability, those for permanent

total disability, and those for permanent partial disability.

No qualifying period of coverage or employment is

ordinarily required for entitlement to work injury benefits.

The concept of work-connected injury has gradually been

liberalized in a number of countries to cover injuries

occurring while commuting to and from work.

Temporary disability benefits are usually payable from

the start of an incapacity caused by a work injury, though

some programs require a waiting period of 1 to 3 days.

Benefits normally continue for a limited period, such as

26 to 52 weeks, depending on the duration of incapacity.

If incapacity lasts longer, the temporary disability benefit

may be replaced by a permanent disability benefit. In

some systems, temporary benefits may continue for an

extended period, particularly if the temporary and permanent benefit amounts are identical.

The temporary benefit is nearly always a fraction of

the worker’s average earnings during a period immediately before injury, usually at least one-third to one-half.

A ceiling may be placed on the earnings considered in

computing a benefit. Temporary benefits under work

injury programs may be significantly higher than in the

case of ordinary sickness. Benefits are reduced under

some programs when a worker is hospitalized.

The second type of cash work injury benefit is provided in cases of permanent total disability. Generally, it

becomes payable immediately after the temporary

disability benefit ceases, based on a medical evaluation

that the worker’s incapacity is both permanent and total.

The permanent total disability benefit is usually payable

for life, unless the worker’s condition changes. A

minority of programs, however, pay only a single lumpsum grant equal to several years’ wages.

The permanent total disability benefit usually amounts

to two-thirds to three-fourths of the worker’s average

earnings before injury, somewhat higher than for ordinary

disability benefits. In addition, unlike ordinary disability

benefits, the rate usually does not vary based on the

length of employment before the injury. Supplements

may be added for dependents and for pensioners requiring the constant attendance of another person, in which

case benefits may exceed former earnings. In some

countries, the benefits of apprentices or new labor force

entrants who become permanently disabled as a result of

work-connected injury or disease are based on hypothetical lifetime wages or on the wage of an average worker

in the particular industry. This mechanism overcomes the

problem of establishing a lifetime benefit based on a very

low starting wage.

The third type of cash work injury benefit is provided

when permanent partial disability results in a worker’s

loss of partial working or earning capacity. It is usually

equal to a portion of the full benefit corresponding to the
12 ♦ SSPTW: Europe, 2004

percentage loss of capacity. Alternatively, permanent

partial disability benefits may be paid in the form of a

lump-sum grant. Partial disability payments are generally

smaller and are usually stipulated in a schedule of payments for particular types of injuries. Some systems pay

the benefit as a lump sum when the extent of disability is

below a stated percentage, such as 20 percent.

Medical and hospital care and rehabilitation services

are also provided to injured workers. Nearly always

free, they may include a somewhat wider range of

services than the general sickness program. Ordinarily,

they are available until the worker recovers or the

condition stabilizes. In some countries, however, free

care is limited, the amount being based on the duration of

services or their total cost.

Survivor Benefits. Most work injury programs also

provide benefits to survivors. These benefits are

customarily payable to a widow, regardless of her age,

until her death or remarriage; to a disabled widower; and

to orphans below specified age limits. If the benefit is

not exhausted by the immediate survivors’ claims,

dependent parents or other relatives may be eligible for

small benefits. No minimum period of coverage is

required.

Survivor benefits are computed as a percentage of

either the worker’s average earnings immediately before

death or the benefit payable (or potentially payable) at

death. These percentages are typically larger than those

for survivor benefits under the general program and do

not normally vary with the length of covered employment.

They are usually about one-third to one-half of the

worker’s average earnings for a widow, about half as

much for each half orphan, and about two-thirds as much

for each full orphan. A limit is commonly placed on the

combined total of survivor benefits.

Not all countries, however, provide work injury benefits to survivors, and some do not differentiate between

survivors in this category and survivors entitled to benefits under other social insurance programs. Some

schemes pay only a lump sum equal to the worker’s

earnings over a specified number of years. Most systems also pay a funeral grant equivalent to a fixed sum or

a percentage of the worker’s earnings.

Administrative Organization. The functions involved in

administering work injury programs differ widely between

countries in which employers are not required to insure or

can insure with private carriers and those in which a

public agency or fund has sole responsibility for both

collecting contributions and paying benefits.

Unemployment

Benefits in this category provide compensation for the

loss of income resulting from involuntary unemployment.

In some countries, these programs are independent of

other social security measures and may be closely linked

with employment services. In other countries, the

unemployment programs are included with social security

measures covering other short-term risks, although

employment services may continue to verify

unemployment and assist in a job search.

Unemployment programs, which exist mainly in

industrialized countries, are compulsory and fairly broad

in scope in many countries. Some countries restrict

benefits to those who satisfy a means or income test. In

addition to the programs offering scheduled payments, a

number of countries provide lump-sum grants, payable by

either a government agency or the employer; other

countries provide mandatory individual severance accounts, providing total benefits equal to the value of

accumulated capital in the individual account. In addition,

employers in many instances are required to pay lumpsum severance indemnities to discharged workers.

Coverage. About half of the compulsory unemployment

programs cover the majority of employed persons,

regardless of the type of industry. Coverage under the

remaining programs is limited to workers in industry and

commerce. A few exclude salaried employees earning

more than a specified amount. Some have special

provisions covering temporary and seasonal employees.

Several countries have special occupational

unemployment programs, most typically for workers in

the building trades, dockworkers, railway employees, and

seafarers.

Voluntary insurance systems are limited to industries in

which labor unions have established unemployment funds.

Membership in these funds is usually compulsory for

union members in a covered industry and may be open on

a voluntary basis to nonunion employees. Noninsured

workers, such as recent school graduates or the selfemployed, for example, may be eligible for a governmentsubsidized assistance benefit when they become

unemployed.

Source of Funds. The methods used to finance

unemployment insurance are usually based on the same

contributory principles as for other branches of social

insurance—contributions amounting to a fixed percentage

of covered wages are paid on a scheduled basis. In

many cases, the government also grants a subsidy,

particularly for extended benefits.

Unemployment insurance contributions are shared

equally between employees and employers in many
SSPTW: Europe, 2004 ♦ 13

countries. Alternatively, the entire contribution may be

made by the employer. However, government subsidies

may be quite large, amounting to as much as two-thirds

of the program’s expenditures. Means-tested unemployment assistance programs are financed entirely by

governments, with no employer or employee contribution.

Qualifying Conditions. To be entitled to unemployment

benefits, a worker must be involuntarily unemployed and

have completed a minimum period of contributions or

covered employment. The most common qualifying

period is 6 months of coverage within the year before

employment ceased. In a number of industrialized

countries, however, students recently out of school who

are unable to find jobs may be eligible for unemployment

benefits, even without a work record. This benefit

provides a transition from school to work, particularly in

periods of recession.

Nearly all unemployment insurance programs, as well

as those providing unemployment assistance, require that

applicants be capable of, and available for, work. An

unemployed worker, therefore, is usually ineligible for

unemployment benefits when incapacitated or otherwise

unable to accept a job offer. Usually, the unemployed

worker must register for work at an employment office

and report regularly for as long as payments continue.

This close linkage between unemployment benefits and

placement services ensures that benefits will be paid only

after the person has been informed of any current job

opportunities and been found unsuitable.

An unemployed worker who refuses an offer of a

suitable job without good cause usually will have benefits

temporarily or permanently suspended. Most programs

stipulate that the job offered must have been suitable for

the worker. The definitions of suitable employment vary

considerably. Generally, the criteria include the rate of

pay for the job being offered in relation to previous

earnings; distance from the worker’s home; relationship

to the worker’s previous occupation, capabilities, and

training; and the extent to which the job may involve

dangerous or unhealthy work. In some countries, longterm unemployed workers may also be obliged to undertake employment retraining programs. Some countries

also provide the unemployed with access to educational

placements. If an unemployed worker refuses a place on

a retraining program or fails, without good cause, to

attend an educational placement, benefits can be temporarily or permanently suspended.

An unemployed worker may satisfy all of the qualifying conditions for a benefit but still be temporarily or

permanently disqualified. Nearly all unemployment

systems disqualify a worker who left voluntarily without

good cause, was dismissed because of misconduct, or

participated in a labor dispute leading to a work stoppage

that caused the unemployment. The period of disqualification varies considerably, from a few weeks to permanent disqualification.

Unemployment Benefits. Weekly benefits are usually a

percentage of average wages during a recent period. A

system of wage classes rather than a single fixed

percentage is used in some countries. The basic rate of

unemployment benefits is usually between 40 percent and

75 percent of average earnings. However, a ceiling on

the wages used for benefit computations or maximum

benefit provisions may considerably narrow the range

within which the basic percentage of wages applies.

Flat-rate amounts are sometimes payable instead of

graduated benefits that vary with past wages and customarily differ only according to the family status or,

occasionally, the age of the worker. Supplements for a

spouse and children are usually added to the basic benefit

of unemployed workers who are heads of families.

These supplements are either flat-rate amounts or an

additional percentage of average earnings.

Most countries have a waiting period of several days

before unemployment benefits become payable to reduce

the administrative burden of dealing with a very large

number of small claims. Most waiting periods are

between 3 and 7 days. Some programs have a waiting

period for each incident of unemployment, and others

limit eligibility to once a year. Longer waiting periods

may be prescribed for certain workers, such as the

seasonally employed.

Most countries place a limit on the period during which

unemployment benefits may be continuously drawn.

Typically, this limit varies from 8 to 36 weeks but may be

longer in certain cases.

Duration of benefits may also depend on the length of

the preceding period of contribution or coverage under

the program. That criterion may reduce the maximum

duration of unemployment benefits for workers with brief

work histories. However, workers with a long history of

coverage may, under some programs, have their benefit

period extended well beyond the ordinary maximum.

Many unemployed workers who exhaust the right to

ordinary benefits continue to receive some assistance,

provided their means or incomes are below specified

levels. Recipients are usually required to continue

registering and reporting at an employment exchange.

Some countries that have unemployment assistance but

no insurance program do not place any limit on the

duration of payments. A number of countries require that

insured workers approaching retirement age who have

been out of work for a specified period be removed from

the unemployment rolls and granted a regular old-age

benefit.
14 ♦ SSPTW: Europe, 2004

Administrative Organization. Unemployment insurance

systems may be administered by government

departments or self-governing institutions that are usually

managed by representatives of insured persons,

employers, and the government.

Unemployment insurance and placement service

programs usually maintain a close administrative relationship that ensures that benefits are paid only to workers

who are registered for employment. At the same time,

this liaison increases the effectiveness of the placement

services by providing an incentive, through payment of

benefits, for unemployed persons to register and report

regularly.

Some countries have merged the administration of

unemployment insurance and employment service

programs, especially at the lower administrative levels

where claims are received and benefits are paid by the

local employment office. Other countries require persons

to register with a local employment office, but the receipt

of claims and payment of benefits are handled by a

separate insurance office.

In addition to providing an income for the unemployed,

many governments have elaborate measures to prevent

or counteract unemployment. The typical procedure is

for government employment services to work with

industry to promote occupational and geographic mobility

of labor and to minimize unemployment caused by

economic or technological developments; they do that by

subsidizing the retraining and relocation of workers in

industries that are declining or being restructured. Governments may grant tax and other incentives to industry

to locate in areas of high unemployment, or they may

allocate funds to create jobs in anticipation of periods of

seasonal unemployment.

Family Allowances

The general purpose of family allowance programs is to

provide additional income for families with young children

in order to meet at least part of the added costs of their

support. These programs may either be integrated with

other social security measures or kept entirely separate.

In this report, family allowances primarily include regular

cash payments to families with children. In some

countries, they also include school grants, birth grants,

maternal and child health services, and allowances for

adult dependents.

Most industrialized countries have family allowance

programs that originated in Europe in the 19th century

when some large companies began paying premiums to

workers with large families. The idea spread gradually,

and several European countries enacted programs during

the 1920s and 1930s. Most programs in operation today,

however, have been in place since 1945.

Types of Systems and Coverage. Family allowance

programs are of two types: universal and employmentrelated. The first category, in principle, provides

allowances to all resident families with a specified

number of children. The second category provides

allowances to all wage and salary workers and, in some

cases, the self-employed. A few systems cover some

categories of nonemployed persons as well. Most

employment-related programs continue to pay family

allowances to insured persons with dependent children in

their care when they retire or are temporarily off the job

and receiving sickness, unemployment, work injury,

disability, or other benefits. Employment-related family

programs also pay allowances to widows of social

security beneficiaries.

Source of Funds. The differences in family allowance

programs are reflected in the methods used for financing.

In universal systems, the entire cost is usually covered by

general revenue. By contrast, countries linking eligibility

with employment meet the cost of allowances entirely or

in considerable part from employer contributions, usually

at a uniform percentage-of-payroll rate. If employer

contributions do not cover the entire cost, the remainder

is usually met from a government subsidy. Few countries

require an employee contribution toward family

allowances, although some require self-employed persons

to contribute.

Eligibility. Eligibility is commonly related to the size of

the family and, in some cases, to family income. Many

countries pay allowances beginning with the first child.

In addition, some countries pay an allowance for a

nonemployed wife or other adult dependent, even if there

are no children.

In some countries, families with only one child are

ineligible. Age requirements vary but are usually tied to

the last year of school or the minimum working age,

which are often the same and fall somewhere between

ages 14 and 18. Under most programs, the continuation

of schooling, apprenticeship, or vocational training

qualifies a child for an extension of the age limit. In the

case of disabled children, many countries extend the age

limit beyond that for continued education or pay allowances indefinitely.

Benefits. Whether a program pays a uniform rate for all

children or an increasing or decreasing amount for each

additional child may reflect the history or the intent of the

program. The allowance structure may vary, for
SSPTW: Europe, 2004 ♦ 15

example, depending on whether the primary intent is to

provide assistance or stimulate population growth. The

allowance in most countries is a uniform amount for

every child, regardless of the number of children in a

family. The allowance in most of the other countries

increases for each additional child; the payment for a

fifth child, for example, may be considerably larger than

that for the first or second child. In a few countries, the

allowance per child diminishes or ceases with the addition

of children beyond a certain number. In some countries,

family allowances (and tax exemptions for dependent

family members) have been replaced or supplemented by

credits or other forms of a negative income tax.

Administrative Organization. In countries where family

allowances are available to all families and financed from

general revenues, the program is usually administered by

a government department. Where allowances are

payable mainly to families of employed persons and

financed primarily from employer contributions, the

administration may be by a semiautonomous agency

under public supervision. Equalization funds may handle

the program’s financial operations. Each employer pays

family allowances to its employees with their wages.

The firm then settles with the local fund only the surplus

or deficit of contributions due, after deducting allowances

the firm has paid. A similar procedure of settling only

surpluses or deficits is followed by the local funds in

relation to the regional equalization funds under whose

supervision they operate. The equalization process

makes it possible to fix a uniform contribution rate for all

employers, regardless of the number of children in their

employees’ families. It also eliminates any effect

allowances might have in inducing employers to

discriminate in hiring workers with children.
16 ♦ SSPTW: Europe, 2004

(Continued)

Table 1.

Types of social security programs

 Sickness and maternity

Old age, Cash Cash

disability, benefits benefits plus Work Family

Country survivors for both medical care a injury Unemployment allowances

Albania XX X X X X

Andorra XX X X b b

Austria XX X X X X

Belarus XX X X X X

Belgium XX X X X X

Bulgaria XX X X X X

Croatia XX X b X X

Cyprus XX X X X X

Czech Republic XX X X X X

Denmark XX X X X X

Estonia XX X X X X

Finland XX X X X X

France XX X X X X

Germany XX X X X X

Greece XX X X X X

Guernsey XX X X X X

Hungary XX X X X X

Iceland XX X X X X

Ireland XX X X X X

Isle of Man XX X X X X

Italy XX X X X X

Jersey XX X X X X

Latvia XX X X X X

Liechtenstein XX X X X X

Lithuania XX X X X X

Luxembourg XX X X X X

Malta XX X X X X

Moldova XX X X X X

Monaco XX X X c d X

Netherlands XX X b X X

Norway XX X X X X
SSPTW: Europe, 2004 ♦ 17

Table 1.

Continued

 Sickness and maternity

Old age, Cash Cash

disability, benefits benefits plus Work Family

Country survivors for both medical care a injury Unemployment allowances

Poland XX X X X X

Portugal XX X X X X

Romania XX X X X X

Russia XX X X X X

San Marino XX X X X e

Serbia XX X X X X

Slovak Republic XX X X X X

Slovenia XX X X X X

Spain XX X X X X

Sweden XX X X X X

Switzerland XX X X X X

Ukraine XX X X X X

United Kingdom XX X X X X

SOURCE: Based on information in the country summaries in this volume.

a. Coverage is provided for medical care, hospitalization, or both.

b. Coverage is provided under other programs or through social assistance.

c. Mandatory private insurance.

d. Coverage is provided through France’s program.

e. Not available.
18 ♦ SSPTW: Europe, 2004

Table 2.

Types of mandatory systems for retirement income

Occupational Individual

Flat- Earnings- Means- Flat-rate Provident retirement retirement

 Country rate related tested universal funds a schemes schemes

Albania X b X b

Andorra X

Austria X X

Belarus X X

Belgium X X

Bulgaria XX X

Croatia X X

Cyprus X X

Czech Republic X b X b

Denmark XX X

Estonia XX X

Finland X X

France XX X

Germany X

Greece X

Guernsey X X

Hungary X X

Iceland X X

Ireland X X

Isle of Man XX X

Italy X X

Jersey X

Latvia X X

Liechtenstein X X

Lithuania X b X b

Luxembourg X b X b

Malta X c X c X

Moldova X X

Monaco X

Netherlands X X

Norway X X

(Continued)
SSPTW: Europe, 2004 ♦ 19

Table 2.

Continued

Occupational Individual

Flat- Earnings- Means- Flat-rate Provident retirement retirement

 Country rate related tested universal funds a schemes schemes

Poland X b X b X d

Portugal X X

Romania X

Russia X b X b X X e

San Marino X

Serbia X

Slovak Republic X

Slovenia X

Spain X

Sweden XX X

Switzerland X b X b X X

Ukraine X X

United Kingdom XX X

SOURCE: Based on information in the country summaries in this volume.

NOTE: The types of mandatory systems for retirement income are defined as follows:

Flat-rate pension: A pension of uniform amount or one based on years of service or residence but independent of

earnings. It is financed by payroll tax contributions from employees, employers, or both.

Earnings-related pension: A pension based on earnings. It is financed by payroll tax contributions from employees,

employers, or both.

Means-tested pension: A pension paid to eligible persons whose own or family income, assets, or both fall below

designated levels. It is generally financed through government contributions, with no contributions from employers or

employees.

Flat-rate universal pension: A pension of uniform amount normally based on residence but independent of earnings. It is

generally financed through government contributions, with no contributions from employers or employees.

Provident funds: Employee and employer contributions are set aside for each employee in publicly managed special

funds. Benefits are generally paid as a lump sum with accrued interest.

Occupational retirement schemes: Employers are required by law to provide private occupational retirement schemes

financed by employer and, in some cases, employee contributions. Benefits are paid as a lump sum, annuity, or pension.

Individual retirement schemes: Employees and, in some cases, employers must contribute a certain percentage of

earnings to an individual account managed by a public or private fund manager chosen by the employee. The accumulated

capital in the individual account is used to purchase an annuity, make programmed withdrawals, or a combination of the two

and may be paid as a lump sum.

a. No country in Europe has provident funds. The column is in this table to facilitate comparisons with countries in other

 regions.

b. The benefit formula contains a flat-rate component as well as an earnings-related element.

c. The benefit formula contains a flat-rate component as well as an earnings-related element. Earnings-related benefits are

 awarded only to those with entitlements since January 22, 1979.

d. The government provides a guaranteed minimum pension.

e. The benefit from the individual account is to be paid beginning 2013.
20 ♦ SSPTW: Europe, 2004

(Continued)

Table 3.

Demographic and other statistics related to social security, 2004

Albania 3.1 5.9 55.9 70.9 76.7 65 60 c c 3,680

Andorra 0.7 13.2 39.4 80.5 86.5 65 65 c c 19,000

Austria 8 15.6 47.4 75.4 81.5 65 60 61.5 56.5 26,730

Belarus 10.1 13.3 47.1 62.8 74.4 60 55 c c 7,620

Belgium 10.2 17 52.2 75.7 81.9 65 63 60 60 25,520

Bulgaria 7.9 16.1 46.8 67.1 74.8 62.5 57.5 c c 6,890

Croatia 4.6 14.1 47.5 70.3 78.1 63 58 58 53 9,170

Cyprus 0.8 11.5 52.9 76 80.5 65 65 63 63 21,190

Czech

Republic 10.2 13.8 43.4 72.1 78.7 61.5 56 58.5 53 14,720

Denmark 5.3 15 49.8 74.2 79.1 65 d 65 d 60 60 29,000

Estonia 1.4 14.4 47.2 65.8 76.4 63 59 c c 10,170

Finland 5.1 14.9 49.2 74.4 81.5 65 65 60 60 24,430

France 59.2 16 53.2 75.2 82.8 60 60 c c 23,990

Germany 82 16.4 46.9 75 81.1 65 65 60 60 25,350

Greece 10.6 17.6 48.4 75.9 81.2 65 60 60 55 17,440

Guernsey 0.06 17.4 49.7 77 83.1 65 65 c c 20,000

Hungary 9.9 14.6 46.2 67.8 76.1 62 59 60 57 12,340

Iceland 0.3 11.7 53.7 77.1 81.8 67 67 c c 29,990

Ireland 3.8 11.3 49 74.4 79.6 66 66 c c 32,410

Isle of Man 0.07 17.1 52.9 74.6 81.5 65 60 c c 21,000

Italy 57.5 18.1 47.8 75.5 81.9 65 60 c c 24,670

Jersey 0.09 15 48.8 76.4 81.5 65 65 63 63 24,800

Latvia 2.4 14.8 47.4 65.7 76.2 62 59.5 60 57.5 7,730

Liechtenstein 0.03 11.3 41.6 75.6 82.8 64 63 60 60 25,000

Lithuania 3.7 13.4 48.9 67.6 77.7 62.5 59 57.5 54 8,470

Luxembourg 0.4 14.4 49.4 74.6 80.9 65 65 60 60 53,780

Malta 0.4 12.4 48.2 75.9 81 61 60 c c 13,160

Moldova 4.3 9.3 48 62.8 70.3 62 57 c c 2,150

Monaco 0.03 22.4 61 75.3 83.3 65 65 60 60 27,000

Netherlands 15.8 13.6 46.9 75.6 81 65 65 c c 27,190

Norway 4.5 15.4 54.2 76 81.9 67 67 c c 29,620

Men Women Men Women Men Women

Total

population

Country (millions)

Early 

pensionable

age b

Statutory

pensionable 

age

Life 

expectancy 

at birth

GDP

per

capita

(US$)

Dependency

ratio a

Percentage

65 or 

older
SSPTW: Europe, 2004 ♦ 21

Table 3.

Continued

Poland 38.6 12.1 45.5 69.8 78 65 60 c c 9,450

Portugal 10 15.6 47.7 72.6 79.6 65 65 55 55 18,150

Romania 22.4 13.3 46.1 66.5 73.3 65 60 55 55 5,830

Russia 145.5 12.5 43.8 60 72.5 60 55 c c 7,100

San Marino 0.03 16.6 33.8 77.9 85.2 60 60 c c 34,600

Serbia e 10.6 15.3 52.9 71 77.1 63 58 53 53 2,200

Slovak

Republic 5.4 11.4 44.7 69.8 77.6 62 62 c c 11,960

Slovenia 2 13.9 42.4 72.3 79.6 63 60 c c 17,130

Spain 39.9 17 46.4 75.4 82.3 65 65 c c 20,150

Sweden 8.8 17.4 55.3 77.6 82.6 65 65 61 61 24,180

Switzerland 7.1 16 48.5 75.9 82.3 65 63 c c 28,100

Ukraine 49.5 13.8 46.3 62.7 73.5 60 55 c c 4,350

United

Kingdom 59.4 15.8 53.2 75.7 80.7 65 60 c c 24,160

SOURCES: United Nations Population Division, Department of Economic and Social Affairs. 2002. World Population Ageing

1950–2050. New York: United Nations; Human Development Report 2003, 2003. Prepared for the United Nations Development

Programme. New York: Oxford University Press; U.S. Central Intelligence Agency. 2003. The World Factbook, 2003. Washington

D.C.: Central Intelligence Agency. Information on statutory and pensionable ages is taken from the country summaries in this

volume.

NOTE: GDP = gross domestic product.

a. Population aged 14 and under plus population aged 65 or older, divided by population aged 15–64.

b. General early pensionable age only; excludes early pensionable ages for specific groups of employees.

c. The country has no early pensionable age, has one only for specific groups, or information is not available.

d. From July 1, 2004.

Men Women Men Women Men Women

Total

population

Country (millions)

Early 

pensionable

age b

Statutory

pensionable 

age

Life 

expectancy 

at birth

GDP

per

capita

(US$)

Dependency

ratio a

Percentage

65 or 

older

e. Population statistics for Serbia also include data for Montenegro.
22 ♦ SSPTW: Europe, 2004

Table 4.

Contribution rates for social security programs, 2004 (in percent)

Albania 9.5 b 29.9 39.4 9.5 39.5 49 c

Andorra 2 b 6 b 8 b 5 11 16

Austria d 10.25 12.55 22.8 17.15 24.95 42.1

Belarus 1 b 10 b 11 b 1 11 12 e

Belgium d 7.5 8.86 16.36 13.07 17.92 30.99

Bulgaria 21.75 7.25 29 25 17.7 42.7 c

Croatia d 20 0 20 20 17.2 37.2 c

Cyprus d 6.3 b 6.3 b 12.6 b 6.3 6.3 12.6 c

Czech Republic d 6.5 21.5 28 12.5 37 49.5 c

Denmark d f f f f f c,f

Estonia d 2 b 33 b 35 b 2 33 35 c,g

Finland 4.6 22.75 27.35 6.1 25.364 31.464 c,g

France d 6.65 9.8 16.45 15.45 33.86 49.31

Germany d 9.75 9.75 19.5 20 21.33 41.33 c

Greece d 6.67 13.33 20 11.55 24.1 35.65

Guernsey d 6 b 5.5 b 11.5 b 6 5.5 11.5 c

Hungary d 8.5 b 18 b,h 26.5 b 13.5 32 45.5 c

Iceland 4 b 11.64 b 15.64 b 4 11.64 15.64 c

Ireland d 8 b 10.75 b 18.75 b 8 10.75 18.75 c

Isle of Man d 10 b 12.8 b 22.8 b 10 12.8 22.8 c

Italy d 8.89 23.81 32.7 8.89 i 30.9 i 39.79 i

Jersey d 5.2 b 5.3 b 10.5 b 6 6.5 12.5 c,g

Latvia 2 18 20 j j 24.35 c

Liechtenstein d 9.4 9.4 18.8 11.15 13.25 24.4 e

Lithuania 2.5 23.4 25.9 3 28 31 c

Luxembourg d 8 8 16 16.4 13.56 29.96 c

Malta d 10 b 10 b 20 b 10 10 20

Moldova 2 b 28 b 30 b 2 28 30

Monaco d 6.15 b 22.96 b 29.11 b 6.15 22.96 29.11

Netherlands d 19.15 8.9 28.05 39.45 i 17.2 56.65 c,k

Norway 7.8 b 14.1 b 21.9 b 7.8 14.1 21.9 c

(Continued)

Insured

person Employer Total

Insured

person Employer Total

Old age, disability, survivors 

Country

All social security programs a
SSPTW: Europe, 2004 ♦ 23

Table 4.

Continued

Poland d 16.26 16.26 32.52 26.96 19.68 46.64 c

Portugal 11b 23.75 b 34.75 b 11 23.75 34.75

Romania d,l 11.66 b 23.34 b 35 b 19.66 35.34 55 c

Russia 0 28 b 28 b 0 28.2 28.2 g

San Marino 1.9 b 10 b 11.9 b 5.9 16.5 22.4

Serbia d 16 16 32 26.6 26.6 53.2

Slovak Republic 7 19 26 9.4 25.6 35 c

Slovenia 15.5 b 8.85 b 24.35 b 22.1 15.9 38 c

Spain d 4.7 23.6 28.3 6.25 31.58 37.83 c

Sweden d 7 11.91 18.91 7 25.87 32.87 c,m

Switzerland d 11.9 11.9 23.8 12.9 13 25.9 e

Ukraine 3 b 32 b 35 b 3.25 35 38.25

United Kingdom 11 b 12.8 b 23.8 b 11 12.8 23.8 c

SOURCE: Based on information in the country summaries in this volume.

a. Includes Old Age, Disability, and Survivors; Sickness and Maternity; Work Injury; Unemployment; and Family Allowances. In

some countries, the rate may not cover all of these programs. In some cases, only certain groups, such as wage earners, are

represented. When the contribution rate varies, either the average or the lowest rate in the range is used.

b. Also includes the contribution rate for other programs.

c. Government pays the total cost of family allowance benefits.

d. Contributions are submitted to a ceiling for some benefits.

e. Employer pays the total cost of work injury benefits.

f. Portion of set amount for Old Age, Disability, and Survivors. Central and local government and other types of contributions for

the other programs.

g. Government pays the total cost of basic unemployment benefit.

h. Contribution is for social insurance benefits only.

i. Plus variable contributions by some employees and employers for sickness and maternity benefits.

j. See total.

k. Plus a flat-rate contribution by the employer for sickness benefit.

l. Data from 2002.

m. Employer pays total cost of mandatory unemployment insurance.

Insured

person Employer Total

Insured

person Employer Total

Old age, disability, survivors 

Country

All social security programs a

Country 

Summaries

SSPTW: Europe, 2004 ♦ 27

Albania

Albania

Exchange rate: US$1.00 equals 105.6 leks.

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1947.

Current law: 1993, with amendments.

Type of program: Social insurance system.

Coverage

Employed persons, self-employed persons, and university

students.

Voluntary coverage for those who do not qualify for

compulsory insurance.

Supplementary systems for civil servants, private employers

and employees, and military personnel.

Special state pensions are available for those who have

contributed to the political and cultural development of

Albania.

Source of Funds

Insured person: 9.5% of total earnings (8% for old-age,

disability, and survivor pensions and for sickness and

maternity benefits; 1.5% for medical benefits).

Employer: 29.9% of payroll.

Government: Any deficit. Covers costs for persons in

compulsory military service and credits contributions on behalf

of the unemployed.

Qualifying Conditions

Old-age pension: Age 65 (men) or age 60 (women) with

35 years of contributions. Retirement from economic activity is

necessary.

Age 50 with 30 years of contributions for mothers with six or

more children over age 8.

Partial pension: Age 65 (men) or age 60 (women) with

between 20 and 35 years of contributions.

Deferred pension: A deferred pension is possible.

Disability pension: Incapable of any work, blind, or suffering

from severe mutilation.

The minimum insurance period is at least one-half the

difference in years between the claimant’s age and age 20.

The degree of disability is assessed by the Medical Experts

Committee (MEC). At pensionable age, the claimant may

choose to take the old-age pension if the amount is higher.

Partial disability pension: Incapacity to perform work at the

last place of employment but capable of work under special

working conditions as determined by the MEC. The minimum

insurance period must be met.

Survivor pension: The deceased was an old-age or disability

pensioner or was insured at the time of death or insurance

coverage ceased not more than 1 year before death.

Eligible survivors include a surviving spouse caring for a

dependent child under age 8; a disabled or aged spouse

(age 50 for a widow or age 60 for a widower); dependent

orphans under age 18 (age 25 if a student), or a spouse or a

child who became disabled before reaching these ages; parents

and grandparents aged 65 or older who shared the same

household with the deceased for 12 months before the

insured’s death and have no one else to care for them; and

dependent grandchildren. A surviving spouse loses

entitlement to the survivor pension on remarriage.

Old-Age Benefits

Old-age pension: A basic flat-rate pension (equal to the

minimum standard of living) is payable to all insured persons,

plus an earnings-related pension for employed persons equal

to 1% for each year of coverage multiplied by the average

assessed wage for which contributions were paid.

The maximum pension is twice the basic pension amount or

75% of average net wages during 3 of the last 10 years of

employment.

Deferred pension: An increment of 4% of the full pension is

paid for each year of deferral with continued contributions.

The maximum deferred pension is 80% of the average net wage

during 3 of the last 10 years of employment.

Partial pension: A percentage of the full pension,

corresponding to the number of years worked.

Benefit adjustment: The basic flat-rate pension is indexed

annually according to price changes of selected commodities.

Permanent Disability Benefits

Disability pension: A basic flat-rate pension (equal to the

minimum standard of living) is payable to all insured persons,

plus an earnings-related pension for employed persons equal

to 1% for each year of coverage multiplied by the average

assessed wage for which contributions were paid.

The maximum pension is twice the basic flat-rate pension or

80% of the last average net wage, whichever is less.

Partial disability pension: 50% of the insured’s full disability

pension (the basic flat-rate pension plus the insured’s

earnings-related pension).

Constant-attendance supplement: 15% of the assessed wage

for contribution purposes.

Supplements for dependent children: A supplement equal to

5% of the basic old-age pension is paid for each dependent

child under age 15. The maximum supplement is 20% of the

basic old-age pension.
28 ♦ SSPTW: Europe, 2004

Albania

Benefit adjustment: Benefits are adjusted according to

changes to the old-age pension.

Survivor Benefits

Survivor pension: 50% of the insured’s old-age pension for

the surviving spouse; 25% for each orphan and each other

dependent.

The maximum pension is 100% of the insured’s old-age

pension; 50% if the surviving spouse is economically active or

receiving a pension in his or her own right.

Full orphan’s pension: 50% of the insured’s old-age pension

for a sole orphan provided there is no other eligible dependent.

Full orphans are eligible for the pension entitlements of both

parents.

Death benefit: A lump sum equal to 1 month’s basic flat-rate

old-age pension.

Administrative Organization

Ministry of Labor and Social Affairs and a tripartite

Administrative Council provide general supervision.

Social Insurance Institute administers the program.

Sickness and Maternity

Regulatory Framework

First law: 1947.

Current law: 1993, with 1994, 1995, 1998, 2000, 2001, 2002, and

2003 amendments.

Type of program: Social insurance (cash benefits) and

universal system (medical care).

Coverage

Sickness benefits: Employees.

Maternity benefits: Employees, employers, and selfemployed persons.

Medical care: All residents.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above. (Persons living in urban

areas contribute 1.7% of earnings for medical benefits.)

Employer: 0.8% of payroll (sickness benefits), 2.3% of payroll

(maternity benefits), and 1.5% for medical cash benefits.

Government: 1.7% of payroll for employees (medical

benefits). Total cost for persons not currently in the labor

force (medical benefits).

Qualifying Conditions

Sickness benefits: Currently insured.

Maternity benefits: Twelve months of contributions.

Medical benefits: There is no minimum qualifying period.

Sickness and Maternity Benefits

Sickness benefit: 70% of the average daily wage in the last

calendar year if the insured has less than 10 years of

contributions; 80% for more than 10 years. The benefit is

payable from the 15th day of medical certification (the first

14 days are paid by the employer) for up to 6 months. The

benefit may be extended for an additional 3 months if the

Medical Experts Committee (MEC) certifies the likelihood of

recovery in that period. The benefit is equal to 50% of the

average daily wage during periods of hospitalization, provided

there are no dependents. Income compensation is also

available for changes of employment due to health reasons.

Maternity benefit: Employees are entitled to 365 days of paid

maternity leave (with a minimum of 35 days before the expected

date of childbirth and 42 days after). The benefit is 80% of the

average daily wage in the last calendar year for the leave

period taken before childbirth and for 150 days after; the

benefit is paid at 50% of the average daily wage for the

remainder of the entitlement period. For multiple births, the

paid leave period is extended to 390 days, including a minimum

of 60 days before and 42 days after the expected date of

childbirth. Benefits are also payable in cases of adoption.

Compensation is payable for changes of employment due to

pregnancy.

For employers and the self-employed, the benefit is equal to

the basic old-age pension.

Birth grant: A lump-sum payment of one-half of the minimum

wage set by the Council of Ministers, payable to either insured

parent with a minimum of 1 year’s contributions.

Workers’ Medical Benefits

Free general practitioners’ services.

Cost sharing: Reimbursement is provided from 35% to 100%

for various essential medicines.

Dependents’ Medical Benefits

Same as for the family head.

Administrative Organization

Ministry of Labor and Social Affairs and Ministry of Health

Protection provide general supervision.

Social Insurance Institute administers sickness and maternity

benefits.

Health Insurance Institute administers medical benefits.
SSPTW: Europe, 2004 ♦ 29

Albania

Work Injury

Regulatory Framework

First law: 1947.

Current laws: 1993, 1995, 1998, 2000, 2001, 2002, and 2003.

Type of program: Social insurance system.

Coverage

Employees, apprentices, and students in practical training.

Source of Funds

Insured person: None.

Employer: 0.5% of payroll.

Government: None.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Occupational diseases are defined by the Ministry of Health.

Temporary Disability Benefits

100% of the average daily wage during the last 3 years is

payable for up to 12 months.

Permanent Disability Benefits

For an assessed loss of working capacity of at least 67%, the

benefit is 80% of the average wage during the last 3 years but

not less than the minimum standard of living.

Partial permanent disability: For an assessed loss of at least

33% of working capacity, the benefit is equal to between 50%

and 80% of the average wage during the last 3 years,

depending on the degree of loss of working capacity.

Minor permanent disability: For an assessed loss of between

10% and 33% of working capacity, the benefit is a lump sum set

by regulations. Material damages incurred by the insured

person are compensated in full.

Workers’ Medical Benefits

Compensation is available for additional medical care and for

the cost of rehabilitation.

Survivor Benefits

Survivor pension: 50% of the insured’s pension for the

surviving spouse.

Orphan’s pension: 25% is payable for each orphan, even if

the surviving parent is economically active or receiving a

pension.

The maximum orphan’s pension is 50% of the insured’s

pension.

Other eligible survivors: 25% for each parent, grandchild,

and grandparent.

The maximum total pension is 100% of the insured’s pension.

Death benefit: A lump sum equal to 1 month’s basic old-age

pension.

Administrative Organization

Ministry of Labor and Social Affairs provides general

supervision.

Social Insurance Institute administers the program.

Unemployment

Regulatory Framework

First and current law: 1993.

Type of program: Social insurance system.

Coverage

Employees.

Source of Funds

Insured person: None.

Employer: 6% of payroll.

Government: Covers any deficit.

Qualifying Conditions

Unemployment benefit: At least 1 year’s contributions and

receiving no other benefits (except for partial disability),

registered at an unemployment office, and willing to undergo

training.

Unemployment Benefits

A flat-rate benefit providing at least for a minimum standard of

living, as decided by the Council of Ministers (3,960 leks a

month in 2003). The benefit is payable for up to 12 months or

for a total of 365 calendar days if the insured has temporary

periods of employment.

Child supplement: 5% of the unemployment benefit for each

dependent child under age 15, up to a maximum of 20% (the

supplement is reduced by 50% if one parent is employed or

receiving a pension).

For persons attending training courses but not receiving a

grant or wages, benefits are payable up to 18 months.

Benefit adjustment: Benefits are indexed annually according to

price changes of selected commodities.

Administrative Organization

Ministry of Labor, Emigration, and Social Affairs provides

general supervision.
30 ♦ SSPTW: Europe, 2004

Albania

National Employment Service administers the payment of

benefits.

Social Insurance Institute administers the collection of

contributions.

Family Allowances

Regulatory Framework

First and current law: 1993 (financial aid and social services).

Type of program: Social assistance system.

Note: Social insurance benefits for dependent children are

provided through the Social Insurance Act, under Old Age,

Disability, and Survivors and Unemployment.

Coverage

Resident families.

Source of Funds

Insured person: None.

Employer: None.

Government: Total cost.

Qualifying Conditions

Family allowances (social assistance): Families resident in

Albania.

Family Allowance Benefits

Family allowances (social assistance): Financial aid is

provided to families with low or inadequate income or to

families with a member who is disabled or blind.

Administrative Organization

Ministry of Labor and Social Affairs provides general

supervision.

General Administration of Social Assistance and Services

administers the program at district level.
SSPTW: Europe, 2004 ♦ 31

Andorra

Andorra

Exchange rate: US$1.00 equals 0.80 euros (€).

Old Age, Disability, and Survivors

Regulatory Framework

First and current law: 1966.

Type of program: Social insurance system.

Coverage

Employed persons.

Voluntary coverage for nonemployed persons.

Source of Funds

Insured person: A choice of 2%, 4%, or 6% of earnings.

Self-employed person: A choice of a flat-rate contribution of

€90.64, €113.30, €135.96, €181.28, or €271.92 according to the

chosen income band.

Employer: 6% of payroll.

Government: None.

All of the above contributions also finance work injury

benefits.

There are no maximum earnings for contribution purposes.

Qualifying Conditions

Old-age pension: Age 65.

Disability pension: A loss of at least 2/3 of earning capacity.

For an insured person under age 21, entitlement is based on

12 months of contributions; for an insured between ages 21

and 40, 36 months of contributions; for an insured between

ages 41 and 65, 96 months of contributions.

Survivor pension: The insured must have made 60 months of

contributions. The pension is payable to a spouse aged 45 or

older, disabled, or caring for a child aged under age 18.

Orphan’s pension: Payable to each dependent child who is

not in paid employment.

Funeral grant: Payable to eligible survivors. Eligible

survivors (in order of entitlement) are the surviving spouse

and dependent children, adult children, parents, grandparents,

or any other immediate relative. In some cases, the funeral

grant may be paid to the insurance fund that met the funeral

costs.

Old-Age Benefits

Old-age pension: The value of the pension is linked to the

amount of contributions made. Each monthly contribution is

converted into age pension points by dividing the monthly

employee and employer contributions by the government-set

purchase value of an age pension point for the relevant month.

To calculate the pension, the acquired age pension points are

converted into an annual pension figure by applying a set

value to each pension point. The monthly pension is

equivalent to 1/12 of the result of this calculation.

The pension point’s set value is regularly adjusted according

to the retail price index.

The minimum pension is based on 5,000 age pension points.

The pension is paid to insured persons with at least 960 points,

including 180 months of contributions since 1968 and at least

60 months of paid employment before then.

Spouse supplement: Pensions are increased by 10% if the

insured’s spouse is aged 65 or older and is not eligible for a

pension in his or her own right.

Permanent Disability Benefits

Disability pension: The pension is calculated according to

the basis salary (the mean monthly salary of the 12 months

preceding the onset of disability) and the assessed degree of

disability:

• Group I—an individual who is able to perform some type

of work receives 30% of the basis salary;

• Group II—an individual who is unable to perform any

type of work receives 50% of the basis salary;

• Group III—an individual who is unable to perform any

type of work and who is in need of constant attendance

receives 75% of the basis salary.

Survivor Benefits

Survivor pension: 50% of the insured’s old-age pension; if

death occurs before retirement, the equivalent of the old-age

pension calculated on the basis of half the total pension points

acquired by the deceased.

Orphan’s pension: 10% of the insured’s old-age pension is

payable to each eligible child; if death occurs before retirement,

the equivalent of the old-age pension calculated on the basis

of 10% of the total pension points acquired by the deceased.

The maximum orphan pension is 50% of the insured’s actual or

prospective pension.

Funeral grant: A lump sum equal to the last 3 months’

earnings or three times average monthly earnings, whichever is

higher.

Administrative Organization

Managed by its Administration Council and Director, the

National Social Security Fund administers the scheme.
32 ♦ SSPTW: Europe, 2004

Andorra

Sickness and Maternity

Regulatory Framework

First and current law: 1966.

Type of program: Social insurance system.

Coverage

Employed persons.

Voluntary coverage for nonemployed persons.

Source of Funds

Insured person: 3% of earnings.

Self-employed person: A flat-rate contribution of €123.86

regardless of income level.

Employer: 7% of payroll.

Government: None.

All of the above contributions also finance work injury

benefits.

There are no maximum earnings for contribution purposes.

Qualifying Conditions

Sickness benefits: For the first claim, 40 days of

contributions are required; all subsequent claims require

15 days of employment in the last 40 days. To receive benefits

for longer than 180 days, the insured must have 12 months of

contributions before the onset of sickness.

Maternity benefits: Entitlement is based on 6 months of

insurance before the expected date of childbirth or 3 months of

employment in the previous 6 months. Benefits are also paid

for the adoption of a child.

Medical benefits: For the first claim, 40 days of contributions

are required; all subsequent claims require 15 days of

employment in the last 40 days.

Sickness and Maternity Benefits

Sickness benefit: A daily amount equal to half of the

reference earnings (1/180 of earnings for the previous

6 months). The benefit is payable after a 3-day waiting period.

After the thirtieth day following the onset of sickness, the

daily payment is increased to 2/3 of the reference earnings.

The maximum duration of payments is 6 months; in some

cases, benefit entitlement can be extended by additional 6-

month periods up to a total of 3 years.

Benefit adjustment: Benefits are adjusted annually according

to changes in the retail price index.

Maternity (or adoption) benefit: A daily amount equal to 90%

of 1/180 of earnings in the 6 months before stopping work.

The maximum duration of payment is 16 weeks, plus

2 additional weeks for each child in case of multiple births. An

uninterrupted period of 12 weeks is paid for the adoption of a

child.

Workers’ Medical Benefits

The benefits include primary and specialist treatment,

pharmaceuticals, hospitalization, dental care, minor aids and

appliances, maternity care, and transportation.

Cost sharing: The National Social Security Fund reimburses

100% of scheduled fees for maternity care, 90% for

hospitalization, and 75% for the other services and benefits

provided.

There is no limit to duration.

Dependents’ Medical Benefits

The benefits include primary and specialist treatment,

pharmaceuticals, hospitalization, dental care, minor aids and

appliances, maternity care, and transportation.

Cost sharing: The National Social Security Fund reimburses

100% of scheduled fees for maternity care, 90% for

hospitalization, and 75% for the other services and benefits

provided.

There is no limit to duration.

Administrative Organization

Managed by its Administration Council and Director, the

National Social Security Fund administers the scheme.

Work Injury

Regulatory Framework

First and current law: 1966.

Type of program: Social insurance system for work accidents

only (professional diseases are not covered).

Coverage

Employees.

Voluntary coverage for nonemployed persons.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors and Sickness and Maternity, above.

Self-employed person: See source of funds under Old Age,

Disability, and Survivors and Sickness and Maternity, above.

Employer: See source of funds under Old Age, Disability, and

Survivors and Sickness and Maternity, above.

Government: See source of funds under Old Age, Disability,

and Survivors and Sickness and Maternity, above.
SSPTW: Europe, 2004 ♦ 33

Andorra

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

A daily amount equal to half of the reference earnings (1/180 of

earnings in the previous 6 months). After the thirtieth day, the

daily payment is increased to 2/3 of the reference earnings.

The benefit is payable from the onset of disability.

Permanent Disability Benefits

For total disability, 100% of average monthly earnings in the

preceding year.

Partial disability: For an assessed degree of disability of less

than 10%, the benefit is a lump sum equal to twice the average

monthly earnings.

If the assessed degree of disability is between 10% and 55%

and the insured is younger than age 45, there is a choice of a

pension in proportion to 50% of the assessed degree of

disability or a lump-sum payment. The lump sum is equal to

6 months of average monthly earnings if the assessed degree

of disability is between 10% and 24%, 12 months if the

disability is between 25% and 39%, or 18 months if the

disability is between 40% and 55%.

If the assessed degree of disability is between 10% and 55%

and the insured is older than age 45, the pension is in

proportion to 50% of the assessed degree of disability.

If the assessed degree of disability is greater than 55% and the

insured is younger than age 45, there is a choice of a pension

in proportion to the assessed degree of disability or a lump

sum equal to 40 times the average monthly earnings.

If the disability is greater than 55% and the insured is older

than age 45, the pension is in proportion to the assessed

degree of disability.

Workers’ Medical Benefits

Total reimbursement of scheduled fees. The benefits include

primary and specialist treatment, pharmaceuticals,

hospitalization, appliances, and transportation.

There is no limit to duration.

Survivor Benefits

Survivor pension: 50% of the insured’s average monthly

earnings. The pension is payable to a nondivorced spouse

who is not undertaking any gainful activity and who is not

eligible for a pension in his or her own right.

Orphan’s pension: 10% of the insured’s average monthly

earnings for each child under age 18 who is not in paid

employment.

The maximum orphan’s pension is 50% of the insured’s

earnings.

Ascendant pension: 20% of the insured’s average monthly

earnings is paid to all ascendants (of the deceased and the

spouse) who were totally dependent on the insured.

The maximum total survivor pension is 100% of the insured’s

average monthly earnings.

Administrative Organization

Managed by its Administration Council and Director, the

National Social Security Fund administers the scheme.

Unemployment

Regulatory Framework

There is no separate unemployment program, but assistance is

made available by the government for identified cases of need.

Family Allowances

Regulatory Framework

There is no separate family allowances program, but assistance

is made available by the government for identified cases of

need.
34 ♦ SSPTW: Europe, 2004

Austria

Austria

Exchange rate: US$1.00 equals 0.80 euros (€).

Old Age, Disability, and Survivors

Regulatory Framework

First laws: 1909 (salaried employees) and 1939 (wage earners).

Current laws: 1955 (employees) and 1979 (self-employed).

Type of program: Social insurance system.

Coverage

Wage earners and salaried employees (separate systems with

essentially identical provisions) earning €316.54 or more a

month, and apprentices.

Special systems for miners, notaries, public-sector employees,

and self-employed persons in trade and agriculture.

Source of Funds

Insured person: 10.25% of earnings.

Employer: 12.55% of payroll.

Government: Any deficits and the cost of care benefit and

income-tested allowance.

The maximum earnings for contribution and benefit purposes

are €3,450 a month. (The maximum earnings for contribution

and benefit purposes are adjusted annually.)

Qualifying Conditions

Old-age pension: Age 65 (men) or age 60 (women), with

180 months of insurance coverage in the last 30 years,

300 months of insurance, or 180 months of contributions.

Early pension: Age 61.5 (men) or 56.5 (women) with 45 years of

insurance (men) or 40 years of insurance (women) and with

monthly earnings of €316.19 and below and under certain other

conditions. The age requirement will be increased by 1 month

per quarter beginning July 1, 2004. (The early pension will be

phased out gradually by October 1, 2017.)

Deferred pension: A deferred pension is possible.

Reciprocity or international agreement is required for payments

abroad beyond 2 months, except in member states of the

European Union.

Disability pension: The loss of 50% of earning capacity

compared with an insured person with a similar level of

education. Must have 60 months of contributions (plus

1 month for each month from age 50) in the last 10 years (plus

2 months for each month from age 50), 300 months of

insurance, or 180 months of contributions. The qualifying

conditions are relaxed for persons aged 57 or older.

Partial pension: A partial pension is paid if monthly earnings

are above €921.11.

Survivor pension: The insured met the insurance or

contribution requirements for a disability pension or was a

pensioner at the time of death.

Old-Age Benefits

Old-age pension: The benefit accrues at 1.96% of the

assessment base for each year of insurance.

The assessment base is equal to revalued average earnings in

the best 16 years, up to an annual maximum of €3,013.22. (The

assessment period will be increased gradually by 12 months

per year until it reaches 40 years in 2028.)

Early pension: The benefit is reduced by 4.2% for each year it

is awarded before age 65 (men) or age 60 (women), up to a

maximum of 15%.

Deferred pension: The pension is increased by 4.2% for each

year of deferral.

The maximum pension is 80% of the assessment base (up to

91.76% for a deferred pension).

Child’s supplement: €29.07 for each child under age 18 (age 27

if student, no limit if disabled).

Income-tested allowance: An amount to raise the pension to

€653.19 a month for an individual; €1,015 for a married couple,

plus €69.52 for each child for which a person receives a child’s

supplement.

Schedule of payments: Fourteen payments a year.

Benefit adjustment: Benefits are adjusted annually (newly

granted pensions are first adjusted in the second calendar year

after the year of receipt of the pension).

Care benefit: Pensioners in need of personal care may be

entitled to a monthly benefit varying from €145.40 up to

€1,531.50 (in 7 levels) depending on the amount of care

required. The benefit is paid 12 times a year.

Permanent Disability Benefits

Disability pension: The benefit accrues at 1.96% of the

assessment base for each year of insurance. If the insured is

younger than age 60, insurance coverage is projected to age 60

for benefit calculation purposes.

The assessment base is equal to revalued average earnings in

the best 16 years, up to an annual maximum of €3,013.22. (The

assessment period will be increased gradually by 12 months

per year until it reaches 40 years in 2028.)

The maximum pension is 60% of the assessment base.

Child’s supplement: €29.07 for each child under age 18 (age 27

if student, no limit if disabled).

Income-tested allowance: An amount to raise the pension to

€653.19 a month for an individual; €1,015 for a married couple,

plus €69.52 for each child for which a person receives a child’s

supplement.
SSPTW: Europe, 2004 ♦ 35

Austria

Schedule of payments: Fourteen payments a year.

Benefit adjustment: Benefits are adjusted annually (newly

granted pensions are first adjusted in the second calendar year

after the year of receipt of the pension).

Care benefit: Pensioners in need of personal care may be

entitled to a monthly benefit varying from €145.40 up to

€1,531.50 (in 7 levels) depending on the amount of care

required. The benefit is paid 12 times a year.

Survivor Benefits

Survivor pension: A widow(er) receives up to 60% of the

insured’s pension. (Rates under 60% may be increased to 60%,

depending on the beneficiary’s total income.)

Income-tested allowance: An allowance to raise the survivor

pension to €653.19 a month.

Orphan’s pension: 40% of the survivor pension (60% if a full

orphan) for each orphan under age 18 (age 27 if student, no

limit if disabled).

Income-tested allowance: An allowance to raise the orphan’s

pension to €243.95 a month (€366.28 for a full orphan); after

age 24, the allowance raises the orphan’s pension to €433.48 a

month (€653.19 for a full orphan).

Schedule of payments: Fourteen payments a year.

Benefit adjustment: Benefits are adjusted annually (survivor

pensions of insured persons whose old-age pension was first

granted in 2004 or after are first adjusted during the second

calendar year after the year of receipt of the survivor pension).

Care benefit: Pensioners in need of personal care may be

entitled to a monthly benefit varying from €145.40 up to

€1,531.50 (in 7 levels) depending on the amount of care

required. The benefit is paid 12 times a year.

Administrative Organization

Federal Ministry of Social Security, Generations, and Consumer

Protection provides general supervision.

Pension insurance institutions administer pensions (separate

institutions for railroads, mining, and the self-employed).

Self-governing institutions are managed by elected

representatives of insured persons and employers.

Sickness funds collect contributions, transmit them to pension

insurance institutions, and maintain contribution records for

individual workers.

Special funds equalize surpluses and deficits between various

systems.

Sickness and Maternity

Regulatory Framework

First law: 1888.

Current laws: 1955 (employees), 1960 (maternity), 1974 (cash

benefits for wage earners), and 1979 (self-employed).

Type of program: Social insurance system. Cash and medical

benefits.

Coverage

Employed persons earning €316.19 or more a month,

apprentices, and pensioners.

Special systems for public-sector and railway employees and

the self-employed in agriculture and trade.

Source of Funds

Insured person: 3.9% of wages (wage earners), 3.7% of salary

(salaried employees), or 4.35% of pension (pensioners).

Employer: 3.5% of payroll (wage earners) or 3.7% of payroll

(salaried employees).

Government: 70% of cash maternity benefits.

The maximum monthly earnings for contribution and benefit

calculation purposes are €3,450. (The maximum earnings for

contribution purposes are adjusted annually.)

Qualifying Conditions

Sickness and maternity benefits: Currently in covered

employment.

Sickness and Maternity Benefits

Sickness benefit: The employer pays 100% of earnings for

up to 12 weeks (plus an additional 4 weeks at 50%), depending

on length of service.

After the right to full benefit from the employer is exhausted,

sickness funds pay 50% (60% after 6 weeks) of covered

earnings (25% to those receiving 50% of earnings from the

employer), plus eventual family supplements (depending on

the regulation of the sickness fund) for 26 to 52 weeks,

depending on the length of the contribution period.

The maximum benefit is 75% of covered earnings.

Maternity benefit: 100% of earnings for 8 weeks before and

8 weeks after the expected date of childbirth (12 to 16 weeks

after childbirth in special cases).

Workers’ Medical Benefits

Service benefits are ordinarily provided by doctors, hospitals,

and pharmacists under contract with and paid directly by

sickness funds; some funds operate their own clinics or

hospitals. Benefits include medical (including psychotherapy),

maternity, and dental care; hospitalization; medicines;

appliances; home care; preventive examinations; and

transportation.

Cost sharing: Patients pay €4.35 per prescription, part of the

cost for dental care, and up to 20% of the cost of appliances.

Cost sharing is at least €23 for appliances. Exceptions are

made for patients with limited means.

There is no limit to duration.
36 ♦ SSPTW: Europe, 2004

Austria

Dependents’ Medical Benefits

Same as for the insured but with 10% cost sharing during the

first 4 weeks of hospitalization. The wife of an insured man

receives the same maternity care as an insured woman.

Administrative Organization

Federal Ministry of Social Security, Generations, and Consumer

Protection performs general supervision.

Nine district and eight occupational sickness funds administer

contributions and benefits.

Special funds for railroad, mining, and public-sector employees

and the self-employed.

Self-governing institutions are managed by elected

representatives of insured persons and employers.

Work Injury

Regulatory Framework

First law: 1887.

Current law: 1955.

Type of program: Social insurance system.

Coverage

Employed and self-employed persons, apprentices, and

students.

Special system for public-sector employees.

Source of Funds

Insured person: None.

Self-employed person: A flat-rate contribution of €83.16.

Employer: 1.4% of payroll.

Government: Federal government contributes to accident

insurance for farmers.

The maximum monthly assessment base per employee for

contribution and benefit calculation purposes is €3,450. (The

maximum earnings for contribution purposes are adjusted

annually.)

Family Allowances Equalization Fund reimburses the General

Accident Insurance Fund for accident insurance of students.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

The insured receives sickness benefit until a decision on

permanent disability is made. For sickness benefit, the

employer pays 100% of earnings for up to 12 weeks (plus

additional 4 weeks at 50%), depending on length of service.

After the right to full benefit from the employer is exhausted,

sickness funds pay 50% (60% after 6 weeks) of covered

earnings (25% to those receiving 50% of earnings from

employer).

The maximum benefit is 75% of covered earnings.

Permanent Disability Benefits

Permanent disability pension: The full pension (66.6% of the

assessment base) is paid for a 100% reduction in earning

capacity.

Partial pension: A proportionately reduced pension is payable

with at least a 20% reduction in earning capacity.

The assessment base is equal to average covered earnings

during the last year before the onset of disability.

Supplementary pension: 20% of the disability pension for a

reduction in earning capacity of 50% to 70%; 50% if the

reduction is higher.

Child’s supplement: 10% of the disability pension for a 50% or

higher reduction in earning capacity for each child under

age 18 (age 27 if a student, no limit if disabled).

The maximum supplement is €76.31 a child.

The combined total disability pension, supplementary pension,

and children’s supplements cannot exceed 100% of the

assessment base.

Schedule of payments: Fourteen payments a year.

Benefit adjustment: Benefits are adjusted annually.

Care benefit: Those in need of personal care may be entitled

to a monthly benefit varying from €145.40 up to €1,531.50 (in 7

levels) depending on the amount of care required. The benefit

is paid 12 times per year.

Workers’ Medical Benefits

Comprehensive care, including rehabilitation (the first 4 weeks

are provided under sickness insurance), and allowances for

training and relocation.

Survivor Benefits

Survivor pension: 40% of the assessment base is paid to a

widow aged 60 or older (widower aged 65 or older) or disabled.

Other widow(er)s receive 20% of the assessment base.

Orphan’s pension: 20% of the assessment base for each

orphan (30% for a full orphan) under age 18 (age 27 if a

student, no limit if disabled).

The assessment base is equal to average earnings during the

last year before death.

The combined total survivor and orphan’s pension cannot

exceed 80% of the assessment base.

Schedule of payments: Fourteen payments a year.

Benefit adjustment: Benefits are adjusted annually.
SSPTW: Europe, 2004 ♦ 37

Austria

Other survivor benefits: Partial reimbursement of funeral and

transportation costs (at least €979.79).

Administrative Organization

Federal Ministry of Social Security, Generations, and Consumer

Protection performs general supervision.

General Accident Insurance Institution administers long-term

benefits (separate institution for railway employees, publicsector employees, and the agricultural self-employed).

Sickness funds collect contributions and transmit them to

accident insurance institutions.

Unemployment

Regulatory Framework

First law: 1920.

Current law: 1977.

Type of program: Social insurance system.

Coverage

Employed persons earning €316.19 or more a month and

apprentices.

Exclusions: Public-sector employees and the self-employed.

Source of Funds

Insured person: 3% of earnings.

Employer: 3% of payroll.

Government: Any deficit.

The maximum monthly earnings for contribution and benefit

purposes are €3,450. (The maximum earnings for contribution

and benefit purposes are adjusted annually.)

Qualifying Conditions

Unemployment benefit: Twenty-eight weeks of contributions

in the last 12 months; 52 weeks in the last 24 months for a first

claim to benefit. (The reference period is extended for specified

periods, including sickness, unemployment, and noninsured

employment.) The insured must be registered at an

employment office and be capable of and willing to work.

Unemployment is not due to voluntary departure without good

reason, misconduct, work stoppage, or the refusal of a suitable

offer, in which case disqualification usually lasts 4 weeks.

Unemployment Benefits

55% of net earnings is payable for up to 20 weeks. The

payment of benefit can be extended to 30 weeks (with

156 weeks of insurance in the last 5 years); to 39 weeks

(aged 40 or older with 312 weeks of insurance in the last

10 years); to 52 weeks (aged 50 or older with 468 weeks of

insurance in the last 15 years); or to 78 weeks (certain groups

of older workers with 780 weeks of insurance in the last

25 years).

The minimum benefit is €4.08 a day.

The maximum benefit is €37.52 a day.

Dependents’ supplement: 1/30 of €29.07 a day for each

dependent, but the total benefit including the base amount

cannot be more than 80% of net earnings.

Emergency assistance: According to the number of

dependents, 92% to 95% of unemployment benefit is payable

to unemployed citizens without time limit when the insurance

benefits are exhausted.

Administrative Organization

Federal Ministry of Social Security, Generations, and Consumer

Protection performs general supervision.

Regional offices of the labor market service administer benefits

and offer job-seeking services.

Family Allowances

Regulatory Framework

First law: 1948.

Current law: 1967.

Type of program: Universal system.

Coverage

Permanent residents with one or more children. (Noncitizens

are eligible if employed for more than 3 months or resident for

at least 5 consecutive years.)

Source of Funds

Insured person: None. (A portion of the land tax is allocated

to finance family allowances for the agricultural self-employed.)

Employer: 4.5% of payroll.

Government: States contribute €1.74 a year for each

inhabitant. A portion of federal tax receipts is transferred to the

Family Allowances Equalization Fund.

Note: Federal government, states, and municipalities with more

than 2,000 inhabitants pay family allowances out of their own

budget but do not pay employer contributions.

Qualifying Conditions

Family allowances: Child must be under age 18; under age 26

if a student, in vocational training, or severely disabled.
38 ♦ SSPTW: Europe, 2004

Austria

Family Allowance Benefits

Family allowances: €105.40 a month for the first child under

age 3, €112.70 for the first child between ages 3 and 9, €130.90

for the first child between ages 10 and 18, and €152.70 for the

first child from age 19.

Each of these amounts is increased by €12.80 for the second

child and by €25.50 for the third and each subsequent child.

Severely disabled child supplement: A supplement of €138.30

for a severely disabled child.

Administrative Organization

Federal Ministry of Social Security, Generations, and Consumer

Protection administers the program through the Family

Allowances Equalization Fund attached to the Ministry.

Tax administration pays allowances directly to recipients;

surpluses are accumulated in a reserve fund.

Separate organization for public-sector employees (federal

government, states, and municipalities with more than

2,000 inhabitants pay family allowances out of their own

budget).
SSPTW: Europe, 2004 ♦ 39

Belarus

Belarus

Exchange rate: US$1.00 equals

2,145 Belarus rubles.

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1956.

Current laws: 1993 and 1999.

Type of program: Social insurance system.

Coverage

All employed permanent residents, including priests and

employees of religious organizations, members of

cooperatives, and farmers.

Special systems: Aviators, teachers, artists, professional

athletes, government employees, and specific categories of

medical personnel.

Source of Funds

Insured person: 1% of earnings.

Employer: 10% to 35% of payroll, according to the branch of

industry and the type of enterprise.

Government: The cost of social pensions, plus subsidies as

needed.

All of the above contributions also finance cash sickness and

maternity benefits, work injury cash benefits, and family

allowances to employees.

Qualifying Conditions

Old-age pension: Age 60 with 25 years of insurance coverage

(men) or age 55 with 20 years of insurance coverage (women).

Qualifying conditions are reduced for those in hazardous work,

war veterans, parents of disabled children, persons disabled

since childhood, mothers of five or more children, and mothers

of military servicemen killed in action.

Disability pension: Incapacity for any work (total disability)

or usual work (partial disability); a minimum of 1 year to

15 years of covered employment, depending on age at the

onset of disability.

Survivor pension: The deceased was a pensioner or was

entitled to a pension.

Social pension: Nonworking citizens who are not eligible for

an old-age, disability, or survivor pension and are age 60 (men)

or 55 (women), or disabled since childhood, under age 18 and

disabled, or orphans under age 18 (older if disabled and the

disability began before age 18).

Old-Age Benefits

Old-age pension: The pension is 55% of the wage base, plus

1% of the wage base (not less than 1% of the minimum old-age

pension) for each covered year in excess of the required

number of years of coverage (25 years for men or 20 years for

women), plus 1% of the wage base for each year in excess of 10

years in hazardous work (or 7.5 years for women), up to 20%.

The pension is paid monthly.

The minimum pension is 25% of the national average per capita

subsistence income level.

The maximum pension is 75% of the wage base.

The wage base is determined by the Council of Ministers of

the Republic of Belarus.

Partial pension: The monthly benefit is reduced in proportion

to the number of years below the required number of years of

coverage (the minimum coverage period for a pension is

5 years).

The minimum partial pension is 50% of the minimum pension.

Constant-attendance supplement: 50% of the minimum old-age

pension for pensioners requiring care and aged 80 or older;

regardless of age for single pensioners.

Benefit adjustment: Benefits are adjusted when the average

wage increases by more than 15% a quarter.

Social pension: 50% of the minimum pension a month.

Benefit adjustment: The social pension is adjusted according

to changes in the national average per capita subsistence

income level.

Permanent Disability Benefits

Disability pension: A group I disability pension (total

disability requiring constant attendance) is 75% of the wage

base. A group II disability pension (total disability) is 65% of

the wage base. A group III disability pension (partial

disability) is 40% of the wage base.

The minimum disability pension is 100% of the minimum oldage pension for groups I and II and 50% of the minimum oldage pension for group III.

Expert medical rehabilitation commissions set the definitions

for the respective groups of disability.

Constant-attendance supplement: 50% of the minimum old-age

pension for pensioners with a group II disability requiring care;

100% for pensioners with a group I disability.

Benefit adjustment: Benefits are adjusted when the average

wage increases by more than 10%.

Social pension for the disabled: For disabled persons with a

group I disability or a group I or II disability that began in

childhood, the award is 150% of the minimum monthly old-age

pension; for group II and if the disability began after age 18,

100%; 50% for persons with a group III disability. For disabled

children under age 18, the award is 150% of the minimum oldage pension for those in group I, 175% for group II, and 200%
40 ♦ SSPTW: Europe, 2004

Belarus

for group III. In certain cases, disabled children under age 18

may receive 250% of the minimum old-age pension.

Expert medical rehabilitation commissions set the definitions

for the respective groups of disability.

Benefit adjustment: The social pension for the disabled is

adjusted according to changes in the national average per

capita subsistence income level.

Survivor Benefits

Survivor pension: A monthly pension of 40% of the wage

base for each eligible survivor; 50% for full orphans.

Eligible survivors: Surviving dependent spouse; the insured’s

parents if they are of pensionable age, disabled, or care for a

child under age 8 and do not work; grandparents if there is no

one legally responsible for their livelihood; children, siblings,

and grandchildren under age 18 (age 23 if a student; older if

disabled before age 18).

The minimum pension is 100% of the minimum old-age

pension; 200% for the loss of both parents or the death of a

single mother.

Funeral grant: Calculated as the average wage for the month

prior to the date of death.

Benefit adjustment: Benefits are adjusted when the average

wage increases by more than 10%.

Social pension for orphans: 100% of the minimum old-age

pension for each orphan under age 18; older if disabled since

childhood.

Benefit adjustment: The social pension for orphans is adjusted

according to changes in the national average per capita

subsistence income level.

Administrative Organization

Ministry of Labor and Social Protection and its local offices

administer the program.

Sickness and Maternity

Regulatory Framework

First law: 1955.

Current laws: 1992; 1995; 1996, with 1998 amendment; 1999;

and 2002.

Type of program: Social insurance (sickness and maternity

benefits) and universal (medical care) system.

Coverage

Cash sickness and maternity benefits: Persons in covered

employment or in military service (including female military

personnel); and registered unemployed women (maternity

benefits only).

Medical benefits: All residents.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: The cost of medical care. Maternity benefits for

members of the armed forces, the interior service, and students

are paid for out of the state budget.

Qualifying Conditions

Cash and medical benefits: Cash sickness benefits for

insured workers, including foreign citizens and persons

without citizenship working in the Republic of Belarus. There

is no minimum qualifying period for maternity benefits and

medical care.

Sickness and Maternity Benefits

Sickness benefit: 80% of average earnings for the first

6 days of illness; thereafter, 100%.

The monthly maximum benefit is 300% of the average wage.

Benefit is also awarded at 100% of the average wage to care for

a sick child under age 14 for up to 14 days, or for periods of

hospitalization as recommended by a physician.

Maternity benefit: Employed women receive 100% of average

monthly earnings; students on leave from employment receive

100% of the education grant; women who are registered as

unemployed and are currently receiving an unemployment

benefit receive 100% of the an unemployment benefit; women

who are registered as unemployed but who have exhausted the

26 weeks of entitlement to an unemployment benefit receive

200% of the minimum wage.

The monthly minimum benefit is 50% of the minimum consumer

per capita subsistence income level.

The monthly maximum benefit is three times the national

average wage in the month prior to sickness or birth and

maternity leave.

Benefits are payable for 126 calendar days (140 calendar days

in the case of a difficult birth or multiple births). For the

adoption of a child under 3 months old, benefit is payable for a

total of 70 days, starting from the day of adoption.

Prenatal care grant: A lump-sum grant for medical

consultation during the first 12 weeks of pregnancy. The grant

equals 50% of the birth grant (see Family Allowances, below).

Workers’ Medical Benefits

Medical services are provided directly by government health

providers and include general and specialist care,
SSPTW: Europe, 2004 ♦ 41

Belarus

hospitalization, prostheses, medication, and other medical care

services.

Dependents’ Medical Benefits

Medical services are provided directly by government health

providers and include general and specialist care,

hospitalization, prostheses, medication, and other medical care

services.

Administrative Organization

Ministry of Labor and Social Protection and the Fund of Social

Protection of the Population of the Ministry of Labor and

Social Protection provide general supervision.

Cash benefits are provided directly by the enterprises, as well

as by local offices of social protection, as specified by law.

Ministry of Public Health and local health departments provide

general supervision for, and coordination of, medical care.

Medical services are provided through government clinics,

hospitals, maternity homes, and other facilities and are

administered by the Ministry of Public Health and local health

departments.

Work Injury

Regulatory Framework

First law: 1939.

Current laws: 1993 (pensions); 1997 (short-term benefits);

1999 (indemnity for lost earnings and additional expenditures);

and 2003 (mandatory work injury and occupational diseases

insurance), implemented in January 2004.

Type of program: Social insurance system.

Coverage

Employed persons and their survivors, employed convicted

persons, persons employed on the basis of a civil or legal

agreement, and students engaged in vocational training.

Medical care is available to all residents under the general

medical care program.

Source of Funds

Insured person: None.

Employer: Contributions vary according to the sector of

economy and classes of assessed professional risk.

(Contributions are reduced by 50% for nongovernmental

organizations, for associations with staff accounting for at

least 50% disabled persons or pensioners, and for members of

collective and state-owned farms.)

Government: None.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Work injury benefits are reduced by up to 25% if the work

injury is deemed to be caused by gross negligence on the part

of the insured.

Temporary Disability Benefits

The benefit is based on the insured’s adjusted earnings prior

to the certification of disability and according to the loss of

work capacity. The benefit is payable from the first day of

incapacity until recovery or the certification of permanent

disability. The adjusted monthly earnings cannot be less than

60% of the average monthly national wage.

Temporary disability lump-sum benefit: Six times the value of

the earnings-related benefit.

Permanent Disability Benefits

Permanent disability pension: The pension is based on the

insured’s adjusted monthly earnings before the onset of

disability and according to the loss of work capacity. The

adjusted monthly earnings used to calculate the insurance

benefit cannot be less than 60% of the average monthly

national wage.

Earnings-related benefits for work injury or professional

diseases may be paid in addition to other pensions.

Permanent disability lump-sum benefit: Six times the value

of the earnings-related benefit.

Workers’ Medical Benefits

Medical services are provided directly by government health

providers and include general and specialist care,

hospitalization, prostheses, medication, and other medical care

services. Supplementary compensation for additional food

costs, transportation, and other special services necessary in

cases of serious injuries is provided.

Survivor Benefits

Survivor pension: If the insured’s death is the result of a

work injury or an occupational disease, a monthly pension is

paid.

Eligible survivors: Survivors younger than age 18 (age 23 if a

student), old-age pensioners, disabled persons, one of the

insured’s parents, the widow(er), and other nonworking

relatives with dependents younger than age 14 or disabled.

Survivor lump-sum benefit: A lump sum equal to 12 times the

insured’s average monthly earnings.

Eligible survivors: A widow(er), regardless of work capacity,

and other eligible survivors are entitled to an equal share of the

benefit.
42 ♦ SSPTW: Europe, 2004

Belarus

Administrative Organization

Insurance Enterprise of the Republic of Belarus (Belgosstrakh)

administers the mandatory work injury and occupational

diseases insurance program.

Temporary disability benefits are provided directly by the place

of employment, as well as by local social protection offices, as

specified by law.

Ministry of Labor and Social Protection and its local offices

administer the program for permanent disability and survivor

pensions.

Ministry of Public Health and local health departments provide

general supervision and coordination of medical care.

Medical services are provided through government clinics,

hospitals, maternity homes, and other facilities and are

administered by the Ministry of Public Health and local health

departments.

Unemployment

Regulatory Framework

First law: 1921.

Current law: 1991, with 1999 amendment.

Type of program: Social insurance system.

Coverage

Citizens aged 16 to 59 (men) or aged 16 to 54 (women) residing

permanently in the Republic of Belarus.

Source of Funds

Employee: None.

Employer: 1% of payroll; 0.5% in the agricultural sector.

Government: Subsidies as needed from state and local

budgets.

Qualifying Conditions

Unemployment benefit: Unemployed working-age residents

who are registered at the state employment office as

unemployed (must not be enrolled in a day-program at an

educational institute, enlisted in military or government

service, or engaged in a business pursuit) and who are able

and willing to work. Unemployment must not be due to

voluntary leaving.

Unemployment Benefits

70% of average earnings of all employees at the last place of

employment is paid for the first 13 weeks and 50% for the

following 13 weeks for those who were in full-time employment

(or employed for at least 12 weeks in the last 12-month period).

The minimum benefit is the wage base.

The maximum benefit is twice the wage base.

The wage base is determined by the Council of Ministers of

the Republic of Belarus.

For an unemployed person who was not in full-time

employment but had more than 12 months of covered

employment overall (though fewer than 12 weeks’ paid work in

the last 12 months) or for a skilled worker reentering the

workforce after a period of interruption longer than 12 months,

the benefit entitlement is 100% of the wage base for the first

13 weeks and 75% for the following 13 weeks.

For an unskilled unemployed person who is seeking

employment after a prolonged interruption from work and who

has worked for less than a year in total, the benefit entitlement

is 85% of the wage base for 13 calendar weeks and 70% for the

following 13 weeks.

For an unemployed person who is ineligible for regular

unemployment benefits because of inadequate covered

employment but is gainfully employed in the public sector for

at least 22 days, the benefit entitlement is 100% of the wage

base for the first 13 weeks and 75% of the wage base for the

following 13 weeks.

Benefit adjustment: Benefits are adjusted periodically

according to changes in the wage base.

Administrative Organization

State Employment Service of the Ministry of Labor and Social

Protection and its local offices administer the program.

Family Allowances

Regulatory Framework

First law: 1944.

Current laws: 1993; 1998; and 1999 (family allowances), with

2002 amendment.

Type of program: Universal and social assistance system.

Coverage

Families (including those headed by unemployed, disabled, or

single parents or unmarried mothers) with one or more children.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds Old Age, Disability, and

Survivors, above.

Government: See source of funds under Old Age, Disability,

and Survivors, above. Central government budget allocations

cover allowances for children aged 3 or older; local budget

allocations cover means-tested allowances.
SSPTW: Europe, 2004 ♦ 43

Belarus

Qualifying Conditions

Family allowances: All children under age 3. Children aged 3

to 16 (aged 18 if a student and not receiving an education

grant) receive the full benefit rates in families whose monthly

per capita income does not exceed 60% of the minimum per

capita subsistence income level as of September in the

previous year; if the preceding year’s family income is less

than 80% of the minimum per capita subsistence income level,

benefit rates are halved. Families caring for a disabled child

aged 3 to 18 receive full benefits that are not subject to a

means test.

Family Allowance Benefits

Family allowances: Monthly allowances are paid for each

child under age 3 at 65% of the minimum per capita subsistence

income level; for each child aged 3 to 16 years (aged 18 if a

student and not receiving an education grant), 30% of the

minimum per capita subsistence income level.

Additional monthly allowances: Children up to age 1.5 who are

born out of marriage (and when the identity of the father has

been provided by the mother) receive 75% of the monthly

benefit.

Children from ages 1.5 up to 3 who are born out of marriage

(and when the identity of the father has been provided by the

mother) receive 40% of the monthly benefit.

A single parent not receiving alimony receives 40% of the

monthly benefit for each child until age 16 (age 18 if a student).

Families with disabled children under age 18 as well as wives of

military servicemen on regular duty receive 40% of the monthly

benefit.

Nonworking persons who are not pensioners and who care for

a disabled child under age 18 receive 65% of the minimum per

capita subsistence income level.

Each child under age 18 infected with HIV or AIDS receives

45% of the minimum per capita subsistence income level.

Birth grant: A lump sum equal to 200% of the minimum per

capita subsistence income level. The grant is not meanstested.

Administrative Organization

Ministry of Labor and Social Protection provides general

oversight of the program.

Enterprises and employers pay benefits to employees.

Local offices of the Ministry of Labor and Social Protection

administer the program to nonworking mothers.
44 ♦ SSPTW: Europe, 2004

Belgium

Belgium

Exchange rate: US$1.00 equals 0.80 euros (€).

Old Age, Disability, and Survivors

Regulatory Framework

First laws: 1900 (old age) and 1944 (disability).

Current laws: 1967, 1990, and 1996 (old-age pensions for

employees); 1963 (disability); and 2001 (means-tested

allowance for the elderly).

Type of program: Social insurance system.

Coverage

Employed persons; special provisions for miners and seamen.

Coverage for disability is provided under the Sickness and

Maternity program.

Special systems for self-employed persons and civil servants.

Source of Funds

Insured person: 7.5% of earnings. Pensioners contribute

0.5% to 2% of pensions or prepensions.

Employer: 8.86% of payroll.

Government: Annual subsidies.

Contribution rates are applied to 100% of earnings (payroll) for

white-collar workers and to 108% of earnings (payroll) for bluecollar workers.

Disability pensions and funeral grants are financed under the

Sickness and Maternity program.

If the insured person and employer are affiliated with all

branches of social security, a global contribution is paid and

split according to each branch’s needs. (See source of funds

under Family Allowances.)

Qualifying Conditions

Old-age pension: Age 65 with 45 years of coverage for men

and women. (To be phased in for women by 2009.)

In 2004, the retirement age for women is age 63, rising to age 64

(2006) and age 65 (2009). The full benefit for women is based

on 43 years of coverage, rising to 44 years (2006) and 45 years

(2009).

Partial pension: Paid for an incomplete qualifying period.

Early pension: Age 60 (men and women) with 30 years of

covered employment.

Special old-age pension: Paid to a divorced husband or wife at

age 60.

Disability pension: A loss of 2/3 of earning capacity in the

usual occupation with 6 months of insurance, including

120 days of actual or credited work and insurance coverage

during the last quarter.

Survivor pension: A widow(er) aged 45 (any age if disabled

or caring for a child) and married for at least 1 year at the time

of the insured’s death; conditions are waived if a child was

born during the marriage or in the case of an accidental death.

The benefit ceases on remarriage.

Old-Age Benefits

Old-age pension: The full pension is 60% of average lifetime

earnings (75% for a married couple).

The maximum annual earnings for benefit purposes are

€39,367.70. Past earnings are adjusted to reflect wage and price

changes.

Partial pension: A percentage of the full pension

corresponding to the portion of the qualifying period

completed.

Special old-age pension: The special pension is 37.5% of the

former spouse’s earnings during the period of the marriage,

less any pension earned by the divorced person in his or her

own right during the same years.

The minimum pension is €9,991.63 a year for a single person

insured during the full qualifying period; €12,485.63 a year for a

married couple. For workers with at least 2/3 of the insurance

coverage required for the full pension, the minimum pension is

proportionately reduced.

Vacation allowance: An annual payment of €475.94 for a single

person; €594.94 for a couple (in 2002).

Means-tested allowance: €7,022.70 a year for a person living

alone; €4,681.80 a year for a person cohabiting (in 2002).

Benefit adjustment: Benefits are adjusted periodically for retail

price changes.

Permanent Disability Benefits

Disability pension: Equal to 65% of lost earnings (subject to

a ceiling) for an insured person with dependents; 40% if there

are no dependents; 50% if there are no dependents but the

claimant is living with others who have no income. The

pension is payable after 1 year of incapacity. (The first year is

paid under sickness benefit.)

The ceiling applied to the basis salary (earnings) is €101.21 a

day.

The minimum pension for regular workers is €27.18 a day if

there are no dependents; €30.62 a day for a person living

alone; €37.97 a day with dependents. If the insured does not

meet the legal requirements for a regular worker, the minimum

pension is €23.05 a day with no dependents; €30.73 a day with

dependents.

The maximum pension is €40.48 a day with no dependents;

€60.72 a day with dependents.

Benefit adjustment: Benefits are adjusted periodically for retail

price changes.
SSPTW: Europe, 2004 ♦ 45

Belgium

Survivor Benefits

Survivor pension: Equal to 80% of the pension paid or

accrued to the deceased.

The minimum pension is €9,834.53 a year if the worker was

insured for the full qualifying period for the old-age pension.

For survivors of workers with at least 2/3 of the full qualifying

period, the minimum pension is reduced proportionately.

The survivor’s pension plus the widow(er)’s own pension

entitlements must not exceed 110% of his or her own pension

entitlement. A widow(er) who is not eligible for a survivor

pension receives the survivor pension for a limited period of

12 months.

Vacation allowance: An annual payment of €475.94 (in 2002).

Funeral grant: A lump sum is payable under sickness

insurance.

Means-tested allowances: Allowances are payable to needy

survivors.

Benefit adjustment: Benefits are adjusted periodically for retail

price changes (except for the funeral grant).

Administrative Organization

Ministry of Social Affairs, Public Health, and the Environment

provides general supervision.

National Social Security Office is responsible for the collection

of contributions and their distribution to national offices

administering benefits.

National Pensions Office provides the administrative

management of old-age and survivor pensions and the

financial management of the program.

National Insurance Institute for Sickness and Disability

provides the general administration of disability pensions.

Sickness and Maternity

Regulatory Framework

First law: 1894 (mutual benefit societies).

Current law: 1994.

Type of program: Social insurance system.

Coverage

The employee must be a member of a mutual benefit society or

the public auxiliary fund.

Pensioners and other social security beneficiaries are covered

for medical benefits.

Voluntary affiliation is possible for persons not covered under

compulsory coverage.

Special systems operate for self-employed persons (health care

only) and seamen.

Source of Funds

Insured person: 3.55% of earnings (medical benefits) and

1.15% of earnings (cash benefits and disability pensions).

Pensioners contribute 3.55% of the old-age or survivor

pension (low-income pensioners are exempt from

contributions).

Employer: 3.8% of payroll (medical benefits), 2.2% of payroll

(cash benefits and disability pensions), and 0.15% (maternity

benefits).

Government: Subsidy for the management of the social

security system. Proceeds from a surcharge on automobile

insurance and on hospitalization insurance premiums and a tax

on the profit made on reimbursable drugs.

Qualifying Conditions

Sickness and medical benefits: Six months of insurance,

including 120 days of actual or credited work.

Maternity benefits: Six months of insurance preceding the

expected date of childbirth.

Sickness and Maternity Benefits

Cash sickness benefit: 60% of earnings, subject to a ceiling.

After the 31st day of incapacity, the entitlement is 55%; 60% if

there are dependents or if the insured is the sole breadwinner.

In general, benefits are not payable if the employer provides a

guaranteed salary.

The ceiling applied to the basis salary (earnings) is €101.21 a

day.

Cash maternity benefit: The benefit is payable for a maximum

of 15 weeks (17 weeks in the case of multiple births), including

a maximum of 7 weeks (9 weeks in the case of multiple births)

before the expected date of childbirth (of which at least 1 week

is compulsory) and a minimum of 8 weeks after childbirth.

During the first 30 days, the maternity benefit for active

workers is 82% of the basis salary (no ceiling); for the

unemployed or other eligible persons, 79.5% of the basis salary

(subject to a ceiling). The benefit from the 31st day to the end

of the 15th week (17th week in the case of multiple births) is

75% of the basis salary (subject to a ceiling) for all types of

eligible persons.

The ceiling applied to the basis salary (earnings) is €101.21 a

day.

Workers’ Medical Benefits

The benefits provided include general and specialist care,

surgery, hospitalization, medicines, laboratory services,

maternity care, dental care, nursing, rehabilitation,

transportation, and appliances.

The insured person pays varying copayments depending on

income and status.

There is no limit to duration.
46 ♦ SSPTW: Europe, 2004

Belgium

Dependents’ Medical Benefits

The benefits provided include general and specialist care,

surgery, hospitalization, medicines, laboratory services,

maternity care, dental care, nursing, rehabilitation,

transportation, and appliances.

The insured person pays varying copayments depending on

income and status.

There is no limit to duration.

Administrative Organization

Ministry of Social Affairs, Public Health, and the Environment

provides general supervision.

National Social Security Office collects contributions.

National Sickness and Invalidity Insurance Institute

coordinates the program together with various management

committees for cash and medical benefits.

Local agencies pay benefits, including about 78 approved

mutual benefit societies, federated into five national unions,

and a separate fund for railway employees. District offices of

the public auxiliary fund pay benefits for persons not

belonging to a mutual society.

Work Injury

Regulatory Framework

First laws: 1903 (work accidents) and 1927 (occupational

diseases).

Current laws: 1963 (occupational diseases) and 1971 (work

accidents).

Type of program: Social insurance system.

Coverage

Employed persons, including casual labor.

Special system for public-sector employees.

Source of Funds

Insured person: None.

Employer

Work injury: 0.3% of payroll, plus an insurance premium

varying according to the assessed degree of risk.

Occupational disease: 1.1% of payroll.

Government: None.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

90% of base earnings are payable until recovery or until

permanent disability is established.

Daily base earnings equal 1/365 of the full-year earnings for the

year before the accident or the cessation of work because of an

occupational disease. The full-year earnings taken into

account must be between €5,282.14 and €26,470.73. Base

earnings are adjusted annually.

Partial temporary disability: Equal to the difference between

earnings before the onset of disability and current earnings

(after starting part-time work).

In cases of an occupational disease, temporary disability

benefit (for total or partial disability) is not payable unless the

disability lasts at least 15 days.

Benefit adjustment: Benefits are adjusted periodically for retail

price changes in cases in which benefits have been paid for at

least 3 months.

Permanent Disability Benefits

Permanent disability pension: 100% of earnings if totally

disabled.

Base earnings used for calculating the benefit are total

earnings of the year before the accident or the cessation of

work because of an occupational disease, up to a ceiling of

€26,470.73.

Constant-attendance supplement: The level of the supplement

depends on the assessed degree of need of assistance, up to a

maximum of 12 times the average monthly guaranteed income

for a full-time worker. The supplement is terminated on the

91st day of hospitalization.

Partial disability: A percentage of base earnings corresponding

to the assessed degree of permanent disability, except where

the assessed degree of disability is less than 10% (the

percentage amount paid is reduced by half for an assessed

disability of between 0% and 5% and by a quarter if between

5% and 10%).

Benefit adjustment: Benefits are adjusted periodically for retail

price changes (except benefits for an assessed disability of

less than 16%).

Workers’ Medical Benefits

Benefits include medical treatment, surgery, dental treatment,

hospitalization, medicines, appliances, and transportation.

There is full reimbursement of costs according to the schedule

in law.

Survivor Benefits

Survivor pension: 30% of the deceased’s earnings, up to a

maximum. The pension is payable to a widow(er) and to a

divorced spouse receiving alimony. No pension is payable to a

cohabiting partner. Remarriage has no influence on continuing

entitlement.
SSPTW: Europe, 2004 ♦ 47

Belgium

Orphan’s pension: 15% of the deceased’s covered earnings

for each orphan (20% for a full orphan) under age 18; age 18 or

older if entitled to a family allowance.

The total orphans’ pension is 45% of the deceased’s covered

earnings; 60% for full orphans.

Other eligible survivors (in the absence of dependent children):

Parents, grandchildren, and brothers or sisters under age 18.

The total survivor pension must not exceed 75% of the

deceased’s earnings.

Funeral grant: A lump sum of 30 days’ earnings; the minimum

is equivalent to the sickness benefit.

Transport costs: Includes administrative costs and the cost

of transporting the body to the place of burial (including

abroad).

Benefit adjustment: Benefits are adjusted periodically for retail

price changes.

Administrative Organization

Ministry of Social Affairs, Public Health, and the Environment

provides general supervision.

Work injury: Work Injury Fund, a public interest organization,

administers the program and is responsible for controlling the

benefits paid by private companies.

Occupational disease: Occupational Diseases Fund, a public

interest organization, operates under the joint administration of

employers and employees and is responsible for the

compensation of injured workers.

Unemployment

Regulatory Framework

First law: 1920.

Current law: 1991.

Type of program: Social insurance system.

Coverage

Employed persons, including stage performers, temporary

workers, home workers, disabled workers, and professional

athletes.

Source of Funds

Insured person: 0.87% of earnings.

Employer: 1.46% of earnings.

Government: Covers any deficit.

Qualifying Conditions

Unemployment benefit: Under age 36 with 312 days of

insured employment or deemed employment in the 18 months

preceding the date of application for benefit; between ages 36

and 50 with 468 days in the 27 months preceding the date of

application for benefit; or over age 50 with 624 days in the

36 months preceding the date of application for benefit. The

insured must be registered at an unemployment office and

capable and available for work. Unemployment must be

involuntary; otherwise, disqualification for 8 to 52 weeks or the

loss of eligibility to benefit.

Prepension supplement: Age 58 with 25 years of

employment.

Aged unemployed person’s supplement: Aged 50 or older

with 20 years of employment and unemployed for 12 months.

Job search benefit: Under age 30 and does not meet the

requirement for previous insured employment.

Supplementary subsistence benefit: Payable to specified

occupational groups to ensure minimum income.

Unemployment Benefits

Based on the last mean daily salary, up to a ceiling of €64.46.

The benefit depends on the insured’s family status and the

period of unemployment. For the household head, the benefit

is 60% of the basis salary during the entire period of

unemployment; for a single person living alone, 60% of the

basis salary during the first year and 50% thereafter; for a

single person living with other persons who have an income

source, 55% of the basis salary during the first year and 40%

during a second period (the minimum duration of that period is

3 months, and the total duration depends on the person’s

professional career record); thereafter, a flat-rate monthly

benefit of €381.68.

The employer may pay a complementary unemployment benefit

under collective agreement.

Prepension supplement: 50% of the difference between the

monthly benefit and net earnings. The supplement is payable

until retirement age.

Aged unemployed person’s supplement: A monthly

supplement set according to age and family status. Single

persons aged 55 or older are guaranteed 60% of their previous

salary level.

Job search benefit: A variable amount depending on age and

family status.

Supplementary subsistence benefit: Benefit levels are set

under collective agreement.

Benefit adjustment: Benefits are adjusted periodically for retail

price changes.

Administrative Organization

Ministry of Employment and Labor provides general

supervision.

National Social Security Office collects contributions.

National Employment Office adjudicates claims, supervises the

paying agencies, and oversees employment policies through

30 regional offices.
48 ♦ SSPTW: Europe, 2004

Belgium

Public payment offices, or trade unions for their own members,

pay benefits at the local level.

Family Allowances

Regulatory Framework

First law: 1930.

Current laws: 1939 (salaried workers), 1965 (civil servants),

1971 (guaranteed family allowances), and 1976 (self-employed).

Type of program: Social insurance and social assistance

(guaranteed family allowances) system.

Coverage

Salaried workers scheme: Eligible children of salaried

workers (including active, unemployed, retired, disabled, or

deceased workers).

Guaranteed family allowances scheme (means-tested):

Eligible children not covered under any other statutory

scheme.

Special systems for civil servants and the self-employed.

Source of Funds

Insured person: None.

Employer: 7% of payroll (included in the contribution for Old

Age, Disability, and Survivors, above). The social security

management board sets the share of the global contribution

allocated to family allowances annually.

Government: None.

Qualifying Conditions

Family allowances: Awarded without conditions until the last

day of August of the calendar year in which the child reaches

age 18 (age 21 if disabled; age 25 if a student, an apprentice, or

a jobseeker registered for less than 270 days).

Eligible children are those of the insured or the insured’s

partner, dependent brothers and sisters, and any other children

in the insured’s household.

Family Allowance Benefits

Basis family allowance: €74.06 a month for the first child;

€137.03 for the second child; €204.60 for the third and each

subsequent child. €284.50 a month for each orphan.

Social supplement: €37.70 for the first child of a pensioner or

of a person unemployed for longer than 6 months; €81.12 for

the first child of a disabled worker. €23.34 for the second and

each subsequent child of a pensioner, a person unemployed

for longer than 6 months, or a disabled worker.

Age supplement (children born before January 1, 1991):

For a healthy first child born between January 1, 1985, and

December 31, 1990, the supplement is €25.73 if the child is

younger than age 18; otherwise, €27.63. For children born

between January 1, 1981, and December 31, 1984, the

supplement is €41.22. For children born before January 1, 1981,

the supplement is €43.38. For other children, or any sick child,

the supplement is €25.73 if between ages 6 and 12; €39.31 if

older than age 12 but younger than age 18; and €49.99 if older

than age 18.

Age supplement (children born after December 31, 1990):

For a healthy first child, the supplement is €12.90 a month if

between ages 6 and 12; €19.65 if older than age 12 but younger

than age 18; and €22.64 if older than age 18. For other children,

or for any sick child, the supplement is €25.73 a month if

between ages 6 and 12; €39.31 if older than age 12 but younger

than age 18; and €49.99 if older than age 18.

Sick or disabled child supplement (old system): For a

disabled child born before January 2, 1996, with an assessed

degree of incapacity of at least 66%, supplements vary

between €333.17 and €389.87. The child’s autonomy is

calculated according to a 0–9 point schedule.

Sick or disabled child supplement (new system

implemented May 1, 2003): For a disabled child born after

January 2, 1996, supplements are awarded according to the

impact of the illness on the physical and mental capacity of the

child, the activity and participation capacity of the child, and

the implications for the child’s surroundings. Supplements

vary between €64.94 and €432.96.

Birth grant: €1,003.33 for the first birth (or per child for

multiple births); €754.89 for the second and each subsequent

birth.

Benefit adjustment: Benefits are adjusted periodically for wage

and price changes and other economic factors.

Administrative Organization

Ministry of Social Affairs, Public Health, and the Environment

provides general supervision.

National Social Security Office collects contributions and

distributes them among individual funds.

Family allowances are paid by about 26 approved private

occupational, regional, and specialist funds and by two public

organizations.

National Family Allowances Office supervises private funds

and administers allowances to families not covered by a private

fund.
SSPTW: Europe, 2004 ♦ 49

Bulgaria

Bulgaria

Exchange rate: US$1.00 equals 1.57 leva.

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1924.

Current law: 2000 (social insurance code).

Type of program: Dual social insurance and mandatory

individual account system.

Note: A new system consisting of a social insurance first-pillar

plus a second pillar of individual accounts was implemented in

January 2002. Coverage under the first-pillar is universal. The

mandatory individual account system covers all employees

born after December 31, 1959.

Coverage

Employees, self-employed persons, free-lance professionals,

artists, craftsmen, and farmers.

Source of Funds

Insured person: 21% of earnings (social insurance) plus

0.75% of earnings (mandatory individual account).

Self-employed person: 26% of declared income (social

insurance) plus 3% of declared income (mandatory individual

account).

Employer: 5% of payroll (social insurance) plus 2.25% of

payroll (mandatory individual account).

Government: Any deficit in the social insurance system.

Qualifying Conditions

Old-age pension

Social insurance: Age 62 and 6 months (men) or age 57 and

6 months (women). The insured’s age plus the insured’s

length of insurance must be equal to at least 100 points for men

and 91 points for women (individuals are awarded one point for

each year of age as well as one point for each year of insurance

coverage). The retirement age is to be increased (by 6 months

every year until 2009) to age 63 (men) or age 60 (women).

Mandatory individual account: All employees born after

December 31, 1959.

Old-age social pension: Aged 70 or older and subject to an

income test.

Disability pension for general disease (social insurance):

There is no minimum qualifying period for individuals under

age 20 or for the blind; 1 year for those aged 25 to 29; 3 years

for those aged 30; and 5 years’ affiliation for those above

age 30.

Disability pension for work injury or occupational disease

(social insurance): There is no minimum qualifying period.

Disability social pension: Aged 16 or older with an assessed

loss of working capacity of more than 71% and subject to an

income test.

Survivor pension (social insurance): Children up to age 18

(up to age 26 if a student or soldier), a spouse, and parents

older than the official retirement age.

Old-Age Benefits

Old-age pension

Social insurance: One percent of taxable income for every

year of insurance coverage. (Taxable income for benefit

purposes is proportionally reduced for any partial year of

insurance coverage.)

The minimum social insurance old-age pension is 115% of the

social pension.

Mandatory individual account: Benefits are paid as a life-long

pension and are based on the accumulated capital in the

individual account and life expectancy. Benefits are paid

directly by the private fund, and no annuity is bought.

Social pension (income-tested): 50 leva a month.

Permanent Disability Benefits

Disability pension for general disease (social insurance):

The pension is based on the number of years of contributions,

taxable income, the age of the insured if younger than the

official retirement age, and the assessed degree of loss of

working capacity.

Disability pension for work injury or occupational disease

(social insurance): The pension is based on the number of

years of contributions, taxable income, the age of the insured if

younger than the official retirement age, and the degree of loss

of working capacity.

Disability social pension (income-tested): An income-tested

benefit calculated as a percentage of the social pension

(50 leva a month) according to the assessed degree of

disability.

Survivor Benefits

Survivor pension (social insurance): 50% of the insured’s

pension is paid for one survivor; 75% for two survivors; 100%

for three or more survivors.

The minimum pension for each survivor is 90% of the social

pension (50 leva a month).

Administrative Organization

National Social Security Institute administers the social

insurance system.

Financial Supervision Commission is responsible for the

licensing and supervision of pension funds and controls the

system of mandatory individual accounts.
50 ♦ SSPTW: Europe, 2004

Bulgaria

Sickness and Maternity

Regulatory Framework

First law: 1918.

Current laws: 1998 (health insurance law) and 2000 (social

insurance code).

Type of program: Social insurance system.

Coverage

Cash benefits: Employees, self-employed persons, free-lance

professionals, artists, craftsmen, and farmers. Covered

individuals must be insured for all contingencies.

Medical benefits: Compulsory insurance for all residents.

Source of Funds

Insured person

Cash benefits: 0.75% of earnings.

Medical benefits: 1.5% of earnings.

Employer

Cash benefits: 2.25% of payroll.

Medical benefits: 4.5% of payroll.

Government: Any deficit.

Qualifying Conditions

Cash sickness and maternity benefits: Six months of

insurance coverage.

Medical benefits: Resident in the country.

Sickness and Maternity Benefits

Sickness benefit: 80% of the average daily gross wage or the

average daily insurance basis for the 6 calendar months before

the onset of sickness.

Maternity benefit: 90% of the average daily insurance basis.

The benefit is paid for a period of 135 days, beginning 45 days

before the expected date of childbirth.

Funeral grant: Twice the minimum wage (240 leva).

Workers’ Medical Benefits

Medical services are provided directly to patients according to

a National Framework contract between medical institutions

and the National Health Insurance Fund. Benefits include

general and specialist care at health centers, outpatient

departments of hospitals, or home; hospitalization; prescribed

medicines; dental care; and necessary appliances.

Dependents’ Medical Benefits

Medical services are provided directly to patients according to

a National Framework contract between medical institutions

and the National Health Insurance Fund. Benefits include

general and specialist care at health centers, outpatient

departments of hospitals, or home; hospitalization; prescribed

medicines; dental care; and necessary appliances.

Administrative Organization

National Social Security Institute administers cash benefits.

National Health Insurance Fund administers medical benefits.

Work Injury

Regulatory Framework

First law: 1924.

Current law: 2000 (social insurance code).

Type of program: Social insurance system.

Coverage

Employed persons.

Source of Funds

Insured person: None.

Employer: 0.7% of payroll.

Government: None.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

90% of earnings, payable from the first day of incapacity until

recovery or certification of permanent disability.

Permanent Disability Benefits

Permanent disability pension: 50% to 100% of earnings,

depending on the assessed degree of loss of working capacity.

The minimum disability pension is based on the assessed

degree of loss of working capacity and is paid as a percentage

of the social pension (50 leva a month). If the assessed degree

of loss of working capacity is more than 90%, 150% of the

social pension is paid; if between 71% and 90%, 140% of the

social pension is paid; if between 50% and 70%, 115% of the

social pension is paid.

Survivor Benefits

Survivor pension: One survivor receives 50% of the

insured’s disability pension; two survivors receive a combined

total of 75%; three or more survivors receive a combined total

of 100%.

The minimum pension is 90% of the social pension (50 leva a

month).
SSPTW: Europe, 2004 ♦ 51

Bulgaria

Administrative Organization

National Social Security Institute administers the program.

Unemployment

Regulatory Framework

First law: 1925.

Current law: 2002, with amendment.

Type of program: Social insurance system.

Coverage

Employed persons.

Source of Funds

Insured person: 1% of earnings.

Employer: 3% of payroll.

Government: None.

Qualifying Conditions

Unemployment benefits: Nine months of insurance

coverage.

Unemployment Benefits

Calculated as 60% of average earnings during the last

9 months. The duration of benefit depends on the length of

service from 4 months for the minimum service period of up to

3 years to 12 months for more than 25 years of service.

Administrative Organization

National Social Security Institute administers the program.

Family Allowances

Regulatory Framework

First law: 1942.

Current law: 2002 (family benefits law).

Type of program: Social assistance system.

Coverage

Resident in the country.

Source of Funds

Insured person: None.

Employer: None.

Government: Total cost.

Qualifying Conditions

Family allowances: The monthly income for each family

member must be less than 200 leva.

Family Allowance Benefits

Family allowances: 18 leva a month.

Birth grant: 100 leva on the birth of the first child, 200 leva for

the second, 250 leva for the third, and 100 leva on the birth of

each subsequent child.

Administrative Organization

Social Assistance Agency of the Ministry of Labor and Social

Assistance administers the program.
52 ♦ SSPTW: Europe, 2004

Croatia

Croatia

Exchange rate: US$1.00 equals 6.13 kunas.

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1922.

Current laws: 1998 (pension insurance), implemented in 1999,

with 2002 amendment; 1999 (pension funds; insurance

companies and pensions payment), implemented in 2002; and

2002 (social insurance contributions), implemented in 2003.

Type of program: Social insurance and mandatory individual

account system.

Note: A two-pillar system was implemented in two stages in

January 1999 and January 2002. Persons over age 50 when the

new system was implemented are insured under the first-pillar

only and receive a regular pension. Participation in the twopillar system is mandatory for persons up to age 40 and

optional for those between ages 40 and 50. In the two-pillar

system, the first-pillar benefit is the basic pension and the

second-pillar benefit is based on accumulated assets in an

individual account.

Coverage

Employed persons in industry, commerce, or services;

apprentices; civil servants and public employees; military

servicemen; judiciary officers and policemen; persons

contracted on a temporary basis; and self-employed persons in

nonagricultural and agricultural work.

Source of Funds

Insured person

Regular pension: Employees contribute 20% of gross

earnings. The self-employed contribute 20% of insured

earnings; self-employed farmers contribute 10% if they are

nontaxpayers and 20% if taxpayers.

Basic pension: Employees contribute 15% of gross earnings.

The self-employed contribute 15% of insured earnings; selfemployed farmers contribute 5% if they are nontaxpayers and

15% if taxpayers.

Contributions to the regular and basic pensions also finance

disability and survivors insurance.

Individual account: 5% of gross earnings or 5% of insured

earnings.

Employer

Regular pension: None. (Special rules apply for employees in

arduous or unhealthy occupations.)

Basic pension: None. (Special rules apply for employees in

arduous or unhealthy occupations.)

Individual account: None. (Special rules apply for employees

in arduous or unhealthy occupations.)

Government

Regular and basic pension: Covers all or part of the costs as

necessary for military officers, policemen, judiciary officials,

parliamentary deputies, members of government, and disabled

war veterans.

Individual account: None.

The minimum monthly earnings for contribution purposes are

1,858.50 kunas.

The maximum monthly earnings for contribution purposes are

31,860 kunas.

Qualifying Conditions

Old-age pension

Regular and basic old-age pensions: Age 63 with 17 years of

coverage (men) or age 58 with 17 years of coverage (women).

The retirement age will increase by 6 months and the minimum

qualifying period will be reduced by 6 months each calendar

year until 2007. Beginning in 2008, the qualifying conditions

will be age 65 with 15 years of coverage (men) or age 60 with

15 years of coverage (women).

Early pension: Age 58 with 35 years of coverage (men) or

age 53 with 30 years of coverage (women); the early retirement

age will increase by 6 months each year until it reaches age 60

(men) or age 55 (women) in 2008.

Individual account: The insured must meet the qualifying

conditions for a basic old-age or early pension. (In certain

cases, this rule may be applied to the disability or survivor

pension if the value of the individual account pension

combined with the disability or survivor first-pillar basic

disability or survivor pension is greater than the regular firstpillar disability or survivor pension.)

Disability benefits

A permanent reduction in, or loss of, the ability to work that

may be caused by an occupational or nonoccupational injury

or disease. Higher awards are made for a disability resulting

from a work injury or occupational disease.

General disability pension: A permanent loss of the ability to

work because of incurable changes in health occurring prior to

age 63 (men) or age 58 (women). The insured must have

insurance coverage during at least 1/3 of the working life after

age 20 (age 23 for insured persons with postsecondary

education; age 26 for insured persons with a university

degree). There is no minimum qualifying period if the general

(full) disability is the consequence of a work injury or

occupational disease.

Occupational (partial) disability pension: More than 50%

permanent reduction in working capacity occurring after

age 50; before age 50 if the reduced ability to work is not likely

to be improved by occupational rehabilitation. The pension

may be awarded up to age 63 (men) or age 58 (women). The
SSPTW: Europe, 2004 ♦ 53

Croatia

insured must have insurance coverage during at least 1/3 of

the working life. There is no minimum qualifying period if the

occupational (partial) disability is the consequence of work

injury or occupational disease. Under certain conditions the

pension is payable for life.

Occupational rehabilitation and salary compensation: Based

on occupational (partial) disability occurring before age 50

where it is likely that the disabled employed person may regain

the ability to work full-time (40 hours a week). Salary

compensation is payable in the same amount as the

occupational disability pension during the rehabilitation

process until engagement in another job with the same

employer; if no other job is available with the same employer or

acceptable to the insured, it is payable during an

unemployment period of 12 months after the completion of

occupational rehabilitation (24 months if the disability is

caused by an occupational injury or disease). Other jobs

offered in writing must require the same level of education as

was required for the job performed prior to the onset of

disability; if none is available, the job must require the next

lower degree of education.

Compensation allowance for physical injury: Awarded for the

loss of, or damage to, a part of the body or of an organ

resulting from an occupational injury or disease. The insured’s

injury must be assessed as at least 30%. The allowance is

awarded whether or not the injury led to the determination of a

disability.

Individual account: Payable if the value of the individual

account pension combined with the first-pillar basic disability

pension is greater than the regular first-pillar disability

pension.

Survivor pension

Regular and basic old-age pensions: The deceased was a

pensioner, an occupational rehabilitation beneficiary, or had

completed 5 years of insurance coverage or a 10-year

qualifying period or met the qualifying period conditions for a

disability pension. There is no minimum qualifying period if

the death was the consequence of a work injury or

occupational disease.

Individual account: Payable if the value of the individual

account pension combined with the first-pillar basic survivor

pension is greater than the regular first-pillar survivor pension.

Old-Age Benefits

Old-age pension

Regular old-age pension: The pension depends on the level

of wages earned in relation to the average wage of all

employed persons and on the length of qualifying period

completed.

The minimum pension is calculated as 0.825% of the adjusted

average gross salary of all employees in 1998 for every year of

coverage, up to a maximum of 30 years. For coverage periods

beyond 30 years, the calculation is based on half of the amount

per year. Beginning July 2003, 42.45 kunas is paid per

qualifying year for the first 30 years and 21.23 kunas per

qualifying year for each year beyond 30.

The maximum pension depends on the length of qualifying

period completed and previous earnings up to a ceiling.

Early pension: The pension is reduced for each month that the

pension is awarded before the retirement age. The reduction

remains in force after reaching the official retirement age.

Benefit adjustment: Pensions are adjusted every 6 months

according to a joint index based on the change in the cost of

living and the change in the national average gross salary.

Basic old-age pension: The pension is based on the average

gross salary of all employed persons in the preceding year, the

number of years of personal coverage in the new system, and

previous earnings up to a ceiling.

Individual account: The pension is based on the accumulated

assets in the individual account and average life expectancy at

retirement.

All pensions are payable abroad.

Permanent Disability Benefits

Disability pension: The pension depends on the level of

wages earned in relation to the average wage of all employed

persons, the length of qualifying periods completed (except in

case of work injury or occupational disease), and the assessed

degree of disability (total loss of, or permanent reduction in,

the capacity to work).

In most cases, benefits for disability insurance are paid under

the first-pillar.

For a disability caused by a work injury or an occupational

disease, the minimum number of years used for the calculation

of the pension is 40. The amount of the pension is calculated

according to years of coverage and the value of the pension

per qualifying year. The full amount is paid for general

disability; the occupational disability pension is 80% of the

general disability pension; 33.3% if the beneficiary is still

employed. The general disability pension is not payable while

the beneficiary is employed.

The minimum pension is calculated as 0.825% of the adjusted

average gross salary of all employees in 1998 for every year of

coverage, up to a maximum of 30 years. For coverage periods

beyond 30 years, the calculation is based on half of the amount

per year. Beginning July 2003, 42.45 kunas is paid per

qualifying year for the first 30 years and 21.23 kunas per

qualifying year for each year beyond 30.

The maximum pension depends on the length of qualifying

period completed and previous earnings up to a ceiling.

Pensions are payable abroad.

Occupational rehabilitation and salary compensation: The

benefit is the same amount as the occupational disability

pension unless the disability was caused by a work injury or

occupational disease, in which case it is the same amount as

the general disability pension based on a 40-year qualifying

period.
54 ♦ SSPTW: Europe, 2004

Croatia

Compensation allowance for physical injury: The allowance

depends on the assessed degree of physical injury resulting

from a work injury or professional disease only. There is no

minimum qualifying period. The allowance is payable during

employment or self-employment and, after that, for the duration

of the lifetime.

Benefit adjustment: Benefits are adjusted every 6 months

according to a joint index based on the change in the cost of

living and the change in the national average gross salary.

Survivor Benefits

Survivor pension: The amount is based on the insured’s

actual or hypothetical old-age or disability pension and on the

number of survivors. The minimum number of years for the

pension calculation is 21; if the death of the insured was

caused by a work injury or occupational disease, the minimum

number of years is 40.

In most cases, benefits for survivors insurance are paid under

the first-pillar.

The minimum pension is calculated as 0.825% of the adjusted

average gross salary of all employees in 1998 for every year of

coverage, up to a maximum of 30 years. For coverage periods

beyond 30 years, the calculation is based on half of the amount

per year. Beginning July 2003, 42.45 kunas is paid per

qualifying year for the first 30 years and 21.23 kunas per

qualifying year for each year beyond 30.

The maximum pension depends on the length of qualifying

period completed and previous earnings up to a ceiling.

Eligible survivors: A widow(er) aged 50, caring for eligible

children, or disabled (a woman who is widowed at age 45

becomes eligible on reaching age 50); and children up to age 15

(age 18 if unemployed, age 26 if a student, no limit if disabled).

Pensions are payable abroad.

Benefit adjustment: Benefits are adjusted every 6 months

according to a joint index based on the change in the cost of

living and the change in the national average gross salary.

Administrative Organization

Regular and basic pensions

Ministry of Labor and Social Welfare and the Ministry of

Finance provide general supervision.

Croatian Pension Insurance Institute administers benefits.

Disability and survivor pensions

In most cases, benefits for disability and survivors insurance

are paid under the first-pillar, with the contributions paid to the

individual account transferred to the Croatian Pension

Insurance Institute.

Individual account

Ministry of Labor and Social Welfare and the Ministry of

Finance provide general supervision.

Agency for the Supervision of Pension Funds and Insurance

provides legal supervision.

Central Registry, pension companies, and pension insurance

companies provide general administrative services and

administer benefits.

Sickness and Maternity

Regulatory Framework

First law: 1954.

Current laws: 2001, implemented in 2002, with 2002 and 2003

amendments; 2002 (social insurance contributions),

implemented in 2003; and 2003 (medical care).

Type of program: Social insurance system.

Coverage

Cash and medical benefits: Employed persons, public

employees, civil servants, self-employed persons, salaried fulltime apprentices, temporary contract workers, military

servicemen, persons engaged in vocational training or

completing postgraduate study abroad, and those employed

by a foreign employer if they are not covered under the

employer’s country provisions.

Medical benefits only: Farmers, pensioners, unemployed

persons, persons entitled to occupational rehabilitation, and

persons up to age 18 (age 26 if a student), disabled former

military servicemen without resources, dependents of an

insured person, and voluntarily insured persons.

Source of Funds

Insured person: Employees do not contribute. Farmers

contribute 7.5% of earnings if they are nontaxpayers and 15%

if taxpayers, plus 0.5% of earnings for work injury and

occupational diseases. Self-employed persons and the

voluntarily insured contribute 15% of earnings, plus 0.5% of

earnings for work injury and occupational diseases.

Employer: 15% of payroll, plus 0.5% of payroll for work injury

and occupational diseases.

Government: Contributes for certain categories of persons.

The minimum monthly earnings for contribution purposes are

1,858.50 kunas (persons with lower earnings contribute as

though they earn 1,858.50 kunas).

The maximum monthly earnings for contribution purposes are

31,860 kunas (persons with higher earnings contribute as

though they earned 31,860 kunas).

Qualifying Conditions

Cash sickness and medical benefits: There is no minimum

qualifying period. Entitlement to cash sickness benefit is

determined by a designated doctor in a primary health care

institution for the first period of sickness (the duration
SSPTW: Europe, 2004 ♦ 55

Croatia

depending on the type of disease); further periods are

determined by the decision of the Medical Commission of the

Health Insurance Institute. The maximum duration is 6 months,

after which the Invalidity Commission of the Pension

Insurance Institute decides whether the insured is permanently

disabled, cured, or in need of further treatment. In the latter

case, a new maximum 6-month period of temporary disability

starts until the insured is cured.

Cash maternity and parental leave benefits: A designated

doctor in a primary health care institution must certify the

pregnancy.

Maternity grant: Paid on the birth of a child.

Sickness and Maternity Benefits

Sickness benefit: Benefits vary between 70% and 100% of

the average monthly salary earned in the preceding 6-month

period; 100% of the average monthly salary is paid for sickness

resulting from a work injury or occupational disease,

participation in the Homeland War, pregnancy and childbirth,

the donation or transplantation of tissues and organs, or if

nursing a sick child up to age 3. Benefit is payable depending

on the prescribed category of disease, up to a maximum of

6 months of consecutive illness. The employer pays for the

first 42 days.

The minimum benefit is 850 kunas a month.

The maximum benefit is 4,250 kunas a month.

Maternity benefit: 100% of salary is payable until the child is

6 months (beginning 28 to 45 days before the expected date of

childbirth). Additional benefit is payable until the child is age 1

(age 2 for twins).

Obligatory parental leave for the mother begins 28 days before

the expected date of childbirth (45 days in case of

complication), and lasts at least up to 42 days after childbirth.

The leave period may be extended until the child is age 1. After

the 42nd day the father can opt to take the parental leave in

place of the mother.

The minimum benefit is 1,600 kunas a month.

The maximum benefit is 4,250 kunas a month until the child is

6 months old; thereafter, 1,600 kunas a month until the child is

age 1 (age 2 for twins).

Unemployed mothers receive 900 kunas a month during the

first 6-month maternity period.

Maternity grant: A lump sum of 1,360 kunas.

Funeral grant: A lump sum of 850 kunas.

Workers’ Medical Benefits

Benefits are provided by public and private health institutions

contracted with the Croatian Institute for Health Insurance.

Benefits include primary and specialist treatment,

hospitalization, orthopedic and other aids, dental care,

approved pharmaceuticals, laboratory services, maternity care,

preventive care services, emergency aid, rehabilitation

services, appliances, and transportation.

Cost sharing: Cost sharing by patients varies according to the

nature of the service provided. There are free services for

children under age 18, persons with low income, disabled

persons needing constant assistance, disabled homeland

veterans, persons registered at the Croation Institute for

Health Insurance as unemployed and voluntary blood donors

who have made 35 donations (men) or 25 donations (women).

Dependents’ Medical Benefits

Benefits are provided by public and private health institutions

contracted with the Croatian Institute for Health Insurance.

Benefits include primary and specialist treatment,

hospitalization, orthopedic and other aids, dental care,

approved pharmaceuticals, laboratory services, maternity care,

preventive care services, emergency aid, rehabilitation

services, appliances, and transportation.

Cost sharing: Cost sharing by patients varies according to the

nature of the service provided. There are free services for

children under age 18, low-income persons, disabled persons

needing constant assistance, disabled homeland veterans,

persons registered at the Croation Institute for Health

Insurance as unemployed and voluntary blood donors who

have made 35 donations (men) or 25 donations (women).

Administrative Organization

Ministry of Health provides general supervision.

Governed by a managing council, the Croatian Institute for

Health Insurance, with 20 district offices, administers benefits.

Work Injury

Regulatory Framework

There is no specific program for work injury. Cash and medical

benefits for a work injury are provided through the Old Age,

Disability, and Survivors and Sickness and Maternity

programs, above. For an assessed illness or disability that is

the result of a work injury or an occupational disease, benefits

are granted under more favorable conditions and at higher

rates than general sickness and disability benefits.

Unemployment

Regulatory Framework

First law: 1952.

Current laws: 2002, with 2003 amendment; and 2002 (social

insurance contributions), implemented in 2003.

Type of program: Social insurance system.
56 ♦ SSPTW: Europe, 2004

Croatia

Coverage

All employed persons with pension insurance based on an

employment contract, including public employees, civil

servants, policemen, judiciary officers, and military personnel.

Exclusions: Self-employed persons and farmers.

Source of Funds

Insured person: None.

Employer: 1.7% of payroll.

Government: Periodic subsidies and the total or partial cost

of benefits for certain categories of persons.

The minimum monthly earnings on which employers contribute

on behalf of employees are 1,858.50 kunas (contributions for

employees with lower earnings are paid as though they earn

1,858.50 kunas).

The maximum monthly earnings on which employers contribute

on behalf of employees are 31,860 kunas.

Qualifying Conditions

Unemployment benefit: Nine months of employment in the

last 24 months. The insured must register with the

Employment Institute in the first 30 days of unemployment.

There is no qualifying period for unemployed mothers caring

for children younger than age 1. Persons whose employment

ceased as a result of willful misconduct or by agreement with

the employer are not entitled to unemployment benefit.

Unemployed workers with 32 years (men) or 27 years (women)

of employment are covered until they are reemployed; the

required period of employment will rise by 1 year per year until

it reaches 35 years (men) or 30 years (women) in 2007.

Benefit may be extended to women during pregnancy and up

until the child is age 1 if there is no entitlement to benefits

under another program. The benefit may be extended during

temporary incapacity for work for up to 3 months.

Lump-sum payment: For beneficiaries of unemployment

benefit who became unemployed because of the restructuring

of their place of employment or because of unforeseen

personal circumstances.

Pension insurance: Unemployed persons of retirement age are

also entitled to unemployment benefit until the completion of

the minimum qualifying period for the old-age pension, up to a

maximum of 5 years.

Unemployment assistance: Payable to unemployed persons

who participate in vocational training.

Reimbursement of traveling and removal costs: If costs

are incurred as a result of finding new employment away from

the regular place of residence.

Unemployment Benefits

The average wage in the last 3 months. The benefit is payable

for between 78 and 390 days, depending on the duration of

previous employment.

The minimum benefit is 797 kunas a month.

The maximum benefit is 1,000 kunas a month.

Lump-sum payment: Depending on the duration of previous

employment, a lump sum equal to 2, 4, or a maximum of

6 monthly unemployment benefits.

Unemployment assistance: 797 kunas a month.

Reimbursement of traveling and removal costs: A lumpsum payment.

Administrative Organization

Managed by a tripartite nine-member committee, the

Employment Institute administers the program through its

central office and 22 regional and 91 local offices.

Family Allowances

Regulatory Framework

First law: 1949.

Current law: 2001, implemented in 2002.

Type of program: Social assistance system.

Coverage

Parents (including foster parents, tutors, stepparents, and

grandparents) who are Croatian citizens (or foreign citizens

with a permit for permanent settlement) and who resided in

Croatia for at least 3 years before the claim. Children must be

under age 15 (regardless of whether they are at school);

children older than age 15 are eligible under special conditions

(attending secondary school, ill, or disabled).

Source of Funds

Insured person: None.

Employer: None.

Government: Total cost.

Qualifying Conditions

Family allowances (children allowance): Children under

age 15 (under age 19 if a secondary school student, until

age 21 in case of illness or until age 27 if seriously disabled).

No allowance is paid if the child is permanently placed in a

specialized institution.

There is no minimum qualifying period or an employment

requirement for parents.
SSPTW: Europe, 2004 ♦ 57

Croatia

Family Allowance Benefits

Family allowances (children allowance): Total household

income for the year before the one in which the claim is made

must be no more than 40% of the 2003 state budget base of

3,326 kunas.

Households whose income does not exceed 40% of the state

budget base (1,330.40 kunas) receive a minimum means-tested

benefit equal to 5% of the state budget base.

Households whose income does not exceed 20% of the state

budget base receive a minimum means-tested benefit equal to

9% of the state budget base.

Allowances for eligible single-parent households are awarded

at a rate that is 15% higher than the means-tested award.

Allowances for eligible full orphans and for eligible

households with disabled children are awarded at a rate that is

25% higher than the means-tested award.

Allowances for eligible, seriously disabled children are

awarded at a rate of 25% of the state budget base.

Administrative Organization

Ministry of Labor and Social Care provides general

supervision.

State Institute for the Protection of Family, Maternity, and

Youth provides legal supervision.

Croatian Pension Insurance Institute administers the program.
58 ♦ SSPTW: Europe, 2004

Cyprus

Cyprus

Exchange rate: US$1.00 equals 0.47 pounds (£).

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1956.

Current laws: 1980 (social insurance) and 1995 (old-age social

pension).

Type of program: Social insurance and social assistance

system.

Coverage

Social insurance: Employed and self-employed persons

aged 16 to 64.

Voluntary coverage for formerly covered persons and for

Cypriots working abroad for Cypriot employers.

Social assistance: The old-age social pension is available to

persons aged 65 or older who are not entitled to a pension or a

similar payment from any source.

Source of Funds

Insured person

Social insurance: 6.3% of earnings; voluntary contributors,

10% of earnings.

Social assistance: None.

Self-employed person

Social insurance: 11.6% of earnings.

Social assistance: None.

Employer

Social insurance: 6.3% of payroll.

Social assistance: None.

Government

Social insurance: 4% of payroll.

Social assistance: Total cost.

All of the above social insurance contributions also finance

cash sickness, maternity, work injury, and unemployment

benefits (6% of total contributions paid by the insured person,

the employer, and government finance unemployment

benefits).

The maximum weekly earnings for contribution and benefit

purposes are £441.

Qualifying Conditions

Old-age pension (social insurance): Age 65 (age 63 for

miners) with a minimum of 3 years’ contributions and earnings

in the lower band (covered earnings up to the basic earnings

level) at least equal to 156 times weekly basic insurable

earnings and weekly average earnings (paid and credited)

since 1964 or since age 16 at least equal to 25% of basic

insurable earnings.

Weekly basic insurable earnings are £73.47.

Early pension: Age 63 if the weekly average of paid and

credited earnings is at least equal to 70% of weekly basic

insurable earnings. Miners aged 58 or older with a minimum of

5 years’ employment may receive a pension 1 month earlier for

every 5 months of work on the condition that they retire from

that occupation.

A widow may substitute her husband’s coverage record for her

own for the period before his death.

Lump-sum payment (social insurance): Payable at age 68 to

a person who does not meet the contribution conditions for an

old-age pension; persons with a minimum of 3 years’

contributions and covered earnings at least equal to 156 times

weekly basic insurable earnings but without weekly average

earnings (paid and credited) since 1964 or since age 16 at least

equal to 25% of basic insurable earnings.

Social pension (social assistance): Age 65 with 20 years’

residence after age 40 or 35 years’ residence after age 18.

Disability pension (social insurance): Permanent incapacity

for work. Contribution conditions are the same as for the oldage pension, above; plus paid or credited contributions in the

year preceding the onset of disability must be equal to at least

20 times weekly basic insurable earnings. (Alternatively,

average insurable earnings in the last 2 years must be equal to

at least 20 times basic insurable earnings.) If the disability is

caused by an accident, the same qualifying conditions apply

as for cash sickness benefit.

Survivor pension (social insurance): Contribution

conditions are the same as for the old-age pension. (A lump

sum is paid if the qualifying conditions are not met.) If death is

caused by an accident, the same qualifying conditions apply

as for cash sickness benefit.

Orphan’s pension (social insurance): The deceased was

insured and supported the child; for full orphans, one of the

parents was insured.

Lump-sum payment (social insurance): Paid when there is

no entitlement to a survivor pension because of insufficient

average basic insurable earnings.

Missing person’s allowance (social insurance): Payable to

a dependent if the whereabouts of the insured is unknown and

he or she is presumed dead.

All pensions are payable abroad.
SSPTW: Europe, 2004 ♦ 59

Cyprus

Old-Age Benefits

Old-age pension (social insurance): The basic pension is

equal to 60% of average basic insurable earnings, plus a

supplementary pension equal to 1.5% of insurable earnings

above basic insurable earnings.

Weekly basic insurable earnings are £73.47.

Dependent supplement: The basic pension is increased by 1/3

for the first dependent and by 1/6 for the second and third

dependents; for a married female beneficiary, 1/6 of the basic

pension for each child up to a maximum of two children.

Schedule of payments: Pensions are paid 13 times a year.

Lump-sum payment (social insurance): 15% of total paid

and credited earnings.

Social pension (social assistance): £142.84 a month. If

receiving another pension or a similar payment that is lower

than the social pension, the difference between the two

pensions is paid.

Special allowance: Payable to all pensioners with pension

income (excluding dependent supplements) up to £500.

Benefit adjustment: Pensions in payment are adjusted in

January and July each year. (In January, the basic part is

adjusted according to wages and the supplementary part

according to prices; in July, the basic and supplementary parts

are adjusted according to prices.)

Past earnings are adjusted once a year according to changes in

wages.

Permanent Disability Benefits

Disability pension (social insurance): The basic pension is

equal to 60% of average basic insurable earnings, plus a

supplementary pension equal to 1.5% of insurable earnings

above basic insurable earnings.

Weekly basic insurable earnings are £73.47.

Dependent supplement: The basic pension is increased by 1/3

for the first dependent and by 1/6 for the second and third

dependents; for a married female beneficiary, 1/6 of the basic

pension for each child up to a maximum of two children.

Schedule of payments: Pensions are paid 13 times a year.

Benefit adjustment: Pensions in payment are adjusted in

January and July each year. (In January, the basic part is

adjusted according to wages and the supplementary part

according to prices; in July, the basic and supplementary parts

are adjusted according to prices.)

Past earnings are adjusted once a year according to changes in

wages.

Survivor Benefits

Survivor pension (social insurance): The basic pension is

equal to 60% of the insured’s average basic insurable earnings,

plus 60% of the insured’s supplementary pension. The

pension is payable to a dependent widow(er).

Weekly basic insurable earnings are £73.47.

Remarriage settlement: A lump sum equal to 1 year’s pension is

payable upon remarriage.

Orphan’s pension (social insurance): For full orphans, 40%

of deceased’s basic insurable earnings plus 50% of the

supplementary widow’s pension for one orphan and 100% for

two or more orphans under age 15; under age 23 for an

unmarried female orphan in full-time education; under age 25

for a male student or military serviceman; no limit if disabled.

The benefit for a half orphan is 20% of basic insurable earnings

for one child, 30% for two children, and 40% for three or more

children.

Weekly basic insurable earnings are £73.47.

Termination settlement: A lump sum equal to 1 year’s orphan’s

pension is payable on the termination of the pension due to

age.

Schedule of payments: Pensions are paid 13 times a year.

Lump-sum payment (social insurance): A lump sum equal

to 15% of the deceased’s basic insurable earnings plus 9% of

the earnings above the basic earnings level is payable, unless

the surviving spouse is entitled to a social pension.

Weekly basic insurable earnings are £73.47.

Missing person’s benefit (social insurance): Same as the

old-age pension, including the dependent supplement.

Funeral grant (social insurance): £303 upon the death of the

insured or a pensioner; £151.50 upon the death of a dependent.

Benefit adjustment: Pensions in payment are adjusted in

January and July each year. (In January, the basic part is

adjusted according to wages and the supplementary part

according to prices; in July, the basic and supplementary parts

are adjusted according to prices.)

Past earnings are adjusted once a year according to changes in

wages.

Administrative Organization

Director of Social Insurance Services in the Ministry of Labor

and Social Insurance and a tripartite advisory Social Insurance

Board direct the program.

Ministry of Labor and Social Insurance, through the

Department of Social Insurance, administers the program.

Sickness and Maternity

Regulatory Framework

First law: 1956.

Current law: 1980.

Type of program: Social insurance (cash benefits) and

national health service (medical care) system.
60 ♦ SSPTW: Europe, 2004

Cyprus

Coverage

Cash benefits: Employed and self-employed persons aged 16

to 63.

Voluntary coverage for Cypriots aged 16 to 63 working abroad

for Cypriot employers. Persons between ages 64 and 65 are

covered if they are not entitled to the old-age pension.

Medical care: All residents of limited means, public

employees, police officers, and members of the armed forces.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: See source of funds under Old Age, Disability,

and Survivors, above. The total cost of medical care.

Qualifying Conditions

Sickness benefit: Twenty-six weeks of paid contributions

with 20 contributions paid or credited in the last year. After

entitlement is exhausted, the insured can requalify upon the

payment of 26 contributions.

Maternity benefit: Twenty-six weeks of paid contributions

with 20 contributions paid or credited in the last year.

Maternity grant: Twenty-six weeks of paid contributions with

20 contributions paid or credited in the last year.

Medical benefits: All residents of limited means, public

employees, police officers, and members of the Armed Forces.

Sickness and Maternity Benefits

Sickness benefit: 60% of average basic insurable earnings in

the last year, plus a supplement of 50% of average earnings

above the basic amount in the last year, up to a maximum of

twice basic insurable earnings. The benefit is payable after a

3-day waiting period (18 days for the self-employed) for up to

52 weeks (the minimum is 26 weeks).

Dependent supplement: One-third of basic benefit for a

dependent spouse and 1/6 for other dependents (up to a

maximum of two dependents). A spouse is dependent if he or

she is not working or is not receiving any benefit from the

Social Insurance Fund.

Weekly basic insurable earnings are £73.47.

Past earnings are adjusted once a year according to changes in

wages.

Maternity benefit: 75% of average insurable earnings during

the last year. The benefit is payable for 16 weeks beginning

between the 6th and 2nd week before expected date of

childbirth.

The benefit is payable for 14 weeks to stepmothers for adopted

children if the adoption takes place before the child is age 13.

Weekly basic insurable earnings are £73.47.

Past earnings are adjusted once a year according to changes in

wages.

Maternity grant: £223 (payable also to the nonworking wife

of an insured man).

Workers’ Medical Benefits

Medical services are provided directly to patients in

government hospitals and dispensaries. Benefits include

medical treatment, hospitalization, maternity care, and

medicines.

Dependents’ Medical Benefits

Same as for the insured person.

Administrative Organization

Director of Social Insurance Services in the Ministry of Labor

and Social Insurance and a tripartite advisory Social Insurance

Board direct the program.

Ministry of Labor and Social Insurance, through the

Department of Social Insurance, administers the program.

Ministry of Health provides medical services through

government hospitals.

Work Injury

Regulatory Framework

First law: 1942.

Current law: 1980.

Type of program: Social insurance system.

Coverage

Employed persons.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: See source of funds under Old Age, Disability,

and Survivors, above.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

60% of average basic insurable earnings in the last year,

payable after a 3-day waiting period for up to 12 months.
SSPTW: Europe, 2004 ♦ 61

Cyprus

Dependent supplement: One-third of basic benefits for a

dependent spouse and 1/6 for other dependents (up to a

maximum of two dependents). A spouse is dependent if he or

she is not working or is not receiving any benefit from the

Social Insurance Fund.

Supplementary benefit: 50% of average insurable earnings

above basic insurable earnings in the last year, up to a

maximum of twice basic insurable earnings.

The minimum benefit plus supplements is £68.74 a week.

Weekly basic insurable earnings are £73.47.

Past earnings are adjusted once a year according to changes in

wages.

Permanent Disability Benefits

Permanent disability pension: £41.24 a week if 100%

disabled.

Partial disability: A percentage of the full (basic and

supplementary) pension in proportion to the assessed degree

of disability (between 20% and 99%) or a lump sum for an

assessed degree of disability of between 10% and 19%.

Supplementary permanent disability pension: 60% of average

earnings above basic earnings in the last 2 years.

Weekly basic insurable earnings are £73.47.

Dependent supplement: One-third of the basic benefit for a

dependent spouse and 1/6 for other dependents (up to a

maximum of two dependents). A spouse is dependent if he or

she is not working or is not receiving any benefit from the

Social Insurance Fund.

Constant-attendance supplement: £20.64 a week if 100%

disabled and in need of constant care and attention.

Benefit adjustment: Pensions in payment are adjusted in

January and July each year. (In January, the basic part is

adjusted according to wages and the supplementary part

according to prices; in July, the basic and supplementary parts

are adjusted according to prices.)

Past earnings are adjusted once a year according to changes in

wages.

Workers’ Medical Benefits

Benefits include all necessary medical treatment and

hospitalization in government dispensaries and hospitals.

Survivor Benefits

Survivor pension: Same as the basic permanent disability

pension, plus 60% of the supplementary permanent disability

pension. The pension is payable to a dependent widow(er).

Remarriage settlement: A lump sum equal to 1 year’s pension is

payable upon remarriage.

Orphan’s pension: For full orphans, 40% of deceased’s basic

insurable earnings plus 50% of the supplementary widow’s

pension for one orphan and 100% for two or more orphans

under age 15; under age 23 for an unmarried female orphan in

full-time education; under age 25 for a male student or military

serviceman; no limit if disabled. The benefit for a half orphan

is 20% of basic insurable earnings for one child, 30% for two

children, and 40% for three or more children.

Weekly basic insurable earnings are £73.47.

Termination settlement: A lump sum equal to 1 year’s orphan’s

pension is payable on the termination of the pension due to

age.

Dependent parent (in the absence of the above): 40% of

basic insurable earnings per week plus 30% of the

supplementary permanent disability pension.

Weekly basic insurable earnings are £73.47.

Past earnings are adjusted once a year according to changes in

wages.

Funeral grant: £303.

Administrative Organization

Director of Social Insurance Services in the Ministry of Labor

and Social Insurance and a tripartite advisory Social Insurance

Board direct the program.

Ministry of Labor and Social Insurance, through the

Department of Social Insurance, administers the program.

Unemployment

Regulatory Framework

First law: 1956.

Current law: 1980.

Type of program: Social insurance system.

Coverage

Employed persons aged 16 to 63 (including voluntarily insured

persons who work for Cypriot employers abroad).

Employed persons aged 64 to 65 are covered if they are not

entitled to an old-age pension.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: See source of funds under Old Age, Disability,

and Survivors, above.

Six percent of total contributions paid by the insured person,

the employers, and government toward old-age, disability, and

survivors benefits are transferred to the Unemployment Benefit

Account to finance unemployment benefits.
62 ♦ SSPTW: Europe, 2004

Cyprus

Qualifying Conditions

Unemployment benefit: Twenty-six weeks of paid

contributions with 20 contributions paid or credited in the last

year. After entitlement is exhausted, requalification is possible

upon the payment of 26 weeks of contributions. The insured

must be capable of and available for work and must report

weekly to the employment exchange. If unemployment is due

to voluntary leaving, misconduct, direct participation in a trade

dispute, the refusal of a suitable job offer, or the failure to avail

one’s self of a job opportunity, the insured may be disqualified

for up to 6 weeks.

Unemployment Benefits

60% of average basic insurable earnings in the last year, plus a

supplement of 50% of average earnings above the basic

amount in the last year, up to a maximum of twice basic

insurable earnings. The benefit is payable after a 3-day waiting

period (30 days for the voluntarily insured) for at least

156 days.

Weekly basic insurable earnings are £73.47.

Past earnings are adjusted once a year according to changes in

wages.

Dependent supplement: One-third of basic benefits for a

dependent spouse and 1/6 for other dependents (up to a

maximum of two dependents). A spouse is dependent if he or

she is not working or is not receiving any benefit from the

Social Insurance Fund.

Administrative Organization

Director of Social Insurance Services in the Ministry of Labor

and Social Insurance and a tripartite advisory Social Insurance

Board direct the program.

Ministry of Labor and Social Insurance, through the

Department of Social Insurance, administers the program.

Family Allowances

Regulatory Framework

First and current laws: 1987 (child benefit) and 2000

(mother’s allowance).

Type of program: Universal system.

Coverage

Child benefit: All residents with four or more children.

Mother’s allowance: Mothers residing in Cyprus with at least

four children who are not entitled to a child benefit.

Source of Funds

Insured person: None.

Employer: None.

Government: Total cost.

Qualifying Conditions

Child benefit: The parent receiving the benefit must be

residing in the country, but the child need not be. The family

must include four or more dependent children. A child is

dependent if under age 15; between ages 15 and 18 and

unmarried; between ages 18 and 25 and in military service;

between ages 18 and 25 (male) or ages 18 and 23 (female) and

in full-time education; no limit if disabled.

Mother’s allowance: Mothers residing in Cyprus with at least

four children who are not entitled to a child benefit.

Family Allowance Benefits

Child benefit: £31.35 a month for each dependent child (2002).

Mother’s allowance: £31.35 a month for each dependent child

(2002).

Benefit adjustment: Benefits are adjusted in January each year

according to changes in prices.

Administrative Organization

Director of Social Insurance Services in the Ministry of Labor

and Social Insurance and a tripartite advisory Social Insurance

Board direct the program.

Ministry of Labor and Social Insurance, through the

Department of Social Insurance, administers the program.
SSPTW: Europe, 2004 ♦ 63

Czech Republic

Czech Republic

Exchange rate: US$1.00 equals

25.71 koruna (CZK).

Old Age, Disability, and Survivors

Regulatory Framework

First laws: 1906 (salaried employees) and 1924 (wage earners).

Current law: 1995.

Type of program: Social insurance system.

Coverage

Employees, members of assimilated groups, including certain

groups of students, farmers, artists, the unemployed, carers,

military personnel, and the self-employed.

Voluntary coverage is available to certain categories of

persons, including persons employed abroad.

Source of Funds

Insured person: 6.5% of earnings.

Self-employed person: 28% of declared earnings.

Employer: 21.5% of payroll.

Government: Any deficit.

The maximum assessment base for self-employed persons is

40% of declared earnings.

Qualifying Conditions

Old-age pension: Age 61 and 6 months (men) or age 56 to 60

(women), according to the number of children raised.

Since January 1, 1996, the retirement age has been gradually

increasing by 2 months per year for men and by 4 months per

year for women. The target retirement age of 63 will be reached

after December 31, 2012, for men and for women without

children. For women with children the retirement age will be

age 59 to 62 according to the number of children raised.

Retirement will be based on 25 years of insurance; 15 years if

aged 65.

Early pension: Retirement is possible up to 3 years before the

normal retirement age. All employment must cease.

Deferred pension: The pension is increased for every 90 days

of economic activity during which the claim for an old-age

pension is postponed.

Disability pension: Total disability (66% loss of earning

capacity) or partial disability (33% loss of earning capacity)

with at least 5 years of insurance in the last 10 years (up to

4 years if under age 28).

Survivor pension: The deceased qualified for a pension or

was a pensioner at the time of death.

Old-Age Benefits

Old-age pension: A flat-rate basic amount (1,310 CZK) plus

an earnings-related percentage amount based on the personal

assessment base (PAB) and the number of years of insurance.

PAB: Currently based on average gross earnings over the last

18 years preceding retirement. Originally based on 10 years

preceding retirement, this period is being extended by 1 year

every year until it reaches a total of 30 calendar years. The

value of the old-age pension is calculated using 1.5% of the

personal assessment base per year of insurance (no maximum).

The calculation of the personal assessment base includes a

percentage of monthly earnings:

• 100% of earnings up to 7,500 CZK,

• 30% of earnings from 7,500 CZK to 19,200 CZK, and

• 10% of earnings over 19,200 CZK.

The minimum pension is 2,080 CZK, equal to the flat-rate basic

amount (1,310 CZK) plus 770 CZK.

Temporarily reduced early pension: Available up to 2 years

prior to the normal retirement age provided that the insured

person has a minimum of 25 years of insurance and has

received a partial or a full disability pension for at least 5 years

and entitlement to a disability pension has expired within

5 years of reaching the normal retirement age. The pension is

reduced by 1.3% of the personal assessment base for every

(even incomplete) period of 90 days prior to the normal

retirement age, but the pension is fully restored upon reaching

the normal retirement age.

Permanently reduced early pension: Available up to 3 years

prior to the normal retirement age; the actual date of retirement

is left to the insured’s discretion. The insured must have at

least 25 years of contributions. The pension is reduced by

0.9% for every (even incomplete) 90-day period preceding the

normal retirement age. This reduction is permanent and

continues after the recipient reaches the normal retirement age.

Deferred pension: For every 90 days of economic activity

during which the claim for an old-age pension is postponed, an

increase of 1.5% of the personal assessment base is provided.

Permanent Disability Benefits

Disability pension: The full disability pension is calculated as

a flat-rate basic amount (1,310 CZK) plus an earnings-related

amount calculated using 1.5% of the personal assessment base

per year of insurance. The projected insurance period is

credited from the onset of disability up to the normal retirement

age.

The minimum disability pension is 2,080 CZK, equal to the flatrate basic amount (1,310 CZK) plus 770 CZK.

There is no maximum disability pension.

Partial disability: A flat-rate basic amount (1,310 CZK) plus

0.75% of the personal assessment base for every year of

insurance.
64 ♦ SSPTW: Europe, 2004

Czech Republic

The minimum partial disability pension is 1,695 CZK, equal to

the flat-rate basic amount (1,310 CZK) plus 385 CZK.

There is no maximum partial disability pension.

Survivor Benefits

Widow(er) pension: A flat-rate basic amount (1,310 CZK) plus

50% of the earnings-related amount of the deceased’s pension.

The pension is payable to all widow(er)s for 1 year; thereafter,

only to widows aged 55 or widowers aged 58; any age if

disabled or caring for a dependent or disabled child or for a

disabled parent.

Orphan’s pension: A basic amount of 1,310 CZK plus 40% of

the earnings-related amount of the deceased’s pension for

each dependent child (for full orphans, the basic amount is

payable only once).

The value of the pension is increased in cases of disability. In

the case of partial incapacity (up to 33% loss in earning

capacity), the value is increased by 20% of the subsistence

minimum; in the case of a major but not total incapacity

(between 34% and 65% loss in earning capacity), by 40%; or in

the case of total incapacity (66% or more loss in earning

capacity), by 75%.

In the case of a claim for another pension (old-age or disability

pension), the amount paid is the highest pension plus half of

the earnings-related amount of the other pension.

Administrative Organization

Ministry of Labor and Social Affairs provides general

supervision and is responsible for policy development for all

areas of social security except health insurance.

Social Security Administration collects and administers

contributions and delivers benefits through its Central

Administration and 76 District Administrations.

Sickness and Maternity

Regulatory Framework

First law: 1888.

Current laws: 1956 (cash sickness benefits), 1968 (maternity

benefits), and 1997 (public health insurance).

Type of program: Social insurance (cash benefits) and

universal (medical benefits) system.

Coverage

Cash benefits: Employees, members of industrial production

cooperatives, and advanced students. For self-employed

persons, sickness insurance is voluntary.

Medical benefits: All permanent residents in the Czech

Republic or employees whose employer resides in the Czech

Republic.

Source of Funds

Insured person: 1.1% of earnings (cash sickness and

maternity benefits) and 4.5% of earnings (medical benefits).

Self-employed person: 4.4 % of declared earnings for cash

sickness and maternity benefits and 13.5% of declared

earnings for medical benefits.

Employer: 3.3% of payroll (cash sickness and maternity

benefits) and 9% of payroll (medical benefits).

Government: Any deficit for cash sickness and maternity

benefits and medical benefits; total cost for special categories

of covered people.

The maximum assessment base for self-employed persons is

40% of declared earnings.

Qualifying Conditions

Cash sickness benefits: Compulsory for all employees;

voluntary for the self-employed. Only those with gross

earnings over 400 CZK a month or working more than 7 days a

month are insured. A doctor’s certificate is required from the

first day of illness. Neither a minimum period of employment

nor any minimum period of residence is required. There is no

waiting period.

Cash maternity benefits: 270 days of insurance in the

2 years preceding childbirth, loss of earnings, childbirth or

taking substitute care of a child (substitute carers may include

men), and medical confirmation of pregnancy.

Cash medical benefits: Currently insured. There is no

minimum coverage period. Eligibility continues for 6 weeks

after coverage ceases.

Sickness and Maternity Benefits

Sickness benefit: For the first 3 days, 50% of the daily

assessment base; from the 4th day, 69%. The benefit is

payable from the first day of incapacity for up to 1 year; up to

2 years if recovery is likely.

Daily assessment base: The calculation of the daily

assessment base includes a percentage of gross earnings:

• 90% for the first 14 days of illness and 100% from the 15th

day for gross earnings up to 480 CZK.

• 60% for gross earnings from 480 CZK up to 690 CZK.

• Gross earnings over 690 CZK are exempt.

The maximum daily assessment base for calculating sickness

benefit is 558 CZK for the first 14 days of illness and 606 CZK

for the rest of the period of illness.

Maternity benefit: 69% of the daily assessment base (as

calculated for cash sickness benefit from the 15th day) is

payable for 28 weeks (37 weeks for a single mother and for

multiple births) including at least 6 weeks before the expected

date of childbirth.

The maximum maternity benefit is 419 CZK a day.
SSPTW: Europe, 2004 ♦ 65

Czech Republic

Workers’ Medical Benefits

Health care is provided free of charge under the scope and

conditions stipulated by law. Benefits includes medical

treatment in outpatient and inpatient care facilities; emergency

and rescue services; preventive care; the provision of drugs,

medical aid, and appliances; stomatologic treatment (diseases

of the mouth); spa treatment; the care of children in special

medical institutions and convalescent homes; preventive care

provided in enterprise and factory surgeries; transportation of

the sick; refunding of travel costs; medical assessment; and

the examination of deceased insured persons and autopsy

including the transportation of the dead. There is no limit to

duration.

Dependents’ Medical Benefits

Health care is provided free of charge under the scope and

conditions stipulated by law. The Czech health insurance

system is based on individual insurance for each person.

Administrative Organization

Social Security Administration collects and administers

contributions and delivers cash sickness benefits through its

Central Administration and 76 District Administrations.

Organizations with more than 25 employees pay sickness

benefits.

Ministry of Labor and Social Affairs provides general

supervision for sickness insurance. Subsidiary offices, on a

regional and district level, administer cash benefits.

Ministry of Health provides general supervision for medical

services.

Medical services are provided in state and private outpatient

and inpatient care facilities on the basis of contracts set up

with individual insurance companies.

Work Injury

Regulatory Framework

First law: 1887.

Current laws: 1956 (short-term benefits), 1990 (selfemployed), and 1995 (pensions).

Type of program: Employer-liability system.

Coverage

Employees and eligible survivors.

Source of Funds

Insured person: None.

Employer: The purchase of insurance premiums.

Government: Any deficit between the insurance cover

provided by the employer and the awarded compensation paid

to the insured.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

Lump-sum benefits are provided.

Permanent Disability Benefits

Compensation for loss of earnings is payable up to age 65.

Workers’ Medical Benefits

Medical expenses are paid.

Survivor Benefits

Survivor maintenance grant: A lump sum of 50,000 CZK for

a spouse; a lump sum of 80,000 CZK for an orphan.

Alimony for a survivor: Reimbursement of costs.

Medical expenses: Reimbursement of treatment-related

costs.

Funeral grant: The reasonable cost of a funeral.

Administrative Organization

Ministry of Labor and Social Affairs provides general

supervision for the provision of temporary and permanent

disability benefits and survivor pensions.

Social Security Administration collects and administers

contributions and delivers benefits through its Central

Administration and 76 District Administrations.

Administrative roles are also played by two insurance

companies and by large-scale employers.

Ministry of Health provides general supervision for the

provision of medical benefits.

Unemployment

Regulatory Framework

First law: 1991.

Current laws: 1992 and 1997, with 2002 amendment.

Type of program: Social insurance system.
66 ♦ SSPTW: Europe, 2004

Czech Republic

Coverage

Czech Republic citizens (and foreign citizens permanently

resident in the Czech Republic) who are at least 15 years old

and capable of working.

Source of Funds

Insured person: 0.4% of earnings.

Employer: 3.2% of payroll.

Government: Any deficit.

Qualifying Conditions

Unemployment benefit: Registered as looking for work and

employed for at least 12 months in the past 3 years.

Employment periods include vocational training, job training

undertaken by a disabled person, basic military service or

alternative civil service, providing care for a child up to age 3

(or up to age 18 if seriously disabled), time spent caring for a

relative, any period during which a job seeker was paid a full

disability pension, and periods accredited by the Ministry of

the Interior for long-term voluntary service.

Unemployment Benefits

50% of earnings during the first 3 months; 40% for next

3 months; 60% in case of retraining.

The maximum benefit is 10,250 CZK a month; 11,480 CZK in the

case of retraining.

Administrative Organization

Ministry of Labor and Social Affairs provides general

supervision.

Labor offices administer benefits.

Family Allowances

Regulatory Framework

First law: 1945.

Current law: 1995.

Type of program: Universal system.

Coverage

Families with children.

Source of Funds

Insured person: None.

Employer: None.

Government: Total cost.

Qualifying Conditions

Family allowances: Dependent children (up to age 26 if a

student).

Family Allowance Benefits

Family allowances: Income-tested allowances. If family

income is below 1.1 times the living minimum, the benefit is

equal to 32% of the child living minimum for each child; if

family income is from 1.1 times to 1.8 times the living minimum,

28% of the child living minimum for each child; if family income

is from 1.8 times to 3 times the living minimum, 14% of the child

living minimum for each child; if family income is over 3 times

the living minimum, there is no entitlement.

Birth grant: Paid at five times the child living minimum for one

child; at six times for two children; 10 times if there are three or

more children.

Parents’ allowance: If caring at home for a child up to age 4,

the allowance is 1.1 times the adult living minimum.

Administrative Organization

Ministry of Labor and Social Affairs provides general

supervision.

Labor offices administer benefits.
SSPTW: Europe, 2004 ♦ 67

Denmark

Denmark

Exchange rate: US$1.00 equals 6 kroner.

Old Age, Disability, and Survivors

Regulatory Framework

First laws: 1891 (old age) and 1921 (disability).

Current laws: 1964 (labor-market supplementary pension,

ATP), with 1998 amendment (special pension savings scheme,

SP) implemented in 1999 and 2000 amendment implemented in

2002; 1984 (universal old-age and disability pensions), with

amendments; and 1986 (partial early retirement pension), with

amendments.

Type of program: Universal, social insurance, and mandatory

individual account system.

Coverage

Universal pension: Resident citizens aged 16 to 66 (aged 16

to 69 from July 2004); noncitizens meeting the minimum

residency requirements or covered by reciprocal agreements.

Labor-market supplementary pension (ATP): Employees

aged 16 to 66 (aged 16 to 69 from July 2004), including persons

on parental leave and recipients of cash sickness or

unemployment benefits. Coverage is optional for the selfemployed and for recipients of disability pensions or early

retirement benefits (see Unemployment, below).

Special pension savings scheme (SP): Employees aged 16

to 66 (aged 16 to 69 from July 2004), including persons on

parental leave, recipients of cash sickness or unemployment

benefits, and the self-employed.

Source of Funds

Insured person

Universal basic pension: None.

ATP: Up to a maximum of 894 kroner a year for a full-time

worker. Recipients of unemployment benefits, sickness and

maternity benefits, and certain vocational training benefits pay

double contributions.

SP: 1% of gross income. (Contributions are suspended for

2004 and 2005.)

Employer

Universal basic pension: None.

ATP: Up to a maximum of 1,788 kroner (for a full-time worker)

per employee per year.

SP: None.

Government

Universal basic pension: Total cost.

ATP: Up to a maximum of 1,788 kroner (for a full-time worker) a

year for recipients of social assistance benefits. Recipients of

unemployment benefits, sickness and maternity benefits, or

certain vocational training benefits pay double contributions.

SP: None.

Qualifying Conditions

Old-age pension

Universal basic pension (earnings-tested): From age 67 (from

age 65 from July 2004) with at least 3 years’ residence between

ages 16 and 66 (between ages 16 and 64 from July 2004).

Full pension: Forty years’ residence (benefits are

proportionately reduced with fewer years of residence).

Deferred pension: A deferred pension is possible until age 70

(from July 2004).

The pension is payable abroad.

Universal pension supplement (income-tested): From age 67

(from age 65 from July 2004) with at least 3 years’ residence

between ages 16 and 66 (between ages 16 and 64 from July

2004).

Partial early retirement pension: Aged 60 to 65, residing in

Denmark, employed full time for at least 10 of the last 20 years,

and continuing to work for 12 to 30 hours a week. Employees

must have participated in the ATP scheme for at least 10 of the

last 20 years and worked at least 18 of the last 24 months in

Denmark. The self-employed must have worked full-time

during the last 5 years, been self-employed in Denmark for at

least 4 of the last 5 years (including 9 of the last 12 months),

and must reduce working hours on average to 18.5 hours a

week.

ATP: Age 65 (age 67 if born before July 1, 1939). The benefit is

actuarially related to the individual’s contributions and

contribution record. The full ATP pension requires a full and

continuous contribution record since the start of the program

in 1964 (or from age 16 if later). From July 2004, the

pensionable age is 65 for all covered persons.

The pension is payable abroad.

SP: Age 65 (age 67 if born before July 1, 1939). The benefit is

based on the capital accrued in the individual’s account. From

July 2004, the pensionable age is 65 for all covered persons.

The pension is payable abroad.

Disability pension

Disability (anticipatory) pension: The basic disability pension

(income-tested) and the disability supplement (income-tested)

are payable from ages 18 to 64 (age 66 if aged 60 before

July 1, 1999) with at least 3 years’ residence from age 15 and if

working capacity is reduced and the person cannot assure his

or her subsistence.
68 ♦ SSPTW: Europe, 2004

Denmark

Disablement supplement: A cash benefit for the partial

compensation of additional expenses arising from the

disability.

ATP: No benefit is provided.

SP: No benefit is provided.

Survivor pension

Universal pension: Abolished in 1984, benefits are payable to

a surviving spouse under old-age or disability pensions if

eligible in his or her own right.

Eligible survivors include spouses, cohabitants, divorced

partners (under certain conditions), and children under age 21.

The deceased must have had 10 years of coverage (including

2 years under the changes implemented January 1, 2002) and

been married for at least 10 years to the survivor. The

surviving spouse must have been married or cohabiting

2 years immediately prior to the insured’s death. For a

divorced spouse, the deceased must have paid a maintenance

grant just prior to death, and the marriage must have lasted 5 or

10 years.

Orphans under age 18 are eligible for benefits under Family

Allowances.

ATP: A lump sum is payable to a surviving spouse and each

child under age 18 (old scheme) or under age 21 (new scheme).

SP: The capital accrued in the individual account of the

deceased is transferred to the estate.

Old-Age Benefits

Old-age pension

Universal basic pension (earnings-tested): 4,648 kroner a

month.

Universal pension supplement (income-tested): 4,512 kroner a

month (single pensioners); 2,184 kroner a month (others).

Partial early retirement pension: The maximum pension is

86,892 kroner a year if work is reduced to 12 hours a week.

Deferred pension: Higher pensions are paid for years worked

beyond age 65 (from July 2004).

Benefit adjustment: Pensions and benefits are adjusted

annually according to wage growth.

ATP: Pension entitlement depends on the individual’s

contribution record.

The maximum annual pension for new pensioners who paid full

contributions from 1964 to 2004 is 22,000 kroner.

Benefit adjustment: Accrued pension rights and cash

pensions under the ATP are adjusted through bonus

allowances.

SP: Pension entitlement depends on the individual’s

contribution record. The capital in the individual SP accounts

is adjusted annually according to the SP’s investment return.

Benefits are paid in installments over a 10-year period. Lumpsum payments are awarded for pensioners with low account

balances.

Permanent Disability Benefits

Disability pension

Disability (anticipatory) pension: The maximum pension is

13,895 kroner a month for single persons; 11,810 kroner for

those not living alone.

Disability supplement (income test): The amount is set

according to individual circumstances, taking into account

expected expenses. The minimum supplement is 6,000 kroner a

year.

Benefit adjustment: Benefits are adjusted annually according

to wage growth.

ATP: No disability pensions are payable under the ATP

scheme.

SP: No disability pensions are payable under the SP scheme.

Survivor Benefits

Survivor pension

Universal pension: No pension is provided.

Death grant: A lump-sum payment (up to a maximum of

8,000 kroner; 6,750 kroner if under age 18), depending on the

deceased’s assets and liabilities, is provided under the

National Health Security Act.

Benefit adjustment: The grant is adjusted annually according

to wage growth.

Dependent survivor’s allowance (income-tested): A spouse

or cohabitant who lived with the deceased for at least 3 years

may receive a lump sum of up to 11,255 kroner, depending on

income and assets. No benefit is paid if income exceeds

281,374 kroner a year.

ATP: A lump sum of 40,000 kroner is payable to the surviving

spouse (if the deceased was older than age 65, the amount is

reduced by 1/5 for each year between ages 66 and 70) and to

each child under age 21.

SP: The capital in the deceased’s account is transferred to the

deceased’s estate.

Administrative Organization

Universal pension: Ministry of Social Affairs provides

general supervision and national administration.

Local (municipal) governments administer pensions.

National Directorate of Social Security and Assistance

administers universal pensions paid abroad.

ATP: The Labor-Market Supplementary Pension Institution,

an independent organization headed by a bipartite board of

directors, administers the ATP program.

SP: The Labor-Market Supplementary Pension Institution, an

independent organization headed by a bipartite board of

directors, administers the SP program.
SSPTW: Europe, 2004 ♦ 69

Denmark

Sickness and Maternity

Regulatory Framework

First law: 1892.

Current laws: 1971 (medical benefits), with amendments; and

1989 (cash benefits), with amendments.

Type of program: Universal (medical benefits) and direct

provision (cash benefits) system.

Coverage

Cash sickness and maternity benefits: Employees and selfemployed persons.

Medical benefits: All residents.

Source of Funds

Insured person: None (cash and medical benefits). Selfemployed persons may voluntarily contribute for cash benefits

to insure against the first 2 weeks of incapacity.

Employer: The total cost of cash benefits for the first 2 weeks

if the employee worked for the same employer for 8 weeks

before the onset of incapacity. No contribution is made for

medical benefits.

Government: Local government meets the total cost of cash

benefits from the third week (from day 1 if the insured is

ineligible for the 2-week benefit from the employer). Local

government (county level) finances the total cost of medical

benefits.

Qualifying Conditions

Cash sickness and maternity benefits: Must have 74 hours

of employment in the preceding 8 weeks.

Medical benefits: Resident of Denmark. If moving from

another country, there is a 6-week qualifying period.

Sickness and Maternity Benefits

Sickness benefit: Up to 3,113 kroner a week, based on the

hourly wage; for employees, the benefit is payable from the

first day of incapacity; for the self-employed, the benefit is

payable from the third week of incapacity (may insure

voluntarily for the first 2 weeks).

The benefits provided under the national cash benefit program

are payable weekly for 52 weeks within any 18-month period.

The benefit may be extended under specified circumstances.

Maternity benefit: Up to 3,203 kroner a week. For employees,

the benefit is payable for up to 52 weeks, including from

4 weeks before and 14 weeks after the expected date of

childbirth for the mother and, concurrently, 2 weeks paid leave

for the father; after the 14th week, both parents may share a 52-

week leave period that may be split up or postponed but must

be taken before the child’s 9th birthday.

In case of adoption, benefit is payable for a 46-week leave

period beginning from the date the parent takes charge of the

child. After the 14th week, both parents may share a 32-week

leave period that may be split up or postponed but must be

taken before the child’s 9th birthday.

Additional leave of up to 3 months is granted if the child is

hospitalized as a result of a disease contracted in connection

with birth.

Workers’ Medical Benefits

Free service benefits are provided with a restricted choice of

doctor, or the patient pays part of expenses with a free choice

of doctor. Benefits include general practitioner care, specialist

care, treatment by psychologists under special circumstances,

hospitalization in a public hospital, 50% to 85% of the cost

above 520 kroner a year of most prescribed drugs, maternity

care by a midwife or doctor, home nursing, chiropractic,

physiotherapy, the cost of some dental care, and

transportation for pensioners.

There is no limit on duration (except for treatment by

psychologists, chiropractors, and physiotherapists).

Dependents’ Medical Benefits

Same as for the family head.

Administrative Organization

Sickness and maternity benefits: Ministry of Social Affairs

provides general supervision and national administration.

Municipal governments administer sickness and maternity

benefits at the local level.

Medical benefits: Ministry of Health provides general

supervision and national administration.

Municipal and county governments administer medical

benefits at the local level.

Work Injury

Regulatory Framework

First law: 1898.

Current law: 1998.

Type of program: Universal (medical benefits) and direct

provision (cash benefits) system, involving compulsory

income security provisions through a private carrier

(accidents) and the Labor-Market Occupational Disease Fund

(occupational diseases).

Coverage

Employed and self-employed persons in fishing and shipping.

Coverage is extended to persons with a congenital injury or

congenital disease resulting from the work or employment

history of either parent.
70 ♦ SSPTW: Europe, 2004

Denmark

Source of Funds

Insured person: Employees, none. Self-employed persons,

the total cost of insurance.

Employer: For permanent disability benefits, the total cost of

compulsory income security provisions through a private

carrier (accidents) and the Labor-Market Occupational Disease

Fund (occupational diseases). For temporary disability

benefits, see source of funds for sickness benefit under

Sickness and Maternity, above.

Government: See source of funds under Sickness and

Maternity, above.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

Up to 3,113 kroner a week, based on the hourly wage; for

employees, the benefit is payable from the first day of

incapacity; for the self-employed, the benefit is payable from

the third week of incapacity (may insure voluntarily for the first

2 weeks).

The benefits provided under the national cash benefit program

are payable weekly for 52 weeks within any 18-month period.

The benefit may be extended under specified circumstances.

Permanent Disability Benefits

Permanent disability pension: If totally disabled, 80% of

earnings of the preceding year. The minimum assessed degree

of disability for benefit entitlement is 15%.

The maximum annual earnings for benefit purposes are

379,000 kroner. The maximum earnings are adjusted annually

for changes in average wages.

Partial disability: For an assessed degree of disability of

between 50% and 99%, a percentage of the full pension in

proportion to the loss of earning capacity. For an assessed

degree of disability of between 15% and 49%, a lump sum

equal to the commuted value of the partial pension.

For those who reached age 60 before July 1, 1999, the pension

ceases at age 67, and a lump sum of 2 years’ benefit is paid.

For those who reached age 60 on July 1, 1999, or later, the

pension ceases at age 65, and a lump sum of 4 years’ benefit is

paid.

Compensation for a long-term incapacity to perform daily

routine tasks: 430,000 kroner if 100% incapacitated;

compensation is reduced for lower degrees of incapacity.

Benefit adjustment: Benefits are adjusted according to

changes in the average wage.

Workers’ Medical Benefits

The cost of prosthesis, artificial limbs, orthopedic equipment

and wheel chairs, and some specialist care (most medical

services are obtained under ordinary sickness insurance).

Survivor Benefits

Survivor pension: 30% of the insured’s earnings is paid for

up to 10 years. The pension is payable to the spouse or to a

cohabitant of at least 2 years at the time of death. The pension

is payable if the survivor remarries. At age 67, the survivor

pension is discontinued and a lump sum of 2 years’ benefit is

paid.

Orphan’s pension: 10% of the insured’s earnings for each

orphan and 20% for each full orphan, up to a maximum of 50%.

The pension is payable through age 18 (age 21 if a student).

The total maximum survivor and orphan’s pension is 70% of

the insured’s earnings.

Special death benefit: A lump sum of 119,000 kroner is

payable to a spouse or to a cohabitant of at least 2 years at

time of death.

Benefit adjustment: Pension and benefits are adjusted

annually according to wage growth.

Administrative Organization

Ministry of Social Affairs provides general supervision.

National Board of Industrial Injuries provides direct

supervision of private carriers for work accidents.

Labor-Market Occupational Disease Fund (an independent,

self-governing institution) administers the employer-funded

programs for occupational diseases.

Unemployment

Regulatory Framework

First law: 1907.

Current laws: 1970 (employees) and 1976 (self-employed).

Type of program: Subsidized voluntary insurance system.

Coverage

Employees aged 18 to 65, the self-employed, and persons who

have completed at least 18 months of vocational training.

Covered persons must be members of an approved

unemployment fund established voluntarily by trade unions

(for instance, in industry, commerce, office work, agriculture,

handicrafts, catering, transport, or quarrying).

Source of Funds

Insured person: Membership contributions to an

unemployment insurance fund consists of a variable
SSPTW: Europe, 2004 ♦ 71

Denmark

contribution toward financing the fund (rates vary according

to fund), a mandatory fixed contribution toward the payment of

unemployment insurance, and a voluntary fixed contribution

toward payment of early retirement pay.

Employees and the self-employed pay 8% of their gross salary

or earnings toward the Labor Market Fund to cover state

expenditure on unemployment insurance benefits and

voluntary early retirement pay.

Employer: A part of the supplementary 3% value-added tax

base of the enterprise.

Government: Any cost above the insured person’s and

employer/employee contributions.

Qualifying Conditions

Unemployment benefit: Membership in an unemployment

fund during the last 12 months (self-employed included) and

52 weeks of employment in last 3 years.

Unemployment must not be due to voluntary leaving,

misconduct, a labor dispute, or the refusal of a suitable job

offer. The claimant must be registered for employment and

capable of, and willing to, work.

Voluntary early retirement pay scheme: Resident and aged 60

to 65 (including the self-employed) and a member of an

unemployment fund for 25 of the last 30 years; 20 of the last

25 years if born before July 1, 1964; or 10 of the last 15 years if

born before March 1, 1952.

Unemployment Benefits

90% of average earnings of the previous 12 weeks, up to

3,205 kroner a week. The benefit is payable from the first day

of unemployment (5 days a week) for an initial period of 1 year

(job-seeking period). The self-employed have a waiting period

of 4 weeks. The initial benefit period may be followed by a

second period of 3 years. If the unemployed person is aged 55

to 59, the second period may be extended until the 60th

birthday to allow entitlement to the voluntary early retirement

pay scheme.

Voluntary early retirement pay scheme: The maximum benefit is

91% of the highest unemployment benefit, but not more than

2,916 kroner a week. Certain favorable conditions apply to

workers staying in the labor market for a minimum period of

2 years after age 60.

Administrative Organization

Ministry of Employment and Directorate of Labor provide

general supervision.

Recognized unemployment funds (with at least 5,000 members)

administer the program nationally.

Union officials usually manage funds.

Local branches of the unemployment funds collect

contributions and pay benefits.

Family Allowances

Regulatory Framework

First law: 1952.

Current law: 1986.

Type of program: Universal system.

Coverage

Resident citizens, noncitizens resident in Denmark for 1 year or

more (3 years for a special supplement), or noncitizens covered

by reciprocal agreements.

Source of Funds

Insured person: None.

Employer: None.

Government: Total cost.

Qualifying Conditions

Family allowances: The child must be under age 18.

Family Allowance Benefits

Family allowances: The basic annual allowance is

13,204 kroner for each child up to age 2; 11,932 kroner for each

child aged 3 to 6; 9,388 kroner for each child aged 7 to 17.

General supplement: 4,156 kroner a year for each child (for

example, in the case of a family with a single breadwinner).

Extraordinary supplement: 4,228 kroner a year for a singleparent household (only one supplement is provided per

household regardless of the number of children).

Special supplement: Full orphans receive 23,952 kroner a year;

half-orphans receive 8,384 kroner; children of pensioners

receive 10,608 kroner a year (one pensioner parent) or

16,448 kroner a year (two pensioner parents); in cases of

multiple births, 6,840 kroner a year for each child between

ages 0 and 6; for the adoption of a foreign child, a one-time

grant of 39,492 kroner.

Benefit adjustment: Allowances and supplements are adjusted

annually according to changes in wages.

Administrative Organization

Ministry of Social Affairs provides general supervision and

national administration.

Local (municipal) governments administer the program.
72 ♦ SSPTW: Europe, 2004

Estonia

Estonia

Exchange rate: US$1.00 equals

12.61 kroons (EEK).

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1924.

Current laws: 2002 and 2003.

Type of program: Social insurance and mandatory individual

account system.

Coverage

Social insurance: All persons currently residing in Estonia.

Mandatory individual account: All persons born on or after

January 1, 1983, covered by social insurance, including the

self-employed.

Persons born on or after January 1, 1942, or before January 1,

1983, may contribute voluntarily.

Source of Funds

Social insurance

Insured person: None.

Self-employed person: 33% of income equal to or above the

minimum salary.

Employer: 33% of payroll.

Government: The cost of some pensions and the cost of

pension supplements and funeral grants.

All of the above contributions also finance sickness and

maternity benefits and work injury benefits.

Mandatory individual account

Insured person: 2% of earnings.

Self-employed person: 4% of income. (The contribution is

taken from the 33% of income contribution for social

insurance.)

Employer: 4% of payroll. (The contribution is taken from the

33% of payroll contribution for social insurance.)

Government: None.

Qualifying Conditions

Old-age pension

Social insurance: Age 63 with 15 years of service (men) or

age 59 with 15 years of service (women). (The retirement age

for women is to be raised 6 months each year until it reaches

age 63.)

National pension: Age 63 and does not qualify for a social

insurance old-age pension. Must have been resident in

Estonia for at least 5 years before making the claim and not

receiving a pension from any other country.

Mandatory individual account: Age 63 with 15 years of service

(men) or age 59 with 15 years of service (women). (The

retirement age for women is to be raised 6 months each year

until it reaches age 63.)

Disability pension

Social insurance: Aged 16 to 63 with between 1 and 14 years

of insurance coverage or credited pensionable service

depending on the insured’s age.

National pension: The loss of at least 40% of working

capacity and does not qualify for a social insurance disability

pension. Must not receive a pension from any other country.

Mandatory individual account: No disability benefits are

provided.

Survivor pension

Social insurance: Survivors must be incapable of gainful

activity. The insured had 1 to 14 years of insurance coverage

or pensionable service depending on age.

Eligible survivors: Survivors include children, stepchildren,

siblings, and grandchildren under age 18 or disabled; a parent,

stepparent, surviving spouse or guardian not gainfully

employed and raising the deceased’s children; and brothers,

sisters, or grandchildren under age 14.

National pension: Payable on the death of the family

breadwinner who does not qualify for a social insurance

pension. The survivor must not receive a pension from any

other country.

Mandatory individual account: Survivors designated by the

insured are eligible for benefits; in the absence of designated

survivors, the insured’s spouse and orphans are considered

the primary beneficiaries.

Old-Age Benefits

Old-age pension

Social insurance old-age pension: The pension includes a

flat-rate base amount (577.33 EEK) and an amount based on

years of pensionable service.

National pension: The benefit is 100% of the national pension

rate (913.37 EEK).

Benefit adjustment: The national pension is set by legislation

and adjusted for changes in the cost of living.

Mandatory individual account: The accumulated capital is

normally used to purchase a fixed or indexed annuity. In

certain cases, phased withdrawal of the accumulated capital is

permitted.
SSPTW: Europe, 2004 ♦ 73

Estonia

Permanent Disability Benefits

Disability pension

Social insurance disability pension: Based on the old-age

pension and corresponding to the assessed degree of loss of

working capacity.

National pension: The benefit is a percentage of the national

pension rate (913.37 EEK) according to the assessed degree of

loss of working capacity.

Benefit adjustment: The national pension is set by legislation

and adjusted for changes in the cost of living.

Mandatory individual account: No disability benefits are

provided.

Survivor Benefits

Survivor pension

Social insurance survivor pension: Based on the old-age

pension and the number of survivors. One survivor receives

40% of the insured’s pension, two survivors receive 70%, and

three or more survivors receive 100%.

National pension: For one survivor the benefit is 50% of the

national pension rate (913.37 EEK); for two survivors, 80%; for

three or more survivors, 100%.

Benefit adjustment: The national pension is set by legislation

and adjusted for changes in the cost of living.

Funeral grant: 2,000 EEK.

Mandatory individual account: If the insured dies before

retirement, the designated survivor(s) receive the accumulated

value of the individual account. If the insured dies after

retirement, retirement annuity payments normally cease;

thereafter, the designated survivor(s) may receive a guaranteed

periodic benefit for a period of at least 5 years.

Administrative Organization

Social insurance: Ministry of Social Affairs is responsible for

general management and supervision.

National Social Insurance Board is responsible for overall

planning and coordination.

Regional pension offices are responsible for administration at

the local level.

Mandatory individual account: Financial Supervisory

Authority supervises financial services providers, including

pension management companies and life insurance companies.

Registrar of the Estonian Central Register of Securities opens a

pension account for each member. The Registrar maintains an

account in the Bank of Estonia where all contributions are

received from the Tax Board.

Ministry of Finance supervises the Financial Supervisory

Authority and the Registrar of the Estonian Central Register of

Securities.

Sickness and Maternity

Regulatory Framework

First law: 1924.

Current law: 2002.

Type of program: Social insurance system.

Coverage

Cash sickness and maternity benefits: Insured employees,

insured employers, and insured self-employed persons.

Medical benefits: Insured employees, insured employers,

insured self-employed persons, the spouse of an insured

person, persons under age 19, schoolchildren or full-time

students, disabled persons, nonworking persons raising a

child up to age 3, pregnant women from the twelfth week of

pregnancy, social insurance pensioners, persons registered as

unemployed, and military personnel.

Source of Funds

Insured person: None.

Self-employed person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: None.

Qualifying Conditions

Sickness and maternity benefits: Current affiliation to the

Health Insurance Fund regardless of length of service.

Medical benefits: Current affiliation to the Health Insurance

Fund regardless of length of service.

Sickness and Maternity Benefits

Sickness benefit: 80% of the insured’s average income is

paid for each calendar day of hospital treatment or outpatient

care. Benefits are payable from the first day of sickness.

Benefits include providing care at home for a family member

over 12 years of age, 80% of the insured’s average income for

7 calendar days; caring at home for a child under age 3 (up to

age 16 if disabled) if the parent providing the care is ill, 80% for

14 calendar days; caring for a child up to age 12, 100% for

14 calendar days; a work injury caused by an employer and for

health damage, occupational disease, or work injury resulting

from trying to prevent a criminal offense, 100%; and adopting a

child up to age 4, 100% for 70 days.

Maternity benefit: 100% of the insured’s average income is

paid for 140 calendar days. In the case of multiple births or a

birth with complications, the benefit is provided for

156 calendar days.
74 ♦ SSPTW: Europe, 2004

Estonia

Workers’ Medical Benefits

State and local medical institutions provide medical benefits.

Dependents’ Medical Benefits

State and local medical institutions provide medical benefits.

Administrative Organization

Ministry of Social Affairs is responsible for general

management, supervision, and planning.

Health Insurance Fund coordinates health insurance.

Medical benefits are provided by doctors and in polyclinics

and hospitals.

Health Insurance Fund administers benefits.

Work Injury

Regulatory Framework

First law: 1924.

Current law: 1991.

Type of program: Social insurance system.

Coverage

Insured employees and insured self-employed persons.

Source of Funds

Insured person: None.

Self-employed person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: The payment of compensation for employees

with work injuries whose employer is insolvent.

Qualifying Conditions

Work injury benefits: All permanent residents.

Temporary Disability Benefits

100% of average income until the degree of disability has been

assessed.

Permanent Disability Benefits

Based on the old-age pension and corresponding to the

assessed degree of loss of working capacity.

Workers’ Medical Benefits

State and local medical institutions provide medical benefits.

Survivor Benefits

Survivor pension: Based on the old-age pension and the

number of survivors. One survivor receives 40% of the

insured’s pension, two survivors receive 70%, and three or

more survivors receive 100%.

Administrative Organization

Ministry of Social Affairs is responsible for general

management and supervision.

Health Insurance Fund administers health insurance in

counties and towns.

Medical benefits are provided by doctors and in polyclinics

and hospitals.

Regional pension offices administer permanent disability

benefits.

Unemployment

Regulatory Framework

First law: 1991.

Current laws: 2000 and 2002.

Type of program: Social assistance system.

Coverage

Permanent residents aged 16 to retirement age who are capable

of gainful activity.

Source of Funds

Insured person: None.

Employer: None.

Government: Total cost.

Qualifying Conditions

Aged 16 to retirement age, registered as unemployed with the

employment service, and with 180 days of work during the

12 months before unemployment. Work may include full-time

education, military service, raising a child under age 7,

treatment in a hospital, nursing the sick, periods of disability or

detention, and being elderly.

Unemployment Benefits

400 EEK a month for 180 calendar days. The benefit may be

extended for up to 180 days if less than 180 days remain until

the age of retirement. Benefit entitlement may be extended for

up to 90 days if the insured is raising three or more children
SSPTW: Europe, 2004 ♦ 75

Estonia

under age 18, is undertaking vocational training or a

community placement, or if family income is below the poverty

level.

Administrative Organization

Ministry of Social Affairs is responsible for general

management and supervision.

Labor Market Board, with local employment offices, is

responsible for registering the unemployed, administering job

search and retraining, and guaranteeing the payment of

benefits.

Family Allowances

Regulatory Framework

First law: 1922.

Current law: 2002.

Type of program: Social assistance system.

Coverage

Permanent residents, noncitizens with temporary residence

permits, and refugees.

Source of Funds

Insured person: None.

Employer: None.

Government: Total cost.

Qualifying Conditions

Family allowances: All children under age 17; up to age 19 if

a full-time student.

Family Allowance Benefits

Childbirth allowance: The first child receives 25 times the

child allowance rate; each subsequent child, 20 times.

Adoption allowance: A lump-sum allowance is paid to the

foster parent at 20 times the child allowance rate, if the

childbirth allowance was not paid for the same child.

Child allowance: A monthly allowance is paid to families at

twice the child allowance rate for each child.

Child care allowance: A monthly allowance is paid for each

child at 0.5 times the child care allowance rate to one parent

raising one or more children up to age 3; thereafter, 0.25 times

the child care allowance rate for each child between ages 3

and 8.

Single parent’s child allowance: A monthly allowance is paid

for children up to age 16 and for children enrolled in school at

twice the child allowance rate.

Conscript’s child allowance: A monthly allowance is paid for

children of conscripts in the armed forces at five times the child

allowance rate.

Child’s school allowance: An annual allowance is paid for

each child enrolled in school at three times the child allowance

rate.

Foster care allowance: A monthly allowance is paid at six

times the child allowance rate.

Start in independent life allowance: 6,000 EEK is paid to

orphans or persons without parental care who have spent at

least the last 3 years in a children’s home or in a school for the

disabled.

Allowance for families with three or more children and

families raising triplets: An annual allowance equal to the

child allowance rate multiplied by the number of children who

receive child allowance for a family per quarter.

The child allowance rate is 150 EEK.

The child care allowance rate is 1,200 EEK.

Administrative Organization

Ministry of Social Affairs is responsible for general

management and supervision.

National Social Insurance Board coordinates and administers

benefits.

Regional pension offices administer benefits at the local level.
76 ♦ SSPTW: Europe, 2004

Finland

Finland

Exchange rate: US$1.00 equals 0.80 euros (€).

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1937.

Current laws: 1956 (universal pensions); 1961 (earningsrelated pensions); 1969 (survivor pensions), with 1990

amendment to include widowers; and 1986 (partial pension and

early pension), with 1996, 1998, 2000, 2002, and 2003

amendments.

Type of program: Universal and social insurance system.

Coverage

Universal pension (income-tested): All Finnish citizens

residing in Finland after age 16 for at least 3 years as well as

citizens of other countries residing in Finland for 5 years or

more immediately before pensionable age.

Earnings-related pension: All regular employees aged 14 or

older. (From January 1, 2005, persons caring for a child under

age 3 and students who received a degree, for study periods

up to a maximum of 5 years.)

Special systems for seasonal, part-time, maritime, and public

employees; farmers; and the self-employed.

Source of Funds

Insured person

Universal pension: None.

Earnings-related pension: 4.6% of earnings.

The minimum annual earnings for contribution purposes for

employees are €229.34.

There is no ceiling for contribution purposes for employees.

Self-employed person

Universal pension: None.

Earnings-related pension: The self-employed contribute

21.4% of declared earnings (16.05% for the first 4 years of selfemployment). Self-employed farmers contribute on average

10.5% of declared earnings.

The minimum annual earnings for contribution purposes for

the self-employed are €5,504.14. The minimum annual earnings

for contribution purposes for self-employed farmers are

€2,752.04.

Employer

Universal pension: 1.35% to 4.45% of payroll (private

employers, depending on capital of employer); 2.4% of payroll

(municipalities); or 3.95% of payroll (government).

Earnings-related pension: 21.59% for employers with fewer

than 50 employees. For employers with more than

50 employees, 16.9% to 24.0%, according to the age of the

employee. The average contribution is 21.4%.

The minimum annual earnings for contribution purposes are

€229.34.

Government

Universal pension: About 36% (2003) of universal pensions

(about 3/4 of which is borne by local government) and the total

cost of the universal survivor pension.

Earnings-related pension: The total cost of the earningsrelated pension for the self-employed and for farmers not

covered by their own contributions. The total cost of covered

study periods and unpaid periods of child care for persons

caring for a child under age 3.

Qualifying Conditions

Old-age pension

Universal old-age pension (income-tested): Age 65.

Retirement is not necessary. The pension is not payable

abroad after 1 year unless the person was a resident of Finland

for at least 10 years before receiving the pension or is abroad

for medical reasons.

Early pension: Aged 60 to 64. The pension is reduced.

Unemployment pension: Between ages 60 and 64 after

exhausting entitlement for the unemployment basic benefit (at

least 500 days or until age 60) and having worked at least

5 years of the previous 15.

Deferred pension: From age 65.

Earnings-related old-age pension: Aged 65 or older and

retired from covered employment. For a full pension, 40 years’

coverage is necessary. (From January 1, 2005, the retirement

age will be flexible between ages 62 and 68. The pension will

be paid without reduction at age 63.)

Early pension: Aged 60 to 64. The pension is reduced. (From

January 1, 2005, the current early retirement rules will be

abolished. Early retirement will be possible at age 62. The

pension will be reduced.)

Part-time old-age pension (earnings-related pension): Aged 58

to 64 with a reduced work schedule (16 hours to 28 hours per

week and earning between 35% and 70% of full-time earnings),

employed full-time for 12 of the last 18 months, and covered

during at least 5 of the last 15 years.

Unemployment pension: Payable at age 60 after exhausting

entitlement to unemployment benefit (up to the maximum

duration of 500 days) and covered by the scheme for at least 5

of the last 15 years. (From January 1, 2005, the pension will be

abolished for persons born in 1950 or later.)

Deferred pension: From age 65.
SSPTW: Europe, 2004 ♦ 77

Finland

Disability pension

Universal disability pension (income-tested): Permanent

incapacity for suitable work and aged 16 to 64. There is no

partial pension.

Individual early retirement pension: Aged 60 to 64, a special

type of disability pension granted on less stringent medical

criteria than the regular disability pension. (From January 1,

2005, only persons born before 1944 have a right to the

individual early retirement pension.)

Disability allowance: Aged 16 to 64 and payable to

nonpensioners.

Child care allowance: Payable for children under age 16 with a

disability or a long-term illness.

Special assistance for immigrants: Immigrants aged 65 or older

or disabled immigrants aged 16 to 64 are eligible for special

assistance. The special assistance for immigrants also requires

that the person is permanently resident in Finland and has

been resident in Finland for at least 5 years before the benefit

payment starts and is ineligible for a full Finnish national

pension because of insufficient residence.

Earnings-related disability pension: A permanent loss of

working capacity of 60% or more. The pension is payable after

300 days of cash sickness benefits have been exhausted.

Partial pension: A permanent loss of working capacity of

between 40% and 59%.

Rehabilitation benefit: Payable to a disabled employee or a

self-employed person who has a temporary loss of working

capacity of 60% or more (40% to 59% loss for partial disability)

and is undergoing treatment or rehabilitation. (From January 1,

2005, the employee will have a statutory right to vocational

rehabilitation if illness, defect, or injury poses a threat to

working capacity within 5 years.)

Survivor pension

Universal survivor pension (income-tested): The insured was

a Finnish citizen who had lived in Finland after age 16 for at

least 3 years (if not a Finnish citizen, 5 years). The widow(er),

if a Finnish citizen, must have lived in Finland at the date of the

insured’s death or have moved to Finland within 1 year of the

death of the spouse and lived in Finland after age 16 for at

least 3 years (noncitizen must have lived in Finland for 5 years

before the date of death). The initial pension, paid for a 6-

month period, includes a basic amount and a flat-rate

additional amount. The basic amount is stopped unless the

recipient is providing for a child under age 18. The additional

amount of the continuing pension is income tested.

A widow(er) must be under age 65, have been married to the

deceased before age 65, caring for a child under age 18, or, if

childless, be at least age 50 at the time of the spouse’s death;

in addition, the widow(er) must have been married for at least

5 years.

Universal orphan’s pension: Under age 18 (age 20 if a

student) and a resident of Finland or moved to Finland within

1 year of the insured’s death.

Orphan’s supplement (income-tested): Under age 18 (students

aged 18 to 20 are excluded).

Earnings-related survivor pension: The deceased was insured

or a pensioner at the time of death. The widow(er) has a right

to a pension if she or he had a child with the deceased and the

couple were married before the deceased spouse’s 65th

birthday. If childless, the couple must have been married for at

least 5 years and the survivor must have been under age 50 at

time of marriage and now be at least age 50 or a disability

pensioner for at least 3 years when widowed. The pension is

paid to a former spouse if she or he received alimony from the

deceased.

Earnings-related orphan’s pension: Paid to a child under

age 18.

Old-Age Benefits

Old-age pension

Universal old-age pension (income-tested): The pension is

income-tested and varies from €11.21 to €496.38 a month,

according to municipality, marital status, and the value of other

pension income received.

Income test: The benefit is reduced to 50% of the difference

between other pension income and €46.58 a month; the

pension is not payable if other pension income is between

€862.42 and €1,016.92 a month, according to family status and

municipality. The amount is also adjusted for the length of

residence in Finland, with the full amount payable after

40 years of residence; a reduced pension is paid for residence

of less than 40 years.

Early pension: Payable from age 60; the pension is reduced by

4.8% for each year the claim is made before age 65.

Unemployment pension: Payable between ages 60 and 64.

The pension is income-tested and varies from €11.21 to €496.38

a month, according to municipality, marital status, and the

value of other pension income received.

Deferred pension: An increment of 0.6% of the pension for

each month the pension is deferred after age 65.

Child supplement: A flat-rate supplement of €18.41 a month is

paid for a child under age 16.

Housing allowance: The allowance is proportional to income

and housing expenses, up to €495.32 a month, according to

municipality, marital status, and number of family members.

Pensioner care allowance: The allowance is set at €51.79,

€128.93, or €257.84 a month, according to the extent of care

needed.

Benefit adjustment: The universal pension and allowance

supplements are adjusted automatically each year for changes

in the cost-of-living index.

Earnings-related old-age pension: 1.5% of average

pensionable earnings for each year of employment between

ages 23 and 59 and 2.5% for each year between ages 60 and 65;

0.5% for each year before July 1962. (From January 1, 2005, the

pension accrual rate will be 1.5 % per year between ages 18 and
78 ♦ SSPTW: Europe, 2004

Finland

52, 1.9 % per year between ages 53 and 62, and 4.5% for those

aged 63 to 68. The pension will accrue from age 18.)

Pensionable earnings are the average revalued earnings for the

last 10 years. The pension is determined separately for each

employment contract. (From January 1, 2005, the pensionable

earnings will be calculated based on average lifetime earnings.)

Early pension: From age 60. The pension is reduced by 4.8%

for each year claimed before age 65. (From January 1, 2005,

early retirement will be possible at age 62 with a reduction of

0.6% per month, up to a maximum of 7.2%. The accrued oldage pension will be paid at age 63 without reduction.)

Part-time old-age pension (earnings-related): 50% of the

difference between the former full-time income and the parttime income. (From January 1, 2005, for those born in 1947 or

later the old-age pension accrual will decrease when receiving

the part-time pension.)

Unemployment pension: Pension rights are accrued during

years of employment. If the insured has the right to a

projected service (time between the onset of unemployment

and retirement age) component, this will later be added to the

old-age pension or survivor pension.

Deferred pension: An increment of 0.6% for each month of

deferral after age 65. (From January 1, 2005, if retirement is

postponed after age 68, an increment of 0.4% per month will be

granted.)

Benefit adjustment: Earnings-related benefits payable to

pensioners aged 65 or older are adjusted yearly according to

20% of the annual average increase in wage (or 50% if

pensioner is under age 65) and 80% of annual average increase

in price (50% if pensioner is under age 65). (From January 1,

2005, all earnings-related pensions in payment will be adjusted

using an index with a 20:80 weighting of wages to prices.)

Permanent Disability Benefits

Disability pension

Universal disability pension (income-tested): The pension is

income tested and varies from €11.21 to €496.38 a month,

according to municipality, marital status, and the value of other

pension income received.

Individual early retirement pension: The pension is income

tested and varies from €11.21 to €496.38 a month, according to

municipality, marital status, and the value of other pension

income received.

Disability allowance: Aged 16 to 64 and payable to

nonpensioners. The lower rate is €77.32 a month, the higher

rate is €180.34 a month, and the special rate is €335.99 a month.

Child care allowance: Payable for children under age 16 with a

disability or a long-term illness. The lower rate is €77.32 a

month, the higher rate is €180.34 a month, and the special rate

is €335.99 a month.

Special assistance for immigrants: The amount of special

assistance is equal to the full amount of the universal pension.

The amount of the special assistance is affected by the

disposable income of the applicant and his or her spouse, with

the benefit amount decreasing as income increases.

Benefit adjustment: The universal pension and allowances are

adjusted automatically each year for changes in the cost-ofliving index.

Earnings-related disability pension: 1.5% of the wage for each

year of service up to the onset of disability. For projected

service (time between the onset of the disability and retirement

age 65), 1.5% for the period up to age 50, 1.2% for ages 50 to

60, and 0.8% for ages 60 to 65. (From January 1, 2005, the

pension accrual rate will be 1.5 % per year between ages 18 and

52, 1.9 % per year between ages 53 and 62, and 4.5% for those

aged 63 to 68. The pension will accrue from age 18. In

addition, all disability pensions will have the right to projected

service until age 63. The accrual rate for projected service will

be 1.5% of salary per year until age 50 and 1.3% per year

thereafter.)

The maximum pension is 60% of pensionable earnings. (From

January 1, 2005, this limit will be abandoned.)

Partial disability pension: 50% of the full pension, if the

assessed loss of working capacity is between 40% and 59%.

Rehabilitation benefit: Awarded for a treatable disability. The

benefit (the same as for the full or partial disability pension) is

based on the assessed degree of disability, plus a 33%

increment for periods of active vocational rehabilitation

arranged for the applicant by the pension insurance company.

Benefit adjustment: The earnings-related disability pension is

adjusted according to an index that reflects the changes in

prices and wages on an equal basis. (From January 1, 2005, all

earnings-related pensions in payment will be adjusted using an

index with a 20:80 weighting of wages to prices.)

Survivor Benefits

Survivor pension

Universal survivor pension (income-tested): Awarded for the

first 6 months following the spouse’s death. The maximum

basic pension is €347.31 a month, plus a means-tested

supplement up to €234.33 a month and a housing allowance

according to the geographic area. The pension is payable to a

widow(er). From the 7th month, the pension is income tested,

except if the surviving spouse is caring for a dependent child.

The pension is adjusted according to the length of residence

of the deceased.

Orphan’s universal pension: Up to €50.08 a month if under

age 18 (age 20 if a student); up to €100.15 a month for a full

orphan.

Orphan’s supplement (income-tested): Single and full orphan’s

pensions may be increased up to a maximum of €66.90 a month;

the increase is not applicable to a student aged 18 to 20.

Income test: The benefit is reduced to 50% of the difference

between other pension income and €46.58 a month; the

pension is not payable if other pension income is between

€862.42 and €1,016.92 a month, according to family status and
SSPTW: Europe, 2004 ♦ 79

Finland

municipality. The amount is also adjusted for the length of

residence in Finland, with the full amount payable after

40 years of residence; a reduced pension is paid for residence

of less than 40 years.

Benefit adjustment: The universal pension and allowances are

adjusted automatically each year for changes in the cost-ofliving index.

Earnings-related survivor pension: The widow(er) receives up

to 50% of the insured’s pension.

There is no means test for first 6 months if the surviving

spouse is under age 65 and is not receiving a pension in his or

her own right. If the survivor is supporting children, there is

no income test before the youngest child is age 18.

Income test: The old-age pension or disability pension

personally accrued by the surviving spouse (even if not in

payment) reduces the amount of the survivor’s pension.

Orphan’s earnings-related pension: Under age 18. The award

is 1/3 of the insured’s pension for one orphan; up to 5/6 of the

insured’s pension for four orphans or more; the pension is

increased by another 1/6 for a full orphan. The pension must

not exceed the value of the insured’s pension.

Benefit adjustment: Earnings-related benefits payable to

pensioners aged 65 or older are adjusted annually according to

20% of the annual average increase in wages (50% if the

pensioner is under age 65) and 80% of the annual average

increase in prices (50% if the pensioner is under age 65). (From

January 1, 2005, all earnings-related pensions in payment will

be adjusted using an index with a 20:80 weighting of wages to

prices.)

Administrative Organization

Ministry of Social Affairs and Health provides general

supervision of the private-sector statutory pension schemes.

Social Insurance Institution administers universal and

disability pensions through district offices.

A governing body appointed by parliament manages the Social

Insurance Institution.

Local boards determine claims for old-age pensions and

survivor pensions. Disability pension claims are determined

by the central administration.

Municipalities collect the universal pension contributions with

communal (municipal) taxes.

Operating as a tripartite board, the Finnish Centre for Pensions

is the statutory central body of the private-sector earningsrelated pension scheme.

Carriers for earnings-related pension schemes are approved

private insurance companies, pension funds, and foundations.

As of April 1, 1999, the Insurance Supervision Authority

supervises the carriers.

Local Government Pensions Institute, under the general

supervision of the Ministry of the Interior, administers the

pension programs in the public sector.

State Treasury Office, under the general supervision of the

Ministry of Finance, administers pension programs for state

employees.

Sickness and Maternity

Regulatory Framework

First and current law: 1963.

Type of program: Social insurance system. Cash and medical

benefits.

Note: Health care is provided by both a private-sector

sickness insurance program and a public-sector (municipal)

health services program financed primarily by local and

national taxes.

Coverage

Medical benefits: All residents.

Cash benefits: All employees, self-employed persons, and

students aged 16 to 64.

Source of Funds

Insured person: 1.5% of earnings.

Employer: 1.614% of payroll (private-sector employers) or

1.614% to 2.864% of payroll (public-sector employers).

Government: Necessary subsidies.

Qualifying Conditions

Cash sickness benefits: Employment during the last

3 months, unless involuntarily unemployed.

Cash maternity benefits: Resident in Finland; immigrants

must complete a 180-day waiting period.

Medical benefits: Resident in Finland.

Sickness and Maternity Benefits

Sickness benefit: 70% of daily earnings if annual earnings

are €26,720 or less, plus 40% of daily earnings for annual

earnings between €26,721 and €41,110, plus 25% of daily

earnings for annual earnings of €41,110 or more.

The minimum benefit is €2.40 a day. The benefit is payable

after a 10-day waiting period for up to 300 weekdays.

Sickness allowance (means-tested): The allowance is payable

after 55 days of incapacity provided that annual earnings are

less than €1,026. The benefit is €11.45 a day.

Rehabilitation benefit: The benefit is the same as cash

sickness benefit if the insured is receiving medical treatment,

vocational training, or both under a social security

rehabilitation program.

Maternity benefit: 70% of daily earnings if annual earnings

are €26,720 or less, plus 40% of daily earnings for annual

earnings between €26,721 and €41,110, plus 25% of daily
80 ♦ SSPTW: Europe, 2004

Finland

earnings for annual earnings of €41,110 or more. The minimum

benefit is €10 a day.

The benefit is payable to a mother from 50 to 30 days before

the expected date of childbirth for 105 work days.

Special maternity allowance is payable throughout the

pregnancy if the mother is exposed to risk factors that cannot

be eliminated.

Parents allowance: After entitlement to maternity benefit ends,

parents allowance is payable to either parent for 158 weekdays.

The allowance is payable for 60 extra days for multiple births

and from 100 days to 234 days in the case of an adoption.

Special care allowance: The allowance is payable for 60 days a

year to parents caring for a sick child in hospital or at home

(90 days if the child is seriously ill).

Workers’ Medical Benefits

Under the sickness insurance scheme, cash refunds are

provided for certain medical expenses according to a

predetermined schedule. The cash refunds include 60% of

private doctors’ fees and 60% of private dental fees; 75% of

the cost of prescribed examinations and prescribed treatment

over €13.46 is deductible, 50% of the cost of medicines over

€10 (75% to 100% refund for drugs used to treat grave and

prolonged illness priced over €5 is deductible; a full refund if

the annual cost of prescription drugs exceeds €604.72); and

100% of transportation expenses in excess of €9.25 (a full

refund is provided if annual deductible expenses exceed €157).

Sickness insurance also covers 50% of the occupational health

care costs incurred by the employer.

Under municipal health services, a €22 fee is charged for the

first annual visit; subsequent visits are free.

Hospital care is free, except for a €22 fee per outpatient visit, a

€26 fee per inpatient day, and a €72 fee for day surgery.

Dependents’ Medical Benefits

Same as for the family head.

Administrative Organization

Ministry of Social Affairs and Health provides general

supervision.

Sickness insurance: Social Insurance Institution administers

the program nationally.

Social Insurance Institution reimburses employees’ sickness

funds.

Social Insurance Institution reimburses employers providing

medical benefits directly to their own employees.

Public health and hospital services: Provided by

municipalities or the federation of municipalities.

Work Injury

Regulatory Framework

First law: 1895.

Current laws: 1948 and 1981 (farmers).

Type of program: Employer-liability and mandatory insurance

with a private carrier system.

Coverage

Employed persons.

Special systems for farmers and public-sector employees.

Source of Funds

Insured person

General scheme: None.

Farmers’ scheme: 32% of total cost.

Employer

General scheme: 0.4% to 7.5% of payroll, according to the

assessed degree of risk (the average rate is 1%).

Farmers’ scheme: None.

Government

General scheme: None.

Farmers’ scheme: 28% of total cost (40% of the cost is

covered by funds from the general social security scheme).

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

100% of earnings is payable from the day after the accident

occurred (unless the duration of incapacity is less than

3 days), 7 days a week, for up to 12 months. The benefit is

proportionally reduced for partial disabilities of 10% or more.

Permanent Disability Benefits

Permanent disability pension: A basic pension equal to 85%

of earnings for a total disability, up to age 65; thereafter, 70% of

earnings.

Partial disability: The pension is proportionally reduced for

partial disabilities of 10% or more.

Constant-attendance supplement: Up to €23.41 a day.

Hardship allowance: The allowance is payable in cases of

permanent general handicap according to 20 categories of

disability. The value of the allowance varies according to age

and gender.
SSPTW: Europe, 2004 ♦ 81

Finland

Survivor Benefits

Survivor pension: Payable to a widow(er) and orphans.

The maximum survivor pension is 70% of the insured’s

earnings.

Funeral grant: €3,850.

Administrative Organization

Ministry of Social Affairs and Health provides general

supervision.

Federation of Accident Insurance Institutions is the legal

coordinating body for the application of statutory accident

insurance legislation among member companies and for

statistics among member companies.

Insurance is administered by licensed private companies.

Farmers’ insurance is administered through the Farmers’ Social

Insurance Institution.

Public employees’ insurance is administered through the State

Treasury Office.

Unemployment

Regulatory Framework

First laws: 1917 (unemployment insurance) and 1960

(unemployment assistance).

Current law: 2002 (unemployment security).

Type of program: Social assistance and voluntary subsidized

insurance (unemployment fund) system.

Coverage

Basic unemployment and earnings-related unemployment

benefits: Gainfully employed workers and entrepreneurs

aged 17 to 64.

Membership in an earnings-related unemployment fund is

voluntary.

Source of Funds

Insured person

Basic unemployment benefit: None.

Earnings-related unemployment benefit: 0.25% of salary.

Employer

Basic unemployment benefit: None.

Earnings-related unemployment benefit: 0.6% of salary when

the total amount of all salaries is under €840,940 and 2.5%

when the total amount of all salaries is above €840,940.

Government

Basic unemployment benefit: Total cost.

Earnings-related unemployment benefit: A percentage of the

total cost (38.9% in 2002).

Qualifying Conditions

Basic benefit and earnings-related unemployment

benefits: Must have worked at least 43 weeks during the

24 months before unemployment. Entitlement to the basic

benefit or to the earnings-related benefit under the

classification of an entrepreneur depends on work as an

entrepreneur for 24 of the last 48 months.

Unemployment is not due to voluntary leaving, work stoppage,

or the refusal of a suitable job offer.

For entitlement to the earnings-related benefit, the insured

must have been a member of an unemployment fund for at least

10 months.

Unemployment Benefits

Unemployment benefit (basic benefit): €23.16 a day.

Supplement for dependent child(ren): A daily supplement of

€4.39 a day for one child, €6.44 for two, or €8.31 for three or

more children.

Earnings-related benefit (unemployment fund): If monthly

earnings are less than €2,190.65, the benefit is €23.16 a day plus

45% of the daily wage; if monthly earnings are equal to

€2,190.65 or more, the benefit is €56.37 a day plus 20% of daily

earnings in excess of €96.95.

Increased earnings-related benefit (unemployment fund):

The benefit is payable to those who have worked at least

20 years and have been a member of an unemployment fund for

5 years. The increased earnings-related benefit is 55% of the

difference between daily wages and the basic benefit. If the

monthly salary exceeds €2,190.65, the earnings-related benefit

declines to 32.5% for the part in excess.

Supplement for dependent child(ren): A daily supplement of

€4.39 a day for one child, €6.44 for two, or €8.31 for three or

more children.

The maximum benefit, including the child supplement, is 90%

of the insured’s daily wage.

All unemployment benefits are payable after a 7-day waiting

period. The benefit is payable 5 days a week for up to

500 days (if the recipient reaches age 57 before the benefit has

been paid for 500 days, the benefit is payable until the end of

the calendar month in which the recipient reaches age 60).

Administrative Organization

Ministry of Social Affairs and Health supervises

unemployment insurance.

The Social Insurance Institution, through its local offices,

administers the basic benefit program.

The voluntary program is administered by approved

unemployment funds.

At least 8,000 members are required for an unemployment fund

to receive full government support.
82 ♦ SSPTW: Europe, 2004

Finland

Family Allowances

Regulatory Framework

First law: 1948.

Current laws: 1992 and 1996 (child home care allowance).

Type of program: Universal system.

Coverage

All residents with one or more children.

Source of Funds

Insured person: None.

Employer: None.

Government: Total cost. Municipal authorities meet the total

cost of the child home care allowance.

Qualifying Conditions

Family allowances: Child must be under age 17.

Birth grant: Paid to the insured upon the birth of a child.

Child home care allowance: Child must be under age 3.

(Maternity benefits are no longer payable.) One of the parents

must care for the child at home.

Family Allowance Benefits

Family allowances: €1,200 a year for one child, €2,526 for

two, €4,098 for three, €5,916 for four, and €2,064 a year for each

additional child.

Single-parent supplement (or legally separated or unmarried

parent): €439 a year for each qualifying child.

Birth grant: €140, usually paid in kind.

Child home care allowance: A basic amount of €3,027 a year

for one child under age 3 cared for at home; an increase of €600

a year for each additional child under age 7.

Means-tested supplement: Up to a maximum of €135 a month.

Partial home care allowance: €70 a month is payable to a parent

who has reduced his or her working hours to a maximum of

30 hours a week.

Administrative Organization

Ministry of Social Affairs and Health provides general

supervision.

Social Insurance Institution administers the Family Allowance

program on a national basis.
SSPTW: Europe, 2004 ♦ 83

France

France

Exchange rate: US$1.00 equals 0.80 euros (€).

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1910.

Current laws: 1945, 1967, 1971, 1975, 1980, 1982, 1988, 1993,

1994, and 1995.

Type of program: Social insurance system.

Note: A system of mandatory supplementary pensions is

administered on a bipartite basis by employers and employees.

Coverage

Employed persons.

Women receiving certain family benefits, including the singleparent allowance (see Family Allowances, below) and persons

caring for a disabled person are covered for the old-age

pension.

Voluntary affiliation for a nonworking head of household (oldage pension only), nonemployed persons caring for a disabled

family member, and persons employed abroad.

Special systems for agricultural, mining, railroad, public utility,

and public employees; seamen; nonagricultural self-employed;

and agricultural self-employed.

Source of Funds

Insured person: 6.55% of insurable earnings for old-age

benefits, plus 0.1% of total earnings for the survivor allowance.

Employer: 8.2% of insurable earnings for old-age benefits,

plus 1.6% of total payroll.

Government: Variable subsidies.

Disability and survivor pensions are financed under Sickness

and Maternity, below.

The maximum monthly insurable earnings for contribution and

benefit purposes are €2,476.

Qualifying Conditions

Old-age pension: Age 60 with at least one quarter of

insurance coverage. Benefits are payable abroad.

Old-age allowance: Awarded to low-income pensioners at

age 65 (age 60 if disabled). A single pensioner must have

annual income less than €7,223.45; €12,652.36 for a couple.

Old-age supplement: Awarded to low-income single

pensioners at age 65 (age 60 if disabled). A single pensioner

must have annual income less than €7,223.45; €12,652.36 for a

couple. The pensioner must satisfy nationality and residency

conditions.

Old-age special allowance: Awarded to low-income elderly

persons who are ineligible for the old-age pension.

Disability pension: Under age 60 with the loss of at least 2/3

of earning capacity in any occupation. Must have 12 months

of insurance before the onset of the disability and 800 hours of

employment in the last 12 months, including 200 hours in the

last 3 months.

Partial disability pension: The loss in earning capacity is less

than 2/3.

Survivor pension (income-tested): Age 55 or older and

married for 2 years; conditions are waived if there is a child

from the marriage or if the surviving spouse is disabled,

regardless of income. The benefit may also be paid to a

divorced wife who has not remarried.

Income test: The survivor has annual personal income less

than €14,995.20.

Survivor allowance (income-tested): Younger than age 55

and has, or has previously had, a dependent child.

Income test: Personal income is less than €1,947.97 per quarter.

Old-Age Benefits

Old-age pension: Depending on age or the duration of

insurance coverage, 25% to 50% of average salary for the best

25 years (adjusted since 1947) as of January 1, 2008 (if first

receiving the old-age pension between January 1, 2004, and

December 31, 2007, the number of years taken into account will

vary between 11 and 24 depending on the insured’s year of

birth); 50% of adjusted average salary if the insured has

160 quarters of insurance coverage in any scheme as of

January 1, 2003 (between January 1, 1994, and

December 31, 2002, the number of quarters required will vary

between 151 and 159 depending on the insured’s year of birth)

or is disabled, aged 65, a working mother, or a war veteran.

The full pension is awarded for insurance coverage of

150 quarters in the general scheme only. The pension is

proportionately reduced for coverage of less than 150 quarters.

The pension is payable only when employment in the previous

occupation has ceased permanently. Taking another job is

permitted.

The minimum pension is calculated on the basis of a 50% rate

but cannot be less than €6,706.39 a year with 150 quarters of

coverage in the general scheme. The pension is

proportionately reduced for coverage of less than 150 quarters.

The maximum pension is 50% of maximum earnings for

contribution purposes (€14,856 a year).

Constant-attendance allowance: €11,350.44 a year.

Spouse’s supplement (income-tested): €609.80 a year at age 65

(ages 60 to 64 if disabled) if the insured had 150 quarters of

coverage. The pension is proportionately reduced for

coverage of less than 150 quarters.

Child’s supplement: Equal to 10% of the pension if the insured

has raised three children.
84 ♦ SSPTW: Europe, 2004

France

Old-age allowance: Awarded to increase the old-age pension

up to a minimum amount of €2,898.28 a year.

Old-age supplement: €4,154.67 a year for a single pensioner;

€6,855.79 for a married couple.

Old-age special allowance: €2,898.28 a year.

Benefit adjustment: Benefits are adjusted for cost-of-living

changes.

Permanent Disability Benefits

Disability pension: 50% of average earnings in the best paid

10 years if incapable of any professional activity, up to a

maximum of €1,238 a month.

The minimum pension is €241.52 a month.

Constant-attendance supplement: €945.87 a month.

Partial disability pension: 30% of average earnings in the best

paid 10 years, up to a maximum of €742.80 a month.

The minimum pension is €241.52 a month.

Benefit adjustment: Benefits are adjusted for cost-of-living

changes.

Survivor Benefits

Survivor pension (income-tested): Equal to 54% of the

deceased’s pension.

The minimum annual pension is €2,935.60.

Child’s supplement: €996.36 a year.

Benefit adjustment: Benefits are adjusted for cost-of-living

changes.

Survivor allowance (income-tested): €519.46 a month,

payable for up to 2 years following the insured’s death. If the

survivor is at least age 50, the payment is extended until

age 55.

Administrative Organization

Ministry of Labor and Social Affairs provides general

supervision and issues regulations.

National Old-Age Pension Insurance Fund administers old-age

pensions and surviving spouse’s allowances.

National Sickness Insurance Fund administers disability and

survivor pensions.

Contributions are collected by joint collection agencies.

Sickness and Maternity

Regulatory Framework

First law: 1928.

Current laws: 1945, 1967, 1971, 1974, 1978, and 1999.

Type of program: Social insurance system.

Coverage

Employed persons.

Pensioners and some groups of nonemployed persons are also

covered for medical benefits.

Special systems for agricultural, clergy, mining, railroad, public

utility, and public employees; seamen; nonagricultural selfemployed; and agricultural self-employed (medical benefits are

provided under the general system for some groups).

Voluntary affiliation, within the framework of universal sickness

coverage, for all residents not covered by a statutory scheme.

Source of Funds

Insured person: 6.8% of total earnings; old-age pensioners

contribute 1.4% of the old-age pension (low-income

pensioners are exempt) and 2.4% of any private pension; the

unemployed contribute 2% of the guaranteed minimum income

for the unemployed and 1% of unemployment benefits and

training allowances. Students, young persons, and other

groups not covered automatically make flat-rate contributions.

Employer: 12.8% of total payroll.

Government: Proceeds from a 12% surcharge on automobile

insurance premiums plus proceeds from an earmarked tax on

the costs of pharmaceutical advertising, alcohol, and tobacco;

government also provides funds for new hospital construction

and part of the cost for certain health and social services.

All of the above contributions also finance disability and

survivor benefits.

Qualifying Conditions

Sickness benefit: With 200 hours of salaried employment in

the last 3 months, benefit is payable for up to 6 months; with

800 hours of salaried employment in the last 12 months,

including 200 hours in the first 3 months, benefit is payable for

more than 6 months but less than 3 years.

Maternity benefit: Ten months of registration and 200 hours

of salaried employment in the 3 months before the pregnancy.

Medical benefits: Benefits can be paid for up to 1 year if the

insured has 60 hours of salaried employment in the last month,

has paid contributions on wages equal to at least 60 times the

minimum wage in the last month, has 120 hours of salaried

employment in the last 3 months, or has contributions equal to

120 times the minimum wage in the last 3 months. Benefits can

be paid for up to 2 years if the insured has 1,200 hours of

salaried employment in the last year or contributions equal to

2,030 times the minimum wage in the last year.

Sickness and Maternity Benefits

Sickness benefit: For the first 6 months of benefit, 50% of

the daily basis salary (mean salary of the 3 months preceding

the onset of sickness), up to a daily maximum of €41.26; 66.6%

of the daily basis salary from the 31st day onward if the
SSPTW: Europe, 2004 ♦ 85

France

insured has at least three dependent children, up to a daily

maximum of €55.02.

For benefit for more than 6 months, 51.49% of the daily basis

salary from the first day of the seventh month onward, up to

a daily maximum of €42.44; 68.66% of the daily basis salary if

the insured has at least three dependent children, up to a

daily maximum of €56.59.

The benefit is payable after a 3-day waiting period for up to

360 days in a 3-year period.

For chronic or prolonged illness, the period of entitlement is

3 years; the 3-year period can be noncontinuous.

Benefit adjustment: Cash sickness is adjusted according to

changes in wages for entitlement exceeding 3 months.

Maternity benefit: 100% of net earnings is payable for

6 weeks before and 10 weeks after the expected date of

childbirth for the first and second child; for 8 weeks before

and 18 weeks after the expected date of childbirth for the third

child; for 12 weeks before and 22 weeks after the expected

date of childbirth for twins; for 24 weeks before and 22 weeks

after the expected date of childbirth for triplets or more.

The benefit is payable for 2 additional weeks if maternity

hospital care is needed because of complications arising from

the pregnancy, except in cases of multiple births of three or

more.

The maximum benefit is €64.92 a day; in Alsace-Moselle,

€66.29 a day.

Benefits that are paid in cases of adoption correspond to

those paid for the postnatal period.

Benefit adjustment: Maternity benefit is adjusted each year.

Workers’ Medical Benefits

Benefits include general and specialist care, hospitalization,

laboratory services, medicines, dental care, maternity care,

appliances, and transportation. The insured normally pays

for services and is reimbursed by the local sickness fund.

Cost sharing: The cost of medical services is partly

reimbursed. The amount reimbursed depends on the type of

service, for example, 70% for medical services, 60% for

paramedic services, 80% for hospitalization, and 35% or 65%

for pharmaceuticals.

The insured pays a set daily fee for hospital room and board

charges (disabled children, war victims, and work accident

victims are exempt) in addition to the above cost-sharing

arrangements. There is no limit to duration.

Dependents’ Medical Benefits

Same as for insured person except for in-kind benefits.

Following divorce from, or the death of, the insured, medical

benefits are payable for 1 year or until the youngest child’s

third birthday. Protection is unlimited for an eligible person

who has raised three or more children.

Administrative Organization

Ministry of Labor and Social Affairs provides general

supervision.

Governed by a bipartite body, the National Sickness Insurance

Fund coordinates regional funds and financial equalization.

Governed by a bipartite body, Regional Sickness Insurance

Funds coordinate local funds.

Governed by a bipartite body, Primary Sickness Insurance

Funds register the insured, pay cash benefits, and administer

refunds of medical expenses.

Contributions are collected by joint collection agencies.

Work Injury

Regulatory Framework

First law: 1898.

Current laws: 1946, 1967, 1972 (agriculture), and 1994.

Type of program: Social insurance system.

Coverage

Employed persons, vocational education students, and certain

nonpaid members of social service organizations.

Special systems for agricultural, mining, railroad, public utility,

and public employees; seamen; nonagricultural self-employed;

and agricultural self-employed.

Source of Funds

Insured person: None.

Employer: Total cost. Contributions vary according to the

assessed degree of risk. The average contribution is 2.26% of

total payroll.

Government: None.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

During the first 28 days, the benefit is 60% of average daily

earnings of the last month up to a ceiling; thereafter, 80%. The

benefit is payable from the day following the onset of the

incapacity for work until recovery or certification of permanent

disability.

The maximum daily benefit is €148.67 during the first 28 days;

thereafter, €198.23.

Permanent Disability Benefits

Permanent disability pension: 100% of average earnings

during the last 12 months up to a ceiling (base earnings), if

totally disabled.
86 ♦ SSPTW: Europe, 2004

France

The minimum annual base earnings for benefit calculation

purposes are €15,660.57. (There are no minimum earnings if the

assessed level of disability is less than 10%.)

The maximum annual base earnings for benefit calculation

purposes are €31,321.14. One-third of earnings between

€31,321.14 and €125,284.56 are counted.

Constant-attendance supplement: 40% of the pension but no

less than €11,350.44 a year.

Partial disability: 100% of average earnings during the last

12 months (up to a ceiling) multiplied by half the assessed

degree of disability for a disability between 10% and 50%; for a

disability above 50%, the base earnings are multiplied by half

the assessed degree of disability for the portion under 50%

and by 150% of the assessed degree of disability for the

portion above 50%. A lump sum is paid if the assessed degree

of disability is less than or equal to 10%.

Workers’ Medical Benefits

All necessary care, including medical treatment and surgery,

hospitalization, medicines, appliances, rehabilitation, and

transportation. Services are paid for directly by the fund, with

no cost sharing by the patient.

Survivor Benefits

Survivor pension: 40% of the insured’s base earnings. A

supplement is paid for a survivor aged 55 or older or disabled.

The pension is payable to a widow(er).

Orphan’s pension: 25% of the insured’s base earnings for

one child under age 16 (age 17 if unemployed, age 18 if an

apprentice, age 20 if a student or disabled); 50% for two

children; 70% for three children; 85% for four children or more.

Full orphans receive 30% each.

Other dependent relatives: 10% of the insured’s base earnings

each, up to a maximum of 30%.

The total maximum survivor pension must not exceed 85% of

the insured’s base earnings.

Benefit adjustment: Benefits are adjusted annually by decree.

Funeral grant: The cost of the funeral, up to a maximum.

Administrative Organization

Ministry of Labor and Social Affairs provides general

supervision.

National Sickness Insurance Fund administers the program at

the national level.

Primary Sickness Insurance Funds pay benefits.

Regional Sickness Insurance Funds assess contributions and

implement prevention.

Contributions are collected by joint collection agencies.

Unemployment

Regulatory Framework

First law: 1905.

Current laws: 1967 (coverage), 1972 (guaranteed income),

1974 (agriculture), 1984 (social insurance and social

assistance), 1986 (conversion insurance), 1988 (retraining),

1992 (single decreasing allowance), and 1995 (job placement

allowance).

Type of program: Social insurance and social assistance

system.

Coverage

Unemployment insurance: Employed persons.

Exclusions: Public-sector workers with comparable

compensation.

Special systems for construction workers, dockworkers,

merchant seamen, aviators, domestic workers, seasonal

workers, doorkeepers, and disabled personnel in sheltered

workshops.

Unemployment assistance (means-tested): Long-term

unemployed persons who have exhausted unemployment

insurance and certain other designated categories of

unemployed person.

Source of Funds

Insured person: 2% of monthly earnings.

Employer: 3.6% of payroll.

Government: Total cost of social assistance.

The maximum monthly earnings for contribution and benefit

purposes are €9,408.

Qualifying Conditions

Unemployment benefit: Under age 60, or between ages 60

and 65 without the required quarters of coverage to qualify for

a full old-age pension (159 quarters in 2002), and 4 months of

work during the last 18 months. Must be resident in France,

registered at an employment office, and capable of, and

available for, work. Unemployment is not due to voluntary

leaving, misconduct, or the refusal of a suitable job offer.

Solidarity allowance (income-tested): Long-term

unemployed or aged 50 and older and unemployed with 5 years

of employment during the last 10 years before unemployment.

Monthly earnings must not exceed €935.20 for a single person;

€1,469.60 for a couple.

Insertion allowance (income-tested): Awarded to foreign

nationals, victims of accidents at work, those diagnosed with

an occupational illness, refugees, certain groups of

noncitizens, or those in detention immediately prior to

unemployment. Monthly earnings must not exceed €846.90 for

a single person; €1,693.80 for a couple.
SSPTW: Europe, 2004 ♦ 87

France

Preretirement benefit: At least age 59 and 6 months and

receiving unemployment benefit for 365 days. Must have

12 years of contributions and 1 year of uninterrupted

employment, or 2 years of interrupted employment, in the last

5 years, or have 160 quarters of recognized contributions for

the old-age pension as of December 31, 2001.

Unemployed retirement-equivalent allowance (incometested): Awarded to unemployed persons with 160 quarters

of recognized contributions for the old-age pension.

Monthly earnings must not exceed €1,383.84 for a single

person; €1,989.27 for a couple.

Unemployment Benefits

Unemployment benefit: The benefit varies according to the

value of declared previous income between 57.4% and 75.0%

of the daily reference wage. The duration of the benefit

award varies according to age (between 4 months and

30 months for insured persons less than age 50 and between

4 months and 60 months for insured persons aged 50 or

older) and the length of covered employment.

Solidarity allowance (income-tested): A variable amount

renewable every 6 months if the qualifying conditions are still

satisfied. The maximum allowance is €400.80 a month with

additional total supplements of €174.90 under certain

conditions of age and activity. Income from employment is

not excluded under certain conditions for a period of up to

12 months; conditions are waived for those older than age 50.

Insertion allowance (income-tested): The variable

allowance is renewable only once after the initial 6-month

period if qualifying conditions are still satisfied. The

maximum allowance is €282.30 a month. Income from

employment is not excluded under certain conditions for a

period of up to 12 months.

Preretirement benefit: The benefit awarded under the

unemployment benefit is continued until age 60.

Unemployed retirement-equivalent allowance (incometested): A variable allowance awarded until age 60 to replace

the solidarity allowance or the insertion allowance or to

complement the unemployment benefit. The maximum benefit

is €877 a month.

Administrative Organization

Unemployment insurance organizations with bipartite

(management and workers) governing bodies administer

unemployment insurance and pay unemployment insurance

benefits.

Family Allowances

Regulatory Framework

First law: 1932.

Current law: 1946.

Type of program: Universal system.

Coverage

Family allowances: All residents.

Source of Funds

Insured person: None, except for the self-employed and

farmers.

Employer: 5.4% of payroll.

Government: 1.1% of total revenues.

Qualifying Conditions

Family allowances: At least two children under age 20 and

earnings of less than 55% of the legal minimum wage.

Young child benefits

Birth grant (means-tested): Paid at the start of the 7th month

of pregnancy (or for an adoption). The grant is income-tested,

and the benefit varies according to the number of children and

family situation (single parent, double income).

Base allowance (means-tested): Paid from the month of birth

until the child is age 3. The grant is income-tested, and the

benefit varies according to the number of children and family

situation (single parent, double income). The benefit cannot

be paid simultaneously for more than one child, except for

multiple births.

Income supplement for reduced work: Granted to parents who

decide to suspend or reduce work in order to rear a child under

age 3. The parent must have 2 years of activity in the 4 years

prior to the child’s birth for families with two children or in the

last 5 years for families with more than two children. For the

birth of a first child, the beneficiary should have worked during

the 2 years prior to the child’s birth. For the first child, the

parent is awarded a benefit for a maximum of 6 consecutive

months immediately after maternity leave; for the second and

subsequent children, the benefit is paid until the child is age 3.

The benefit can be paid partially or in full.

Supplement for child care: Awarded to children under age 6 if

parents are working and pay for child care by an accredited

carer or home worker.

Parent allowance: Awarded for a maximum of 12 months to a

parent who has fully or partially ceased employment to care for

a seriously sick, injured, or disabled child.

Special education allowance: For children up to age 20 with

at least a 50% disability. The allowance is not means-tested.

Single-parent allowance (means-tested): Guarantees a

minimum family income for a single parent who has at least one

child or is pregnant.

New school year allowance (means-tested): Awarded to

children between ages 6 and 18.

Family supplement (means-tested): Awarded to families

with at least three children over age 3 but younger than age 21.

Housing allowance (means-tested): The claimant is entitled

to one of the family allowance benefits.
88 ♦ SSPTW: Europe, 2004

France

Family Allowance Benefits

Family allowances: €113.15 a month for two children; €258.12

for three children; €403.09 for four children; €548.06 for five

children; €693.03 for six children; €144.97 for each subsequent

child.

A supplement of €31.82 is paid for children over age 11; €56.57

for children over age 16 (except for the first child in a two-child

family).

A flat-rate allowance of €71.95 a month is paid for a maximum of

1 year to families with three children or more entitled to family

allowances, including one child who is age 20 but is younger

than age 21.

Young child benefits

Birth grant (means-tested): €808.

Base allowance (means-tested): €162 a month.

Income supplement for reduced work: The full rate is €340 a

month; €502 if the beneficiary is not entitled to the base

allowance. In case of part-time activity, the benefit is €220 if

the insured person works less than half the normal working

period or €127 if working between 50% and 80% of the normal

working period.

Supplement for child care: The family allowances fund pays

the social security contributions for an accredited carer or 50%

of the social security contributions for a home worker. Social

security contributions are paid on earnings up to a ceiling.

An income-related cash benefit is also directly paid to the

family in order to compensate for child care costs. The benefit

is €354, €253, or €152 (per child in the case of care provided by

an accredited carer or per family if the carer is a home worker)

according to family income level.

Parent allowance: €813.61, €406.82, or €247.86 a month

according to the percentage reduction in working time. A

supplement is paid for single-parent families.

Special education allowance: €113.15 a month. A

supplement varying between €84.86 and €945.87 is paid for care

provided by a third person and/or the amount of additional

expenses incurred by the child’s state of health.

Single-parent allowance (means-tested): The difference

between the beneficiary’s income and the amount of €530.39,

plus an additional €176.80 for each child.

New school year allowance (means-tested): €258.90 per

child.

Family supplement (means-tested): A flat-rate allowance of

€147.27.

Housing allowance (means-tested): A variable amount

depending on rent level, income, and the number of children.

Administrative Organization

Ministry of Labor and Social Affairs provides general

supervision.

Governed by a tripartite body (representatives of employer,

employee, and family organizations), the National Family

Allowances Fund coordinates funds and ensures financial

equalization.

Governed by a tripartite body (representatives of employer,

employee, and family organizations), the Local Family

Allowances Funds pay benefits.
SSPTW: Europe, 2004 ♦ 89

Germany

Germany

Exchange rate: US$1.00 equals 0.80 euros (€).

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1889.

Current law: 2003.

Type of program: Social insurance system.

Note: Following the unification of the Federal Republic of

Germany (FRG) and the German Democratic Republic (GDR) on

October 3, 1990, the social security system of the FRG

remained in force and the system of the GDR continued to

apply on an interim basis within the former GDR territory. The

FRG and GDR systems were merged effective January 1, 1992,

at which time Part VI of the Social Act came into force

throughout the entire federal territory. In the summary that

follows, particular provisions that were in place on January 1,

2004, in the new federal states are preceded by the designation

“E”.

Coverage

Employed persons (including apprentices), certain selfemployed persons, persons caring for a child under age 3,

recipients of social benefits (such as unemployment benefits),

conscripts or persons doing community service instead of

military service, and voluntary care workers.

Voluntary affiliation for all others aged 16 or older who are

currently exempt from compulsory insurance, including German

citizens residing abroad and resident foreigners.

Special systems for certain self-employed persons, miners,

public employees (supplementary insurance), and farmers.

Source of Funds

Insured person: 9.75% of earnings; none if earnings are

below €400 a month; a reduced contribution if monthly

earnings are between €400 and €800.

Self-employed person: 19.5% of income.

Employer: 9.75% of payroll; 12% of earnings for employees

with monthly earnings below €400.

Government: A subsidy to compensate for the cost of

benefits not covered by contributions.

The maximum annual earnings for contribution purposes are

€61,800 (E - €52,200).

Qualifying Conditions

Old-age pension: Age 65 with 5 years of contributions.

Early pension: Retirement is possible from age 63 with 35 years

of coverage; from age 60 with 15 years of contributions and

unemployed for 1 year after age 58 and 6 months or for older

employees in part-time work for at least 24 months before

age 60; from age 60 for women with 10 years of compulsory

contributions after age 40; from age 60 for severely disabled

individuals with a minimum of 35 years of coverage.

Partial retirement is available for pensioners under age 65 with

the partial cessation of employment; if monthly earnings are

less than €345, the full pension is paid; if earnings are above

€345, a partial pension is paid at 2/3, 1/2, or 1/3 depending on

individual earnings.

Deferred pension: A deferred pension is possible after age 65.

Disability pension: The full reduction in earning capacity

(unable to work more than 3 hours a day in any form of

employment) or partial reduction in earning capacity (unable to

work at least 6 hours a day in any form of employment; for

insured persons born before January 2, 1961, unable to work at

least 6 hours a day in his or her former occupation). The

insured must have a total of 5 years of contributions and

36 months of compulsory contributions in the last 5 years.

Survivor pension: The insured had 5 years of contributions

or was a pensioner at the time of death.

Old-Age Benefits

Old-age pension: The total of individual earnings points

(individual annual earnings divided by the average earnings of

all contributors multiplied by the entry factor) multiplied by the

pension factor of 1.0 and the pension value.

From January 1, 2004, to June 30, 2005, the pension value is

€26.13 (E - €22.97). The pension value is calculated as the

monthly benefit amount for 1 year’s average covered earnings,

adjusted for changes in wages.

Periods of incapacity for work, unemployment, and schooling

after age 17 are also taken into account. The normal entry

factor is 1.0 and increases or decreases depending on the age

at which the pension is first taken.

For low-income workers with 35 years of coverage, the value of

compulsory contributions paid before 1991 is increased to

1.5 times the value, up to a maximum of 75% of the value of

contributions for average earnings of all insured persons.

For persons with 25 years of coverage, the value of

compulsory contributions paid after 1992 while caring for a

child under age 10 is increased to 1.5 times the value, up to the

value of contributions for average earnings of all insured

persons.

Early pension: The entry factor (1.0) is reduced by 0.003 for

each calendar month the pension is taken before age 65.

Deferred pension: The entry factor (1.0) is increased by 0.005

for each calendar month a pension is deferred after age 65.

Benefit adjustment: Benefits are to be adjusted on July 1, 2005,

for changes in the pension value in proportion to changes in

earnings and the contribution rate.
90 ♦ SSPTW: Europe, 2004

Germany

Permanent Disability Benefits

Disability pension: The total of individual earnings points

(individual annual earnings divided by the average earnings of

all contributors multiplied by the entry factor) multiplied by the

pension factor and the pension value.

The pension factor for a full reduction in earning capacity is

1.0; for a partial reduction, 0.5.

From January 1, 2004, to June 30, 2005, the pension value is

€26.13 (E - €22.97). The pension value is calculated as the

monthly benefit amount for 1 year’s average covered earnings,

adjusted for changes in wages.

If disability occurs before age 60, the period from the onset of

the reduction in earning capacity up to age 60 is taken fully

into account for the purpose of calculating the pension.

The normal entry factor (1.0) is reduced by 0.003 for every

calendar month a pension is awarded before age 63, up to a

maximum reduction of 0.108.

Benefit adjustment: Benefits are to be adjusted on July 1, 2005,

for changes in the pension value in proportion to changes in

earnings and the contribution rate.

Survivor Benefits

Survivor pension: The total of individual earnings points

(individual annual earnings divided by the average earnings of

all contributors multiplied by the entry factor) multiplied by the

pension factor and the pension value.

The pension factor is 1.0 in the first 3 months, then 0.55 if

age 45, disabled, or caring for at least one child (0.6 if married

before 2002 and one spouse was born before January 2, 1961);

otherwise, 0.25.

From January 1, 2004, to June 30, 2005, the pension value is

€26.13 (E - €22.97). The pension value is calculated as the

monthly benefit amount for 1 year’s average covered earnings,

adjusted for changes in wages.

The pension is payable to a widow(er).

Special rules apply if the insured was recently married.

Orphan’s pension: The pension factor is 0.1 for a half orphan

and 0.2 for a full orphan. Supplements are paid depending on

the insured’s length of coverage period and other factors. The

pension is payable in full if net income is less than a set limit;

for income above the set limit, 40% is offset against the

pension.

Benefit adjustment: Benefits are to be adjusted on July 1, 2005,

for changes in the pension value in proportion to changes in

earnings and the contribution rate.

Administrative Organization

Federal Ministry of Health and Social Security provides

general supervision.

Separate organizations administer benefits for wage earners,

salaried employees, and miners.

Sickness funds normally collect contributions for employees

from employers and forward them to pension insurance

organizations. Other sickness funds (for example, for the selfemployed) pay contributions directly to the organizations.

Sickness and Maternity

Regulatory Framework

First law: 1883.

Current laws: 1924 (maternity benefits); 1988, 2002, and 2003

(sickness insurance); and 1994 (long-term care).

Type of program: Social insurance system.

Coverage

All wage and salary workers earning up to €41,850 a year;

pensioners, students, and persons with disabilities under

certain conditions; and apprentices and beneficiaries of

unemployment benefits.

Voluntary insurance is possible for persons whose compulsory

insurance ends, subject to certain conditions.

Special systems for miners, artists, public-sector employees,

and self-employed farmers.

Long-term care for all persons covered by the statutory

sickness insurance scheme and some special groups subject to

certain conditions. Persons with private sickness insurance

must buy equivalent private coverage for long-term care.

Source of Funds

Sickness and maternity benefits

Insured person: Contributions vary by fund. On average, 7%

of covered earnings. No contribution if monthly earnings are

less than €400; a reduced contribution if monthly earnings are

between €400 and €800. Pensioners contribute 7% of the

pension on average. (Pension insurance organizations pay the

same contribution as, and on behalf of, compulsorily insured

pensioners and a contribution subsidy for voluntarily insured

pensioners.)

Employer: Contributions vary by fund. On average, 7% of

covered earnings; 11% of covered earnings for employees with

monthly earnings less than €400.

Government: Subsidy for maternity benefits and for

pensioned farmers’ and students’ health benefits. The cost of

benefits for unemployed and persons in authorized training.

The maximum annual earnings for benefit and contribution

purposes are €41,850 (adjusted annually to 75% of the pension

contributions ceiling).

Long-term care benefits

Insured person: In one federal state, 1.35% of earnings; in all

other federal states, 0.85% of earnings. Pensioners contribute

on 0.85% of the pension until March 31, 2004; thereafter, 1.7%

of the pension. (Until March 31, 2004, pension insurance
SSPTW: Europe, 2004 ♦ 91

Germany

organizations will pay the same contribution as, and on behalf

of, compulsorily insured pensioners and a contribution

subsidy for voluntarily insured pensioners; thereafter, the

contributions will cease.)

Employer: In one federal state, 0.35% of payroll; in all other

federal states, 0.85% of payroll.

Government: Contributes for unemployed persons and

farmers and for students receiving benefits under the Federal

Education Support Act.

The maximum annual earnings for contribution purposes (longterm care) are €41,850 (adjusted annually to 75% of the pension

contributions ceiling).

Qualifying Conditions

Cash sickness and medical benefits: Membership in a

sickness fund. No minimum membership period is required for

medical benefits.

Cash sickness benefits: Insured persons who are unable to

work or are taking care of a sick child younger than age 12.

Cash maternity benefits: Payable to female sickness fund

members.

Long-term care benefits: Five years of insurance in the last

10 years. The benefit entitlement varies corresponding to a

substantial need for care requiring at least one daily procedure,

a severe need for care requiring procedures three times a day,

or a critical need for care with round-the-clock care required.

Sickness and Maternity Benefits

Sickness benefit: Sickness funds pay 70% of gross earnings

(up to a maximum of 90% of net earnings) for up to 78 weeks in

a 3-year period for the same illness.

If a child is ill, sickness benefit is paid up to 10 working days

per child but no longer than 25 days per insured person in each

calendar year. In single-parent households, the benefit is

payable for 20 working days per child, up to 50 days in a

calendar year.

Maternity benefit: For female sickness fund members with an

employment contract, a benefit equal to 100% of net earnings

(up to €13 a day from the sickness fund with the remainder paid

by the employer) is payable 6 weeks before and 8 weeks after

the expected date of birth; other fund members receive the

same amount as for sickness benefit.

Long-term care allowance: A carer’s allowance is payable to

insured persons who organize care provision for themselves

(for example, care provided by relatives). The allowance is

€205, €410, or €665 a month depending on the degree and

frequency of care required.

The carer’s allowance may be combined with benefits in kind

(see home care benefits under Worker’s Medical Benefits,

below) provided by a professional care worker (the carer’s

allowance decreases in proportion to claimed in-kind benefits).

Social security contributions for carers: Contributions are paid

for old-age pension insurance by long-term care funds on

behalf of unpaid relatives who provide care for at least

14 hours a week for a person needing care at home and who are

not employed for more than 30 hours a week. The paid

contributions depend on the level of care required. Insurance

coverage for work injury is also provided. When care giving

ceases, former carers have the right to a cost-of-living

allowance in order to facilitate their return to employment.

Workers’ Medical Benefits

Benefits are provided to patients by doctors, hospitals, and

pharmacists under contract with sickness funds. Benefits

include comprehensive medical and dental care, preventive

examinations and treatment, laboratory tests, maternity care

with a midwife or doctor, hospitalization, surgery, appliances,

and prescribed medicines.

Cost sharing: A copayment is necessary for certain benefits

(including medicines, appliances, ambulatory care,

hospitalization, and transportation) but not for hardship cases

(depending on means).

Long-term care (home care benefits): Benefits include care

at home and housework provided by professional care workers

or outpatient care services, appliances and technical

assistance (such as home modification), day and night care

(including services partially provided by a care establishment),

short-term institutional care, care at home if the care organized

by the insured person (see long-term care cash benefits,

above) is temporarily unavailable. The maximum benefit

amounts are fixed for the different services.

In-kind benefits for care at home are €384, €921, or €1,432,

depending on the level of care required.

Long-term care (institutional care benefits): The cost of

care services is covered up to maximum amounts. The insured

pays the cost of room and meals.

Dependents’ Medical Benefits

Medical benefits: Same as for the insured person.

Long-term care benefits: Same as for the insured person.

Administrative Organization

Federal Ministry of Health and Social Security provides

general supervision.

Federal Insurance Institute supervises federal health

insurance.

Supervision at state level by designated state authorities.

Sickness funds administer contributions and benefits.

Separate sickness funds are organized within federations at the

national level and, if applicable, at the state level. Day-to-day

administration of funds is handled by a board of directors who

are elected by an administrative council generally consisting of

representatives of insured persons and employers.

Regional physicians’ associations contract annually with

federations of funds for payment for medical services.
92 ♦ SSPTW: Europe, 2004

Germany

The total sum paid by sickness funds to physicians’

associations is apportioned by the latter to participating

doctors.

Federal Ministry of Health and Social Security provides

general supervision of long-term care. Separate funds for longterm care organized by sickness funds and private sickness

insurance funds administer benefits. Federal states pay

construction costs for long-term care institutions.

Work Injury

Regulatory Framework

First laws: 1884 (work accidents) and 1925 (occupational

diseases).

Current law: 1996.

Type of program: Social insurance system.

Coverage

Employed persons; some categories of self-employed person;

voluntarily insured employers; apprentice; students; children

in day care institutions; family helpers in agriculture; persons

engaged in specified voluntary activities, including blood

donors, volunteers, and accident helpers; persons undergoing

rehabilitation in hospitals paid by health or pension insurance;

and any other persons with a status similar to that of an

employee.

Special system for civil servants and public employees.

Source of Funds

Employees: None.

Employer: Contributions vary according to assessed classes

of risk. The average contribution is 1.33% of payroll (2002).

Government: A subsidy to agricultural accident insurance

and for the coverage of students, children in day care

institutions, and persons engaged in specified voluntary

activities.

For insured persons aged 18 or older, the minimum annual

earnings for benefit purposes are €17,388 (E - €14,616).

The maximum annual earnings for benefit purposes vary

depending on the accident insurance fund but are no more

than €84,000.

Qualifying Conditions

Work injury and occupational disease benefits: There is no

minimum qualifying period.

Temporary Disability Benefits

70% of gross earnings (up to a maximum of 90% of net

earnings) for up to 78 weeks, including payment by the

employer. After the termination of the continuous wage

payment (in most cases, 6 weeks), payment is assumed by the

accident insurance fund. The benefit is payable from the day

after the onset of the insured event until recovery or the award

of a pension. A transition benefit is paid during vocational

rehabilitation.

Permanent Disability Benefits

Permanent disability pension: 66.6% of last year’s earnings

if 100% disabled (full pension).

Partial disability: If the assessed loss of earning capacity is

20% or more, a percentage of the full pension in proportion to

the loss of earning capacity.

Severe disability supplement: 10% of the basic pension if the

assessed loss of earning capacity is 50% or more and the

insured is not working and not receiving another pension; if

the insured is unemployed, the pension is further increased for

a maximum of 2 years.

Constant-attendance allowance: €295 to €1,180 a month (E -

€256 to €1.023).

Workers’ Medical Benefits

Benefits include comprehensive medical care; medical,

occupational, and social rehabilitation; appliances; and help

with housework. The benefits are provided exclusively by

accident funds.

(Agricultural accident insurance covers the provision of

assistance to guarantee vital farming operations.)

Survivor Benefits

Survivor pension: During the first 3 calendar months, 66.6%

of the insured’s earnings; thereafter, 40% of the insured’s

earnings if aged 45 or older, disabled, or caring for at least one

child. Other eligible survivors receive a reduced survivor

pension of 30% of the insured’s earnings. The payment of the

reduced survivor pension is limited to 2 years if the survivor is

younger than age 40. The pension is payable to a widow(er).

Orphan’s pension: 20% of the insured’s earnings for each

orphan under age 18 (under age 27 if a student); 30% for a full

orphan.

Earnings test: Earnings over a certain limit are offset in the

case of beneficiaries over age 18.

Other eligible survivors (means-tested): Parents and

grandparents receive 20% of the insured’s earnings as single

beneficiaries; 30% if a couple.

Former spouses (if eligible) may receive a survivor pension.

The amount is split between the surviving spouse and the

former spouse according to the length of marriage.

The maximum survivor pension is 80% of the insured’s

earnings.

Death grant: €4,140 (E - €3,480).
SSPTW: Europe, 2004 ♦ 93

Germany

Administrative Organization

Federal Ministry of Economics and Labor supervises accident

prevention and primary care.

Federal Insurance Institute or relevant state authorities

supervise other areas.

Accident insurance funds (nonagricultural, agricultural, public

authorities) administer the scheme. Accident insurance funds

operate under bipartite management involving elected

representatives of employers and the insured.

Unemployment

Regulatory Framework

First law: 1927.

Current law: 2002.

Type of program: Social insurance system.

Coverage

Employed persons, including home workers, apprentices, and

trainees. Under certain conditions, other groups (including

participants in occupational training schemes) are also

covered.

Exclusions: Persons engaged in negligible employment (minijobs).

Source of Funds

Insured person: 3.25% of covered earnings.

Employer: 3.25% of covered earnings.

Government: Loans or subsidies to cover any deficit; also

covers cost of unemployment assistance.

The maximum annual earnings for contribution purposes are

€61,800.

Qualifying Conditions

Unemployment benefit: 360 days of insured employment in

last 3 years (180 days for seasonal workers). Personally

registered at an employment office and capable of, available

for, and actively seeking employment.

Unemployment assistance (means-tested): Based on need,

payable to workers with 150 days of employment in the last

year or who have exhausted their statutory unemployment

benefit. Personally registered at an employment office and

capable of, available for, and actively seeking employment.

In certain cases, the right to unemployment benefit or

assistance can be suspended (for up to 12 weeks).

Unemployment Benefits

Unemployment benefit: 67% of net earnings for unemployed

persons with children; 60% if without children. The benefit is

payable for 90 to 960 calendar days, according to the length of

insured employment and age.

Unemployment assistance (means-tested): 57% of net

earnings for unemployed persons with children; 53% if without

children. There is no limit to duration.

Short-time work benefit: Paid to workers who lose working

hours for short periods, in particular for economic reasons.

Bad weather allowance: Paid to construction workers whose

work is halted because of bad weather. The allowance is

payable after the 100th hour of stoppage between November 1

and March 31 of any year.

Cost-of-living allowance: Paid to participants in occupational

training, retraining, and rehabilitation.

Administrative Organization

Federal Ministry of Economics and Labor supervises the

program.

Local employment offices are responsible for employment

placements, career guidance, and the administration of

benefits.

Sickness funds collect contributions.

Family Allowances

Regulatory Framework

First law: 1954.

Current law: 2002.

Type of program: Universal system.

Coverage

Parents with one or more children.

Full orphans and children who have lost contact with their

parents.

Source of Funds

Insured person: None.

Employer: None.

Government: Total cost.

Qualifying Conditions

Child benefit: Child must be under age 18 (under age 21 if

unemployed; under age 27 if in education, if no apprenticeship

is available, or if in voluntary work; no limit if disabled). For

children older than age 18, the amount of child benefit depends

on their income.

Family Allowance Benefits

Child benefit: €154 a month for the first, second, and third

child; €179 for each subsequent child. (Lower rates may be
94 ♦ SSPTW: Europe, 2004

Germany

paid if the children of workers employed in Germany reside in

countries where the cost of living is lower.) If a child

supplement from a statutory work accident or pension program

is also paid, only the portion of the child benefit higher than

the supplement is payable.

Administrative Organization

Federal Finance Office (Family Fund) administers benefits

through regional and local labor offices of the Federal Agency

for Labor.

Benefits for public employees are administered through salary

payment offices.

Administrative costs are reimbursed by the federal

government.
SSPTW: Europe, 2004 ♦ 95

Greece

Greece

Exchange rate: US$1.00 equals 0.80 euros (€).

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1934.

Current laws: 1951, 1981 (special noncontributory old-age

pension), 1990, 1992, 1996, 1999, 2000, and 2002.

Type of program: Social insurance system.

Coverage

Employees in industry, commerce and related occupations, and

certain urban self-employed workers.

Exclusions: Employees affiliated with approved occupational

and establishment funds providing equivalent benefits.

Voluntary coverage for Greeks living abroad.

Special systems for agricultural workers, public employees,

tradesmen, and craftsmen.

Source of Funds

Insured person: 6.67% of earnings; 8.87% if in arduous or

unhealthy employment.

Employer: 13.33% of payroll; 14.73% if in arduous or

unhealthy employment.

Government: 10% of payroll.

The maximum earnings for contribution and benefit purposes

are €78.41 a day or €1,960.25 a month. (There is no ceiling for

persons who were first insured after January 1, 1993.)

Qualifying Conditions

Old-age pension: Age 65 (men) or age 60 (women) with

4,500 days of contributions. Age 62 (men) or age 57 (women)

with 10,000 days of contributions. Age 58 (men and women)

with 10,500 days of contributions. The full pension is also

payable at any age to insured persons with 11,100 days of

contributions and to insured persons with specified disabilities

with 4,050 days of contributions.

Age 60 (men) or age 55 (women) with 4,500 days of

contributions of which at least 3,600 days were in arduous or

unhealthy employment, including at least 1,000 days in the last

10 years. Age 58 (men) or age 53 (women) with 4,500 days of

contributions of which at least 3,600 days were in the

construction or technical sector, including at least 1,000 days

in the last 10 years. Age 58 (men) or age 53 (women) with

4,500 days of contributions in the construction or technical

sector, including at least 500 days in the last 10 years. Age 55

(men and women) with 10,500 days of contributions, including

at least 7,500 days in arduous or unhealthy employment.

Age 55 (women with dependent or disabled children) with

5,500 days of contributions.

Early pension: Age 60 (men) or age 55 (women) with

4,500 days of contributions.

The pension is suspended if the pensioner is younger than

age 55 and working.

Pensions are payable abroad under reciprocal agreement.

Pensioners’ social solidarity grant (old age): Age 60 or

older. Overall net income from salaries and pensions must not

exceed €6,340.89; total personal taxable income must not

exceed €7,397.72; and total annual family taxable income must

not exceed €11,511.75.

Disability pension: For the full pension, the insured must be

at least 80% disabled with a maximum of 4,500 days of

contributions (1,500 days if the insured began working after

1993); 300 days if younger than age 21 (from age 21, the

number of required contribution days increases with age up to

the maximum); or 1,500 contribution days, including 600 in the

5 years before the onset of disability. (For insured persons

who began working after 1993, the contribution days in the 5

years before the onset of disability can include credited

contribution days.)

Partial disability: The insured must be at least 50% disabled.

The Health Committee of the Social Insurance Institute

assesses the degree of disability.

Pensioners’ social solidarity grant (disability): There is no

age requirement. Overall net income from salaries and

pensions must not exceed €6,340.89; total personal taxable

income must not exceed €7,397.72; and total annual family

taxable income must not exceed €11,511.75.

Survivor pension: The qualifying conditions for the survivor

pension vary according to the date the deceased entered the

system. Normally, the number of contribution days is half that

required for the disability pension (see above).

For persons insured before 1993, eligible survivors include a

widow (or a disabled widower without means) whose marriage

lasted at least 6 months (2 years if the spouse of a pensioner);

dependent children under age 18 (age 24 if a student, disabled,

or a full orphan); dependent grandchildren and stepchildren;

and dependent parents.

For persons insured from January 1, 1993, eligible survivors

include a widow(er) whose marriage lasted at least 1 year

(2 years if the spouse of a pensioner; the marriage condition is

waived if the spouse has a dependent child); and dependent

children under age 18 (age 24 if a student, disabled, or a full

orphan).

The following changes, effective January 5, 1999, cover all

insured persons regardless of when the insured entered the

system: The surviving spouse, irrespective of age, is entitled

to the survivor pension for a period of 3 years beginning the

month following the insured’s death. Survivors older than

age 40 when their spouse dies may receive benefits beyond

3 years provided they do not work or receive any other
96 ♦ SSPTW: Europe, 2004

Greece

pension or are assessed with a mental or physical disability of

at least 67%. Survivor pensions that have been interrupted or

reduced will be paid in full when the survivor reaches age 65.

Pensioners’ social solidarity grant (survivors): Age 60 or

older. Overall net income from salaries and pensions must not

exceed €6,340.89; total personal taxable income must not

exceed €7,397.72; and total annual family taxable income must

not exceed €11,511.75.

Old-Age Benefits

Old-age pension: The basic pension is based on the length of

the insurance period and pensionable earnings in the last

5 years. The basic pension is increased according to the

classification of the insured in one of 28 wage classes. The

increase is calculated as 1% of earnings for every 300 days of

contributions between 3,300 days and 7,800 days and 1.5% to

2.5% (depending on wage class) for every 300 days beyond

7,800 days. (For persons who started working after 1993, the

pension is calculated as 2% of adjusted average earnings

during the last 5 years.)

Early pension: The pension is reduced by 1/267th for each

month of early retirement.

The minimum pension for a single person is €392.16 a month;

€421.01, with a spouse; €439.74, with a spouse and one child;

€458.24, with a spouse and two children; €476.80, with a

spouse and three children; €411.53, with one child; €430.45,

with two children; or €448.99 with three children.

The maximum pension is €2,966.

Schedule of payments: Fourteen payments a year.

Earnings-test: The pension is reduced by 70% if the

beneficiary is age 55 or older, without dependents, and

earnings more than €733.78 from employment; a supplement

equal to 20% of the pension is paid for each child under age 18

(aged 18 to 24 if a student, no limit if disabled).

Benefit adjustment: Pensions are indexed to the pensions of

civil servants.

Pensioners’ social solidarity grant (old age): €111.18 a

month with net income up to €5,774.74; €83.39 a month with net

income from €5,774.75 to €6,001.22; €55.59 a month with net

income from €6,001.23 to €6,152.17; €27.80 a month with net

income from €6,152.18 to €6,340.89.

Permanent Disability Benefits

Disability pension: The basic pension is based on the length

of the insurance period and pensionable earnings in the last

5 years. The basic pension is increased according to the

classification of the insured in one of 28 wage classes. The

increase is calculated as 1% of earnings for every 300 days of

contributions between 3,300 days and 7,800 days and 1.5% to

2.5% (depending on wage class) for every 300 days beyond

7,800 days. (For persons who started working after 1993, the

pension is calculated as 2% of adjusted average earnings

during the last 5 years.)

Entitlement to the pension begins when the cash sickness

benefit ends. For an assessed degree of disability of 80% or

more (severe), 100% of the pension is paid; for an assessed

degree of disability of 67% to 79.9% (ordinary), 75% of the

pension is paid.

Partial disability: For an assessed degree of disability of 50%

to 66.9%, 50% of the pension is paid.

The minimum pension is €392.16 a month, plus supplements for

a dependent spouse and children.

Schedule of payments: Fourteen payments a year.

Pensioners’ social solidarity grant (disability): €111.18 a

month with net income up to €5,774.74; €83.39 a month with net

income from €5,774.75 to €6,001.22; €55.59 a month with net

income from €6,001.23 to €6,152.17; €27.80 a month with net

income from €6,152.18 to €6,340.89.

Survivor Benefits

Survivor pension: The survivor pension varies according to

the date the deceased entered the system. The surviving

spouse, irrespective of age, is entitled to the survivor’s

pension for a period of 3 years beginning the month following

the insured’s death. A surviving spouse who is younger than

age 40 when his or her spouse dies receives the full pension

provided that they do not work or receive any other pension;

70% of the insured’s pension is paid if the spouse is working

or receiving a pension. Survivors aged 40 or older when their

spouse dies may receive benefits beyond 3 years; 50% of the

insured’s pension is paid if the spouse is working or receiving

a pension; 70% if working or receiving a pension after age 65;

the full pension is paid if the survivor has an assessed degree

of disability of 67% or greater.

Orphan’s pension: 20% of the insured’s basic pension if

under age 18 (age 24 if a student, no limit if disabled).

Grandchild or parent (in absence of above): 20% of the

insured’s pension; 40% if a widowed mother.

The minimum survivor pension is €352.93 a month.

The maximum survivor pension is 100% of the insured’s

pension.

Schedule of payments: Fourteen payments a year.

Pensioners’ social solidarity grant (survivors): €111.18 a

month with net income up to €5,774.74; €83.39 a month with net

income from €5,774.75 to €6,001.22; €55.59 a month with net

income from €6,001.23 to €6,152.17; €27.80 a month with net

income from €6,152.18 to €6,340.89.

Administrative Organization

Ministry of Labor and Social Security provides general

supervision.

Managed by a governor and tripartite governing body, the

Social Insurance Institute administers the program through

branch offices for most covered workers.
SSPTW: Europe, 2004 ♦ 97

Greece

Numerous special occupational and establishment funds

administer programs for workers exempt from the general

system.

Sickness and Maternity

Regulatory Framework

First law: 1922.

Current laws: 1951 and 1984 (national health service).

Type of program: Social insurance system.

Coverage

Employees in industry, commerce and related occupations, and

certain urban self-employed workers. Pensioners are covered

for medical benefits.

Exclusions: Employees affiliated with approved occupational

and establishment funds with equivalent benefits.

Special systems operate for agricultural workers

(noncontributory old-age pensioners are covered for medical

benefits) and public employees.

Source of Funds

Insured person: 0.4% of earnings (cash benefits) and 2.15%

of earnings (medical benefits). Pensioners contribute 4% of

the pension.

Employer: 0.8% of payroll (cash benefits) and 4.3% of payroll

(medical benefits).

Government: Subsidy to cover any deficit.

The maximum monthly earnings for contribution and benefit

purposes are €1,960.25. (There is no earnings ceiling for those

who start working after January 1, 1993.)

Qualifying Conditions

Cash sickness benefit: At least 100 days of contributions in

the calendar year preceding illness or 100 days of

contributions in the last 15 months excluding the last quarter.

The benefit is payable for 182 days to 720 days, according to

the length of the contribution period.

Cash maternity benefit: Insured women must have 200 days

of contributions in the last 2 years.

Medical benefits: Has 50 days of contributions in the last

year or last 15 months (excluding the last quarter) or is a

pensioner.

Maternity medical benefits: Insured women and the

dependent wife of an insured man or pensioner.

Sickness and Maternity Benefits

Sickness benefit: 50% of daily earnings, according to one of

28 insurance classes. (If the insured has worked for the

employer for at least 1 year, the employer must pay the

difference between the cash benefit and the employee’s

earnings for 1 month; if the employment period is less than

1 year, the employer pays the difference for 2 weeks.)

Dependent supplement: 10% of the benefit for each

dependent.

The maximum daily benefit, including dependent supplements,

for the first 15 days must not exceed €12.89; from the 16th day

to the 30th day, €23.69; after the 30th day, the maximum must

not exceed 70% of the daily wage of the insurance class in

which the worker is classified.

If the insured is hospitalized and there are no dependents, the

benefit is paid at 33% of the awarded rate.

Funeral grant: A lump sum of €612.08.

Maternity benefit: 50% of earnings, plus 10% of benefit for

each of the first four dependents. The benefit is payable for up

to 56 days before and 63 days after childbirth.

The minimum benefit is €8.91 a day.

Birth grant: €698.70 for each child.

Workers’ Medical Benefits

Medical services are ordinarily provided directly to patients

through the facilities of the Social Insurance Institute. Benefits

include general and specialist care; care in a hospital,

sanatorium, or nursing home; medicines; maternity care; dental

care; appliances; and transportation.

Cost sharing: The insured pays 25% of pharmaceutical costs

and up to 25% of the cost of other services (including

prostheses and eyeglasses) except for hospitalization. Social

solidarity grant pensioners and their dependents pay 10% of

costs.

There is no limit to duration.

Dependents’ Medical Benefits

Same as for the insured worker.

Administrative Organization

Ministry of Labor and Social Security provides general

supervision.

Managed by a governor and tripartite governing body, the

Social Insurance Institute administers the program through

branch offices for most covered workers.

Institute operates own dispensaries, clinics, and hospitals and

also uses other public and private facilities.

Numerous special occupational and establishment funds

administer programs for workers exempt from the general

system.
98 ♦ SSPTW: Europe, 2004

Greece

Work Injury

Regulatory Framework

First law: 1914.

Current law: 1951.

Type of program: Social insurance system.

Coverage

Employees in industry, commerce, and related occupations are

covered.

Exclusions: Employees affiliated with approved occupational

and establishment funds with equivalent benefits.

Source of Funds

Insured person: None.

Employer: 1% of payroll.

Government: None.

Qualifying Conditions

Work injury benefits

Work injury: Benefit is payable after a 1-day waiting period.

Occupational disease: The minimum qualifying period is set

by law for each specified occupational disease. In certain

cases, eligibility is determined by the Health Commission of the

Social Insurance Institute.

Temporary Disability Benefits

50% of daily earnings, according to one of 28 insurance

classes. (If the insured has worked for the employer for at least

1 year, the employer must pay the difference between the cash

benefit and the employee’s earnings for 1 month; if the

employment period is less than 1 year, the employer pays the

difference for 2 weeks.)

Dependent supplement: 10% of the benefit for each

dependent.

The maximum daily benefit, including dependent supplements,

for the first 15 days must not exceed €12.89; from the 16th day

to the 30th day, €23.69; after the 30th day, the maximum must

not exceed 70% of the daily wage of the insurance class in

which the worker is classified.

If the insured is hospitalized and there are no dependents, the

benefit is paid at 33% of the awarded rate.

Permanent Disability Benefits

Permanent disability pension: For an assessed degree of

disability of 80% or over (severe), 100% of the pension is paid;

for an assessed degree of disability of 67% to 79.9% (ordinary),

75% of the pension is paid.

Partial disability: For an assessed degree of disability of 50%

to 66.9%, 50% of the pension is paid.

The minimum pension is €392.16 a month, plus supplements for

a dependent spouse and children.

Schedule of payments: Fourteen payments a year.

Pensioners’ social solidarity grant (disability): €111.18 a

month with net income up to €5,774.74; €83.39 a month with net

income from €5,774.75 to €6,001.22; €55.59 a month with net

income from €6,001.23 to €6,152.17; €27.80 a month with net

income from €6,152.18 to €6,340.89.

Workers’ Medical Benefits

Medical services are ordinarily provided directly to patients

through the facilities of the Social Insurance Institute. Benefits

include general and specialist care; care in a hospital,

sanatorium, or nursing home; medicines; maternity care; dental

care; appliances; and transportation.

There is no cost sharing.

There is no limit to duration.

Survivor Benefits

Survivor pension: The survivor pension varies according to

the date the deceased entered the system. The surviving

spouse, irrespective of age, is entitled to the survivor’s

pension for a period of 3 years beginning the month following

the insured’s death. A surviving spouse who is younger than

age 40 when his or her spouse dies receives the full pension

provided that they do not work or receive any other pension;

70% of the insured’s pension is paid if the spouse is working

or receiving a pension. Survivors aged 40 or older when their

spouse dies may receive benefits beyond 3 years; 50% of the

insured’s pension is paid if the spouse is working or receiving

a pension; 70% if working or receiving a pension after age 65;

the full pension is paid if the survivor has an assessed degree

of disability of 67% or greater.

Orphan’s pension: 20% of the insured’s basic pension if

under age 18 (age 24 if a student, no limit if disabled).

Grandchild or parent (in absence of above): 20% of the

insured’s pension; 40% if a widowed mother.

The minimum survivor pension is €352.93 a month.

The maximum survivor pension is 100% of the insured’s

pension.

Schedule of payments: Fourteen payments a year.

Pensioners’ social solidarity grant (survivors): €111.18 a

month with net income up to €5,774.74; €83.39 a month with net

income from €5,774.75 to €6,001.22; €55.59 a month with net

income from €6,001.23 to €6,152.17; €27.80 a month with net

income from €6,152.18 to €6,340.89.

Administrative Organization

Ministry of Labor and Social Security provides general

supervision.

Social Insurance Institute administers the program through

branch offices for most covered workers.
SSPTW: Europe, 2004 ♦ 99

Greece

Numerous special occupational and establishment funds

administer programs for workers exempt from the general

system.

Unemployment

Regulatory Framework

First law: 1954.

Current laws: 1985, 1989, and 1990.

Type of program: Social insurance system.

Coverage

Employees in industry, commerce, and related occupations.

Exclusions: Self-employed persons.

Special systems for seamen and printing workers.

Source of Funds

Insured person: 1.33% of earnings.

Employer: 3.67% of payroll.

Government: None.

Qualifying Conditions

Unemployment benefit: 125 days of contributions in the last

14 months, excluding working days in the last 2 months;

200 days in the last 2 years, excluding working days in the last

2 months (for a first-time beneficiary, also 80 days in each of

the last 2 years). The insured must be capable of, and available

for, work and registered at an employment office.

Unemployment must be involuntary. The insured must be

younger than age 65 and not receiving a disability pension.

Young persons’ benefit: Aged 20 to 29 and has never worked.

Special unemployment benefit (means-tested): Awarded in

cases in which the person does not qualify for unemployment

benefit or where entitlement is exhausted.

Special seasonal allowance: Paid to workers in seasonal

employment (including builders, tobacco workers, and actors)

who worked during the preceding year.

Unemployment Benefits

40% of wages (blue-collar workers) or 50% of salary (whitecollar workers). The benefit is payable after a 6-day waiting

period. The duration of entitlement, up to a maximum of 1 year,

depends on the length of the contribution period.

The minimum benefit is 66.6% of the daily minimum wage.

Dependents’ allowance: 10% of earnings for each dependent.

Young persons’ benefit: Payable for 5 months at the singleperson rate, plus a supplement for each child.

Special unemployment benefit (means-tested): A lump sum

is payable.

Special seasonal allowance: Paid once a year, the lump sum

varies according to the nature of employment of the entitled

person.

Administrative Organization

Ministry of Labor provides general supervision.

Managed by a tripartite board, the Manpower Employment

Organization administers benefits and employment services

through local employment offices.

Social Insurance Institute collects contributions.

Family Allowances

Regulatory Framework

First and current law: 1958.

Type of program: Employment-related system.

Coverage

Employees in industry, commerce, and related occupations,

with one or more children.

Exclusions: Employees receiving equivalent allowances from

their employer.

Source of Funds

Insured person: 1% of earnings.

Employer: 1% of payroll.

Government: None.

Qualifying Conditions

Family allowances: The child must be under age 18 (no limit

if disabled, age 22 if a student), single, and living in Greece or

another EU member country. For full allowances, the parent

must have had 50 days of employment in the preceding year.

Family Allowance Benefits

Family allowances: The allowance for one child is €5.87 a

month; two children, €18 a month; three children, €40 a month;

four children, €48 a month; and for each additional child, €8.07

a month. An additional €3.67 a month for each child may be

paid to widows, widowers, and soldiers.

Administrative Organization

Ministry of Labor provides general supervision.

Managed by a tripartite board, the Manpower Employment

Organization administers allowances through local offices.

Social Insurance Institute collects contributions.
100 ♦ SSPTW: Europe, 2004

Guernsey

Guernsey

Exchange rate: US$1.00 equals 0.56 pounds (£).

Old Age, Disability, and Survivors

Regulatory Framework

First laws: 1925 (old-age) and 1935 (old-age and survivors).

Current laws: 1971 (social assistance), 1978 (social

insurance), 1984 (attendance allowance), and 2002 (long-term

care).

Type of program: Social insurance and social assistance

system.

Coverage

Old-age pension: All persons over school-leaving age.

Voluntary coverage for nonemployed persons under age 20,

married women, and widows who were covered by their

husband’s insurance.

Long-term care: All residents.

Disability pension (invalidity benefit): All employed and selfemployed persons.

Voluntary coverage for married women and widows.

Disability attendance allowances: All residents.

Social assistance: All residents.

Source of Funds

Insured person: 6% of earnings up to a maximum weekly

earning level of £621.

Self-employed person: 10.5% of earnings (nonemployed

persons may contribute 9.9% of annual income) up to a

maximum annual earnings level of £32,292. (Contributions do

not cover unemployment benefits.)

Employer: 5.5% of earnings up to a maximum weekly earnings

level of £621.

Government: A grant equal to 50% of total contribution

receipts. The total cost of social assistance and other

noncontributory benefits.

All the above contributions also finance sickness and

maternity benefits, work injury benefits, unemployment

benefits (except for the self-employed), prescription medicines,

long-term care, and some medical services.

Qualifying Conditions

Old-age pension: Age 65 (men and women) with a minimum of

156 contributions paid between the later of 1952 or the date

that insurance coverage first began and age 65. The full-rate

pension is calculated as the yearly average of 50 contributions

paid or credited.

Partial pension: The pension is proportionately reduced for a

yearly average of less than 50 contributions paid or credited.

No pension is payable if the yearly average is less than 10.

The pension is payable worldwide.

Disability pension (invalidity benefit): Incapacity for work

following entitlement to sickness benefits for 6 months. A

minimum of 26 contributions paid since the date that insurance

coverage first began. The full benefit is payable if

50 contributions are paid or credited in the relevant

contribution year.

Partial pension: The benefit is proportionately reduced for

fewer than 50 paid or credited contributions in the relevant

contribution year. No benefit is payable if there are fewer

than 26 contributions.

Long-term care: The insured has been resident in Guernsey

for 5 years at any time and 1 year immediately prior to receiving

long-term care benefit.

Attendance allowance: The person was born in Guernsey or

has been resident in Guernsey for 5 years. The

noncontributory benefit is paid after 3 months of severe

disability (except if terminally ill). The maximum allowable

income is £63,000 a year.

Invalid care allowance: The noncontributory benefit is paid

to a person caring for a severely disabled person for 35 hours

or more a week and earning less than £87 a week from

employment. The maximum allowable income is £63,000 a year.

Widowed parent’s allowance: Payable to a widow(er) with at

least one dependent child.

Bereavement payment: The grant is paid to a surviving

spouse on the basis of the insurance record of the deceased.

Bereavement allowance: Payable to a surviving spouse

older than age 45 who has no dependent children.

Death grant: A minimum of 26 contributions paid or credited

between the later of 1971 or the date that insurance coverage

first began and the date of death. A full grant award is made if

45 contributions are paid or credited in the relevant

contribution year. The grant is proportionately reduced for

fewer than 45 contributions. No grant is paid if there are fewer

than 10 contributions.

Supplementary benefit (social assistance): Noncontributory means-tested benefit for persons older than age 60,

persons who are incapacitated or disabled, persons caring for a

member of the family, or a single parent.

Old-Age Benefits

Old-age pension: The full-rate benefit for the insured person

is £130 a week.

Dependent supplement: A weekly supplement of £70 is

payable for a dependent adult, and a weekly supplement of £9

is payable for each dependent child.

Death grant: The grant is payable in the case of the death of

the insured, spouse, child, or survivor. The full grant is £385.
SSPTW: Europe, 2004 ♦ 101

Guernsey

Supplementary benefit (social assistance): The benefit is

paid according to need but is subject to a maximum of £263 a

week.

Permanent Disability Benefits

Disability pension (invalidity benefit): The full-rate benefit is

£120 a week.

Long-term care: Up to £290.50 a week for residential home

care and up to £539 a week for nursing home care.

Attendance allowance: £69 a week.

Invalid care allowance: £55.50 a week.

Supplementary benefit (social assistance): The benefit is

paid according to need, up to a maximum of £263 a week.

Survivor Benefits

Bereavement allowance: £141.25 a week.

Bereavement payment: £1,220.

Widowed parent’s allowance: £141.25 a week.

Supplementary benefit (social assistance): The benefit is

paid according to need, up to a maximum of £263 a week.

Administrative Organization

Guernsey Social Security Authority administers the program.

Sickness and Maternity

Regulatory Framework

First laws: 1964 (sickness), 1971 (maternity), and 1972

(medicines).

Current laws: 1971 (social assistance), 1978 (social insurance

sickness and maternity), 1990 (medicines and health care), and

2002 (long-term care).

Type of program: Social insurance (cash benefits), social

assistance (means-tested benefits), and universal system

(specialist medical care, medical consultations, consultation

grants, and long-term care).

Coverage

Sickness benefit: Employed and self-employed persons with

weekly earnings of £87 or more.

Maternity allowance: Employed and self-employed persons

with weekly earnings of £87 or more.

Long-term care: All residents.

Supplementary benefit: Persons incapable of work, single

parents, and pregnant women not cohabiting.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Self-employed person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: See source of funds under Old Age, Disability,

and Survivors, above. The total cost of supplementary benefit.

Qualifying Conditions

Sickness benefit: At least 26 qualifying contributions must

be paid between the later of 1965 or the date that insurance

coverage first began and the date of claim. For entitlement to

full benefit, 50 contributions or credits must have been paid in

the relevant contribution year. Benefits are proportionately

reduced for fewer than 50 contributions or credits. No benefit

is payable with fewer than 26 contributions or credits.

Long-term care: The person has been resident for 5 years at

any time and for 1 year immediately prior to receiving long-term

care benefit.

Maternity allowance: Resident with 50 qualifying

contributions or credits, including 26 in the year preceding the

13th week before the expected week of childbirth. The benefit

is proportionately reduced for fewer than 50 contributions or

credits. No benefit is payable with fewer than 26 contributions.

Maternity grant: Must be insured and ordinarily resident.

Sickness and Maternity Benefits

Sickness benefit: £99 a week.

Long-term care: Up to £290.50 a week for residential home

care and up to £539 a week for nursing home care.

Maternity allowance: £99 a week.

Maternity grant: A lump-sum payment of £248.

Workers’ Medical Benefits

Medical benefits: Acute hospital accommodation is provided

by the government. Specialist medical services are provided

by specialist group practices contracted to the government.

Cost sharing: A flat-rate fee of £2.30 is charged for medical

prescriptions. There is no charge for persons over age 65 or

persons with low income.

Medical grant: A sum of £8 is provided toward the cost of

primary care medical consultation and a £4 grant is provided

toward the cost of nurse consultation.

Dependents’ Medical Benefits

Same as for the insured.

Administrative Organization

Guernsey Social Security Authority administers cash benefits.

States of Guernsey Board of Health administers hospital

benefits.
102 ♦ SSPTW: Europe, 2004

Guernsey

Work Injury

Regulatory Framework

First law: 1925.

Current law: 1978.

Type of program: Social insurance system.

Coverage

Employed and self-employed persons.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Self-employed person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: See source of funds under Old Age, Disability,

and Survivors, above.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

Industrial injury benefit: £99 a week.

Permanent Disability Benefits

Industrial disablement benefit: £108 a week if 100% disabled.

The benefit is proportionately reduced for an assessed degree

of disability of less than 100%. No benefit is paid if the

assessed degree of disability is under 20%.

Benefits are also provided through the sickness benefit under

Sickness and Maternity and the disability pension under Old

Age, Disability, and Survivors, above.

Survivor Benefits

Bereavement allowance: £141.25 a week.

Bereavement payment: £1,220.

Widowed parent’s allowance: £141.25 a week.

Administrative Organization

Guernsey Social Security Authority administers the program.

Unemployment

Regulatory Framework

First law: 1964.

Current law: 1978.

Type of program: Social insurance system.

Coverage

Employed persons with weekly earnings of £87 or more.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: See source of funds under Old Age, Disability,

and Survivors, above.

Qualifying Conditions

Unemployment benefit: At least 26 qualifying contributions

paid since insurance coverage first began. The full benefit is

paid with 50 or more contributions or credits in the relevant

contribution year. The benefit is proportionately reduced if the

insured has fewer than 50 contributions or credits. No benefit

is payable with fewer than 26 contributions or credits.

The insured must register at a job center every week to confirm

his or her availability for work. The insured may be

disqualified for 10 weeks for leaving employment voluntarily,

misconduct, or refusing a suitable work offer.

Unemployment Benefits

£99 a week. The cash benefit is limited to 180 days.

Requalification for benefit requires 13 weeks of employment

with at least 20 hours of work a week.

Administrative Organization

Guernsey Social Security Authority administers the program.

Family Allowances

Regulatory Framework

First law: 1943.

Current law: 1950.

Type of program: Universal system.

Coverage

Residents with one child or more.

Source of Funds

Insured person: None.

Employer: None.

Government: Total cost.
SSPTW: Europe, 2004 ♦ 103

Guernsey

Qualifying Conditions

Family allowances: The claimant was born in Guernsey or

has been resident in Guernsey for at least 52 weeks in the

previous 2 years. The child must be under age 16; under

age 20 and in full-time education.

Family Allowance Benefits

Family allowances: £11.75 a week for each child.

Administrative Organization

Guernsey Social Security Authority administers the program.
104 ♦ SSPTW: Europe, 2004

Hungary

Hungary

Exchange rate: US$1.00 equals 211.39 forints.

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1928.

Current law: 1997 (private pensions), implemented in 1998.

Type of program: Social insurance and mandatory individual

account system.

Note: Persons insured before June 30, 1998, or who became

insured after this date but before reaching age 42, can choose

between the social insurance system and the mixed system of

social insurance and mandatory individual accounts. The

mixed system is mandatory for all others.

Coverage

Employees, members of handicraft and agricultural

cooperatives, self-employed entrepreneurs, apprentices of

professional training schools, outside workers, artistic

performers, lawyers, public notaries, the clergy, and recipients

of unemployment benefits.

Voluntary coverage for persons, including independent

farmers, not covered by compulsory insurance.

Source of Funds

Insured person

Social insurance only: 8.5% of gross earnings.

Social insurance and mandatory individual account: 0.5%

(social insurance) and 8% (mandatory individual account).

Self-employed person: Equal to the total employee and

employer contribution.

Employer: 18% of payroll for social insurance only.

Government: Any deficit in the social insurance system.

All of the above social insurance contributions also finance

work injury benefits.

The minimum earnings for contribution purposes are equal to

the national minimum wage (53,000 forints).

The maximum earnings for contribution purposes for

employees are three times gross average earnings.

Qualifying Conditions

Old-age pension: Age 62 (men) with 20 years of service. The

retirement age for women is 59 (rising to age 60 by 2005, age 61

by 2007, and age 62 by 2009) with 20 years of service.

Partial pension: A partial pension is paid with at least 15 years

of service at age 62.

Early pension: Age 60 (men) or age 57 (women) with 38 years

of service; a reduced pension is paid with at least 33 years of

service.

Deferred pension: A deferred pension is possible.

Disability pension: For a nonaccident-related disability

pension, the required insurance period depends on age at the

onset of disability, up to a maximum of 20 years at age 55. For

an accident-related disability pension, there is no qualifying

period. There are three classes of pension: Class I, 100% loss

of working capacity and need for permanent care provided by

others; Class II, 100% loss of working capacity but no need for

permanent care provided by others; and Class III, with at least

a 67% loss of working capacity.

The national medical board determines the assessed degree of

loss in working capacity.

Survivor pension: The deceased was a pensioner or met the

qualifying period for an old-age pension or disability pension

at the time of death.

Old-Age Benefits

Old-age pension (social insurance): The pension is based

on a percentage of average monthly earnings since 1988 and

the length of the insurance period; 53% of average earnings is

paid with 20 years of service, plus 2% for each year between 21

and 25 years, plus 1% for each year between 26 and 36 years,

plus 1.5% for each year beyond 36.

Average income for calculating the pension is subject to an

annual ceiling and is indexed.

The minimum old-age pension is 23,200 forints.

Partial pension: A reduced pension is paid with at least

15 years of service at age 62.

Early pension: A full or reduced pension is paid.

Deferred pension: The pension is increased by 0.5% for each

month of deferral.

Benefit adjustment: Benefits are adjusted annually in January

according to the average estimated annual change in consumer

prices and in the national net average wage level.

Old-age pension (mandatory individual account): The value

of accumulated contributions plus accrued interest. At

retirement, the insured purchases an annuity; a lump sum is

paid with less than 180 months or contributions at the time of

retirement.

Permanent Disability Benefits

Disability pension (social insurance): If younger than

age 35, 51% of average monthly earnings with less than 2 years

of contributions (Class III). The pension increases by 0.5% for

each additional year of service, up to a maximum of 25 years. If

aged 35 or older, the pension is between 37.5% and 67% of

average monthly earnings, depending on age at the onset of

disability and the length of the insurance period (Class III). A

Class II pension is paid at a rate 5% higher than Class III; a

Class I pension is paid at a rate 10% higher than Class III.
SSPTW: Europe, 2004 ♦ 105

Hungary

Benefit adjustment: Benefits are adjusted annually in January

according to the average estimated annual change in consumer

prices and in the national net average wage level.

Disability pension (mandatory individual account): There is

no benefit provision.

Survivor Benefits

Survivor pension (social insurance): 50% of the insured’s

pension, payable to a widow(er) who at the time of the

spouse’s death was age 55 (age 60 for a widower), disabled, or

caring for two children. A limited pension is paid to other

widow(er)s for 1 year only; 18 months in certain cases.

The pension is reduced to 20% if the survivor receives a

pension in his or her own right and ceases if the survivor

remarries before the pensionable age for the old-age pension.

Orphan’s pension (social insurance): 30% of the insured’s

pension for each orphan under age 16 (age 25 if a student, no

limit if disabled); 60% for a full orphan or an orphan with a

disabled surviving parent.

Other eligible survivors (dependent parents and

grandparents): 20% of the insured’s pension, if disabled or

aged 65 or older.

Benefit adjustment: Benefits are adjusted annually in January

according to the average estimated annual change in consumer

prices and in the national net average wage level.

Survivor pension (mandatory individual account): There is

no benefit provision.

Administrative Organization

Social insurance: Ministry of Health, Social, and Family

Affairs supervises the program.

Central Administration of National Pension Insurance

administers social insurance benefits through its local

branches.

National Health Insurance Fund collects contributions through

its local branches.

Mandatory individual accounts: Ministry of Finance

supervises the mandatory individual accounts.

Authorized private pension funds administer the mandatory

individual accounts.

Sickness and Maternity

Regulatory Framework

First law: 1891.

Current law: 1997.

Type of program: Social insurance system.

Coverage

Cash sickness benefits: Employees, members of

cooperatives, apprentices of skilled labor, the self-employed,

and outdoor workers.

Cash maternity benefits: All pregnant employed or selfemployed women who have worked for at least 180 days in the

2 years before childbirth.

All resident women in Hungary are entitled to in-kind benefits.

Medical benefits: All insured persons entitled to cash

sickness benefits, pensioners, unemployment beneficiaries,

recipients of social assistance and allowances, beneficiaries of

pensions provided by churches, regular students (if Hungarian

citizens), and all dependent family members and children.

Source of Funds

Insured person: 4% of gross earnings.

Self-employed person: 15% of earnings.

Employer: 11% of payroll.

Government: Any deficit. The government reimburses the

National Health Insurance Fund for the cost of the child care

fee.

All of the above contributions also finance short-term work

injury cash benefits and medical benefits for work injuries.

Qualifying Conditions

Cash sickness benefit: Currently insured or a loss of earning

capacity due to illness within 3 days after the cessation of

insured employment.

If the insured has less than 1 year of continuous insurance, the

benefit is reduced in proportion.

Maternity benefit (maternity and confinement allowance):

Currently insured or the expected date of childbirth is within

42 days after the cessation of insured employment and the

insured has 180 days of insurance during the last 2 years.

Maternity benefit (child care fee): Paid to a father with

180 days of insurance in the 2 years before the birth of his

child.

Birth grant: See Family Allowances.

Medical benefits: Provided to the beneficiaries of cash

sickness and maternity benefits; family members supported by

the insured person; pensioners; beneficiaries of unemployment

benefits, social assistance, and allowances; beneficiaries of

pensions provided by churches; regular students; and

dependent children.

Sickness and Maternity Benefits

Cash sickness benefit: 60% of daily average net earnings in

the previous calendar year; 70% with 2 years of continuous

employment. The benefit is payable from the first day of
106 ♦ SSPTW: Europe, 2004

Hungary

incapacity for up to 1 year (or for the length of the continuous

insurance period immediately before the onset of illness, if

less).

The employer pays benefits for the first 15 days.

Maternity and confinement allowance: 70% of daily average

net earnings in the previous calendar year. In the absence of

earnings, the current minimum wage is used. The benefit is

payable for the period of maternity leave (4 weeks before and

20 weeks after the expected date of childbirth).

The national minimum wage is 53,000 forints.

Child care fee: Up to a maximum of 83,000 forints a month,

until the child is age 2.

Birth grant: See Family Allowances.

Workers’ Medical Benefits

Medical benefits are provided directly through the facilities of

the public health services in contractual relationship with the

health insurance scheme. Benefits include preventive care;

general and specialist care, including basic dental care;

hospitalization; maternity care; medical rehabilitation;

sanatorium care; and ambulance services.

Cost sharing: Copayments for medicines, appliances, dental

prosthetics, orthodontic services, and spa treatment.

Life-saving medicines and medicines for maternity and infant

care are provided free of charge.

Travel expenses are covered by the health insurance scheme.

There is no limit to duration.

Dependents’ Medical Benefits

Same as for the insured person.

Administrative Organization

Ministry of Health, Social, and Family Affairs supervises the

program.

National Health Insurance Fund, with county health insurance

funds, administers cash sickness and maternity benefits.

Hungarian Tax Authority collects contributions.

Specified health care providers, including private providers

contracted by the National Health Insurance Institute, provide

medical care.

Work Injury

Regulatory Framework

First laws: 1900 (agriculture) and 1907.

Current law: 1997.

Type of program: Social insurance system.

Coverage

Employees, members of cooperatives, apprentices in industrial

training, artisans, the self-employed, independent farmers,

artistic performers, and lawyers.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors and Sickness and Maternity, above.

Self-employed person: See source of funds under Old Age,

Disability, and Survivors and Sickness and Maternity, above.

Employer: See source of funds under Old Age, Disability, and

Survivors and Sickness and Maternity, above.

Government: See source of funds under Old Age, Disability,

and Survivors and Sickness and Maternity, above.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

100% of average net earnings is payable from the first day of

incapacity for up to 1 year. In some cases, the Medical Experts

Institute can extend entitlement to 2 years.

Permanent Disability Benefits

Permanent disability pension: There are three classes of

pension: Class I, 100% loss of working capacity and need for

permanent care provided by others; Class II, 100% loss of

working capacity but no need for permanent care provided by

others; and Class III, at least a 67% loss of working capacity.

The Class I pension is 70% of monthly average earnings; Class

II, 65%; and Class III, 60%.

The minimum pension varies according to pension class.

Work injury allowance: Paid for a permanent disability of

more than 15%. The allowance rises in steps from 8% of

monthly average earnings with an assessed degree of

disability of between 16% and 25% to 30% of monthly average

earnings with an assessed degree of disability of between 50%

and 66%.

Benefits are limited to 2 years if the loss of working capacity is

less than 25%.

Benefit adjustment: Benefits are adjusted annually in January

according to the average estimated annual change in consumer

prices and in the national net average wage level.

Workers’ Medical Benefits

Medical benefits are provided directly to patients through the

facilities of the public health services in contractual

relationship with the health insurance scheme. Benefits

include preventive care; general and specialist care, including

basic dental care; hospitalization; medical rehabilitation;
SSPTW: Europe, 2004 ♦ 107

Hungary

sanatorium care; and ambulance services. Medicines and

appliances are free of charge.

Survivor Benefits

Survivor pension: 50% of the insured’s pension, payable to a

widow(er) who at the time of the spouse’s death was at least

age 55 (age 60 for a widower), disabled, or caring for

two children. A limited pension is paid to other widow(er)s for

1 year only; 18 months in certain cases.

Orphan’s pension: 30% of the insured’s pension for each

orphan under age 16 (age 25 if a student); 60% for a full orphan

or an orphan with a disabled surviving parent.

Other eligible survivors (dependent parents and

grandparents): 20% of the insured’s pension, if disabled or

aged 65 or older.

Benefit adjustment: Benefits are adjusted annually in January

according to the average estimated annual change in consumer

prices and in the national net average wage level.

Administrative Organization

National Health Insurance Fund administers work injury

benefits.

Hungarian Tax Authority collects contributions.

National Pension Insurance Directorate administers cash

benefits.

Specified health care providers, including private providers

contracted by the National Health Insurance Institute, provide

medical care.

Unemployment

Regulatory Framework

First law: 1957.

Current law: 1991.

Type of program: Social insurance system.

Coverage

Wage earners and salaried employees.

Source of Funds

Insured person: 1% of gross earnings.

Employer: 3% of payroll.

Government: None.

Qualifying Conditions

Unemployment benefit: Insurance coverage for at least

200 days in the last 4 years. The insured must be involuntarily

unemployed, actively seeking employment, and without

entitlement to an old-age or disability pension.

Unemployment assistance (means-tested): Paid when

entitlement to unemployment benefit ceases.

Unemployment Benefits

65% of the gross average salary of the previous calendar year,

for a maximum of 270 calendar days.

The minimum benefit is 90% of the minimum old-age pension

(20,880 forints).

The maximum benefit is 1.8 times the minimum old-age pension

(41,760 forints).

Unemployment assistance (means-tested): 70% of the

minimum old-age pension (16,240 forints).

Administrative Organization

Ministry of Employment and Labor provides general

supervision.

State Employment Service administers the program.

Family Allowances

Regulatory Framework

First law: 1938.

Current law: 1998.

Type of program: Universal system.

Coverage

All residents with one or more children.

Source of Funds

Insured person: None.

Employer: None.

Government: Total cost (90% from central government and

10% from local government).

Qualifying Conditions

Family allowances: Child under age 16 (age 20 if a full-time

student) or disabled.

Family Allowance Benefits

Family allowances: For the first child, 4,600 forints a month;

for two children, 5,600 forints a month per child; and for three

or more children, 7,100 forints a month per child.

Family allowances (single parents): For the first child,

5,400 forints a month; for two children, 6,500 forints a month

per child; for three or more children, 7,600 forints a month per

child.

For families with a child with a long-term illness or serious

disability, 12,600 forints a month per child.
108 ♦ SSPTW: Europe, 2004

Hungary

For a child in a foster home or living with foster parents,

6,500 forints a month per child.

Child home care allowance: The minimum monthly old-age

pension (doubled for twins) is paid up to age 3; until twins

begin primary education; up to age 10 if disabled.

Child-rearing support: The minimum monthly old-age

pension is paid to parents rearing three or more children. The

benefit is paid when the youngest child is age 3 until he or she

reaches age 8.

Birth grant: Paid to a mother (or adopting parents) on the

condition that the mother completed at least four prenatal

examinations. A lump sum equal to 225% of the minimum oldage pension is paid after each birth; 300% for twins.

Income-tested cash and in-kind benefits are provided by local

government to bring family income up to a minimum level.

Administrative Organization

Ministry of Health, Social, and Family Affairs provides general

supervision.

Regional Directorates of the Hungarian State Treasury pay

benefits.
SSPTW: Europe, 2004 ♦ 109

Iceland

Mandatory occupational pension: Age 67 for private-sector

employees and age 65 for public-sector employees.

Disability pension

Universal pension: Between ages 16 and 66 with 3 years’

residency in Iceland before the claim to benefit, a permanent

disability assessed at a minimum of 75% as a result of a

medically recognized disease or disability, and annual income

below a certain ceiling.

The pension is payable abroad under reciprocal agreement.

Mandatory occupational pension: The loss of 50% or more of

earning capacity, at least 2 years’ contributions, and a loss of

income due to the reduction in earning capacity.

Survivor pension

Universal pension: A child pension is payable to an orphan,

or to a parent, with 3 years’ residency in Iceland.

Mandatory occupational pension: The surviving spouse

pension and orphan’s pension are paid if the insured

contributed for at least 24 of the 36 months before death or was

receiving an old-age or disability pension at the time of death.

Eligible orphans are defined as children up to age 18.

Old-Age Benefits

Old-age pension

Universal pension: The basic pension for a single person is

IKr 21,249 a month. The benefit is reduced when annual

income exceeds IKr 1,716,020 and ceases when income exceeds

IKr 2,565,980.

Pension supplement: The supplement for a single person is

IKr 41,655 a month. The supplement is reduced when annual

income exceeds IKr 550,656 and ceases when income exceeds

IKr 1,661,456.

Additional pension supplement: The additional pension

supplement for a single person is IKr 20,540 a month. The

supplement is reduced if the insured has other income and

ceases when annual income exceeds IKr 547,733.

The maximum pension is awarded for 40 years’ residency; the

pension is reduced in proportion to the number of years of

residency less than 40 (for example, 3 years’ residency gives

entitlement to 3/40 of the full amount).

Different amounts apply for married or cohabiting couples.

Supplement for children: IKr 16,025 a month for each child

under age 18.

Other means-tested allowances: Means-tested allowances

contribute toward certain living expenses such as housing and

medicine costs.

Benefit adjustment: Benefits are adjusted annually according

to the current state budget for changes in wage trends and are

adjusted at least to the cost-of-living index.

Mandatory occupational pension: A minimum pension of at

least 56% of lifetime average salary is paid for a contribution

Iceland

Exchange rate: US$1.00 equals

72.25 Icelandic kronur (IKr).

Old Age, Disability, and Survivors

Regulatory Framework

First laws: 1909 and 1980.

Current laws: 1993 (social security) and 1997 (general

pension funds).

Type of program: Universal and mandatory occupational

pension system.

Coverage

Universal pension: All residents.

Mandatory occupational pension: All employees and selfemployed persons.

Source of Funds

Insured person

Universal pension: None.

Mandatory occupational pension: 4% of wages.

Self-employed person

Universal pension: A social security contribution of 5.64% is

imposed on the presumptive income of the self-employed.

(Presumptive income is employment income comparable with

the remuneration one would receive if similarly employed by an

unrelated person.)

Mandatory occupational pension: 10% of earnings.

Employer

Universal pension: A social security contribution of 5.64% is

imposed on all remuneration paid for employment.

(Contributions also finance maternity/paternity, work injury,

and unemployment benefits.)

Mandatory occupational pension: 6% of employee’s wages.

Government

Universal pension: Remaining costs.

Mandatory occupational pension: None.

Qualifying Conditions

Old-age pension

Universal pension: Age 67 with a minimum 3 years’ residency

in Iceland between ages 16 and 66 (40 years’ residency for a

full pension) and annual income below a certain ceiling.

The pension is payable abroad under reciprocal agreement.
110 ♦ SSPTW: Europe, 2004

Iceland

period of 40 years (equivalent to 1.4% of average lifetime salary

per contribution year) and is paid for life.

Benefit adjustment: Benefits must be, at a minimum, indexed to

the consumer price index.

Permanent Disability Benefits

Disability pension

Universal pension: The basic pension for a single person is

IKr 21,249 a month. The pension is reduced when annual

income exceeds IKr 1,748,655 and ceases when income exceeds

IKr 2,768,608.

Pension supplement: The pension supplement for a single

person is IKr 42,678 a month. The supplement is reduced when

annual income exceeds IKr 568,574 and ceases when income

exceeds IKr 1,706,653.

Additional pension supplement: The additional supplement

for a single person is IKr 20,540 a month. The additional

supplement is reduced if the insured has other income and

ceases when annual income exceeds IKr 547,733.

Age-related pension supplement: The age-related pension

supplement for a single person is from a minimum of IKr 3,828

to a maximum of IKr 254,988 a year depending on the insured’s

age when entitlement to a disability pension was first

established.

Invalidity allowance: IKr 15,937 a month is payable for an

assessed degree of disability of 50% to 74%.

The maximum pension is awarded for 40 years’ residency, with

coverage projected up to age 67; the pension is reduced in

proportion to the number of years of residency less than 40

(for example, 3 years’ residency gives entitlement to 3/40 of the

full amount).

Different amounts apply for married or cohabiting couples.

Supplement for children: IKr 16,025 a month for each child

under age 18; this amount is doubled if both parents are

disabled.

Other means-tested allowances: Means-tested allowances

contribute toward certain living expenses such as housing and

medicine costs.

Benefit adjustment: Benefits are adjusted annually according

to the current state budget for changes in wage trends and are

adjusted at least to the cost-of-living index.

Mandatory occupational pension: The pension is calculated

according to the assessed degree of disability and fund

regulations.

Supplement for children: IKr 7,294 a month per child for active

members.

Benefit adjustment: Benefits are indexed to the consumer price

index.

Survivor Benefits

Survivor pension

Universal pension: The pension is IKr 16,025 a month for each

orphan under age 18. The pension is doubled for full orphans.

Benefit adjustment: Benefits are adjusted annually according

to the current state budget for changes in wage trends and are

adjusted at least to the cost-of-living index.

Occupational mandatory survivor pension: The insured must

have been receiving a pension from the fund at the time of

death or have paid contributions for a certain period before

death. The survivor pension is equal to 50% of the potential

disability pension to which the pension fund member would

have been entitled in the case of full disability. The pension is

paid for 24 months; there is no time limit for a spouse

supporting a child under age 18 or for a spouse who is at least

50% disabled and under age 67.

Occupational mandatory orphan’s pension: Pensions are paid

to orphans up to age 18. Different amounts apply for the

orphan of an old-age pensioner and the orphan of a disability

pensioner.

Benefit adjustment: Benefits are indexed to the consumer price

index.

Administrative Organization

Universal pensions: Ministry of Health and Social Security

provides general supervision.

State Social Security Institute administers the programs

through local offices.

Mandatory occupational pensions: Ministry of Finance

provides general supervision.

Administration is provided by 56 independent pension funds.

Sickness and Maternity

Regulatory Framework

First laws: 1936 (social security), 1975 (maternity leave and

benefits), and 1973 (health service).

Current laws: 1993 (social security), 2000 (maternity/paternity

leave and benefits), and 1990 (health service).

Type of program: Universal and social insurance system.

Coverage

Cash sickness benefit: Employed and self-employed

residents.

Cash maternity benefits: Employed and self-employed

persons and resident parents.

Medical benefits: All residents.
SSPTW: Europe, 2004 ♦ 111

Iceland

Source of Funds

Insured person: None.

Employer: None for cash sickness and medical benefits. See

source of funds for the universal pension under Old Age,

Disability, and Survivors, above, for cash maternity/paternity

benefits.

Government: Total cost of cash sickness and medical

benefits. Remaining costs for cash maternity/paternity

benefits.

Qualifying Conditions

Sickness benefits: Aged 16 or older, not receiving old-age or

disability benefits, incapacity for work due to sickness for at

least 21 days, and gainful employment in Iceland has ceased.

Maternity benefits: For both parents, active participation in

the domestic labor market for 6 consecutive months before the

first day of parental leave.

Maternity/paternity grants: Twelve months’ residency before

the expected date of childbirth for new residents.

Medical benefits: Six months’ residency for new residents.

Sickness and Maternity Benefits

Sickness benefit: A statutory minimum of IKr 846 a day for

persons who have to give up full-time gainful employment;

IKr 423 for persons who have to give up at least half-time

employment. The benefit is payable after a 15-day waiting

period provided that the incapacity has lasted at least 21 days

and income has ceased. The duration of benefits is 52 weeks

in any one 24-month period.

Daily supplement for dependent children: A supplement of

IKr 231 is awarded for each child under age 18.

Collective agreements provide for the continued payment of

wages and salaries for a certain period (depending on

agreements), in which case cash benefits are not granted until

wages have ceased.

Maternity benefits: Parental benefit entitlements exist for

both parents. For employees and the self-employed, the

benefit is 80% of the insured’s average wage or income during

a 12-month consecutive period ending 2 months before the

first day of the parental leave.

The minimum benefit if the insured is part-time employed

(between 25% and 49%) is IKr 62,121; if employed between

50% and 100%, the minimum benefit is IKr 86,096.

Maternity/paternity grants: The award for parents in less

than 25% employment or who are nonactive is IKr 40,409 a

month. The grant for a parent attending a full-time education

program is IKr 91,200 a month.

Workers’ Medical Benefits

A minimum fee is necessary for a doctor’s consultation.

Inpatient treatment in a public hospital is free of charge. Free

medicine is provided for some chronic diseases; for other

medicines, the insured pays a minimum fee. Inpatient care in a

maternity ward is free of charge. A minimum fee is paid for Xrays and travel costs. Children up to age 15 receive a 75%

refund for dental care, children age 16 receive a 50% refund,

and pensioners receive a 50% to 100% refund (subject to an

income test).

Dependents’ Medical Benefits

Same as for the family head.

Administrative Organization

Ministry of Health and Social Security and Ministry of Social

Affairs provide general supervision.

State Social Security Institute administers the programs

through local offices.

Work Injury

Regulatory Framework

First law: 1925.

Current law: 1993 (social security).

Type of program: Social insurance system.

Coverage

Employed and self-employed persons, apprentices, persons

engaged in rescue operations, and athletes participating in

organized athletic activities.

Source of Funds

Insured person: None.

Employer: See source of funds for the universal pension

under Old Age, Disability, and Survivors, above.

Government: None.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

A daily cash benefit of IKr 1,038. The benefit is payable after a

7-day waiting period for up to 52 weeks.

Dependent supplement: IKr 222 for each dependent child

under age 18.

The maximum benefit is 75% of earnings.

Collective agreements provide for the continued payment of

wages and salaries for a certain period (depending on

agreements), in which case cash benefits are not granted until

wages have ceased.
112 ♦ SSPTW: Europe, 2004

Iceland

Permanent Disability Benefits

Permanent disability pension: IKr 254,988 a year if assessed

as at least 75% disabled. For individuals who are 50% or more

disabled, the award is 50% of the full pension increasing by 2%

for each additional degree of assessed disability up to a level

of 75% disability. If 10% to 49% disabled, a lump sum is

awarded in proportion to the assessed degree of disability.

Pension supplement: A supplement of IKr 512,136 a year plus

an additional pension supplement of IKr 246,480 a year and an

age-related pension supplement from a minimum of IKr 3,828 to

a maximum of IKr 254,988 a year (see permanent disability

benefits under Old Age, Disability, and Survivors, above).

Child’s supplement: IKr 16,025 a month for each child under

age 18 maintained by the beneficiary at the time of the injury. If

the disability is assessed at 75% or more, a supplement is also

paid for children maintained by the beneficiary beyond age 18.

Other means-tested allowances: Means-tested allowances

contribute toward certain living expenses such as housing and

medicine costs.

Workers’ Medical Benefits

All necessary care is provided, including specialist services

and hospitalization.

Survivor Benefits

Survivor pension: If an injury results in death within 2 years

of when the injury occurred, the surviving spouse receives

IKr 24,040 a month for 8 years.

Orphan’s pension: IKr 16,025 a month for each orphan under

age 18; the pension is doubled for full orphans. Children older

than age 16 who, because of a disability, were supported by

the deceased when the injury occurred receive a benefit of

between IKr 300,421 and IKr 901,263, depending on the degree

of necessary support.

A lump-sum payment of IKr 420,592 is paid to the deceased’s

surviving children when there are no other surviving relatives

or, otherwise, to the estate.

Administrative Organization

Ministry of Health and Social Security provides general

supervision.

State Social Security Institute administers benefits through

local offices.

Unemployment

Regulatory Framework

First law: 1956.

Current law: 1997.

Type of program: Social insurance system.

Coverage

Employed persons and covered self-employed persons.

Source of Funds

Insured person: None.

Employer: See source of funds for the universal pension

under Old Age, Disability, and Survivors, above.

Government: None.

Qualifying Conditions

Unemployment benefits: Aged 16 to 69 and resident in

Iceland, with a minimum of 10 weeks of insurable and full

employment in the previous 12 months. Must be registered at

an employment office and actively seeking, and available for,

work. The insured must have been unemployed for at least

3 days before registration. For continuing entitlement, the

insured must register every 2 weeks at the employment agency.

Unemployment Benefits

The maximum benefit is IKr 3,681 a day. The minimum benefit,

after 10 weeks of full employment, is IKr 920 a day. Benefits are

reduced proportionally in cases of part-time work.

Daily supplement for children: A supplement equal to 4% of

the full benefit is paid for each child under age 18.

Administrative Organization

Ministry of Social Affairs provides general supervision.

Directorate of Labor administers the Unemployment Insurance

Fund and the employment agencies.

Family Allowances

Regulatory Framework

First law: 1946.

Current law: 1981 (income tax and net wealth tax).

Type of program: Universal system.

Coverage

Resident children and parents or persons responsible for the

support of the children.

Source of Funds

Insured person: None.

Employer: None.

Government: Total cost.
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Iceland

Qualifying Conditions

Child must be under age 16 and resident in Iceland and

supported by those who are subject to unlimited tax liability in

Iceland according to the tax law.

Family Allowance Benefits

Child benefit: The benefit is assessed and paid on the basis

of the previous year’s income. Advance payments are made on

the first day of February and the first day of May each year.

The annual child benefit award in 2004 is IKr 36,308 for children

under age 7 at the end of the 2003 income year.

Supplement: In addition, married parents or cohabiting parents

receive a supplement of IKr 123,254 for the first child and

IKr 146,713 for the second child and additional children. Single

parents receive a supplement of IKr 205,288 for the first child

and IKr 210,584 for the second child and additional children.

The benefits are granted as a tax reduction. Benefits are

reduced according to certain rules when taxable income

exceeds IKr 1,444,139 (married and cohabiting parents) or

IKr 722,070 (single parents).

Administrative Organization

Ministry of Finance provides general supervision.

Tax authorities administer benefits in the form of a tax

reduction.
114 ♦ SSPTW: Europe, 2004

Ireland

Ireland

Exchange rate: US$1.00 equals 0.80 euros (€).

Old Age, Disability, and Survivors

Regulatory Framework

First laws: 1908 (old-age assistance), 1911 (disability

insurance), and 1935 (survivor insurance).

Current law: 1993 (consolidated legislation), with

amendments.

Type of program: Social insurance and social assistance

system.

Coverage

Employed persons aged 16 to 65 with €38 or more in weekly

covered earnings.

Self-employed persons with annual earnings of €3,174 or more

are covered for contributory old-age and survivor benefits.

Exclusions: Part-time employees earning less than €38 a week;

public servants who were permanent and pensionable before

April 6, 1995; and casual domestic workers.

Source of Funds

Insured person: No contributions are made if weekly earnings

are €287 or less; for weekly earnings of €356 or less, no

contributions are made for the first €127, with 4% paid on the

remaining balance of covered weekly earnings.

If annual earnings are €42,160 or less and weekly earnings are

higher than €356, 2% of the first €127 and 6% of the remaining

balance; if the insured has a means-tested medical card or

receives specified benefits or allowances, no contributions are

made for the first €127, with 4% paid on the remaining balance

of weekly earnings.

All of the insured’s contributions also finance cash sickness,

maternity, work injury, unemployment, and adoptive benefits.

Self-employed person: For annual income of €18,512 or less,

3% of gross income; for annual income greater than €18,512,

5% of gross income.

All of the self-employed person’s contributions also finance

cash maternity and adoptive benefits.

Employer: For employees with weekly earnings of €356 or

less, 8.5% of wages; for employees with weekly earnings

higher than €356, 10.75% of wages.

There is no ceiling for contribution purposes for employers.

All of the employer’s contributions also finance cash sickness,

maternity, work injury, unemployment, and adoptive benefits.

Government: Any deficit and the total cost of means-tested

allowances.

Qualifying Conditions

Old-age contributory pension: Age 66 with social insurance

coverage beginning before age 56. To qualify for the maximum

pension, the insured must have 260 weeks of paid

contributions, with an annual average of at least 48 weeks of

paid or credited contributions (from April 5, 1979, to the end of

the last tax year) before reaching age 66; for the minimum

pension, the insured must have an annual average of at least

10 weeks paid or credited contributions and a total of

260 weeks of paid contributions overall (beginning from 1953

or the date of entry into insurable employment, whichever is

later, up to the end of the last tax year) before reaching age 66.

There is no retirement test.

There is also a special provision as of May 5, 2000, for persons

who were contributors before 1953 and who have at least

260 weeks of paid contributions.

Any years since 1994 spent caring for children under age 12 (or

disabled of any age) are disregarded when calculating the

annual contribution.

Retirement pension: Age 65. The contribution conditions

are the same as under the old-age contributory pension, except

the insured must have at least 24 weeks of paid or credited

contributions rather than 10 to receive the minimum pension.

The insured must be retired from employment or selfemployment, unless earning less than €38 a week from

employment; €3,174 a year from self-employment.

Carer’s benefit: Aged 16 or older and under age 65 or age 66

and having left the workforce to care for a person in need of

full-time care and attention. The carer must not be employed or

self-employed for more than 10 hours a week outside the home.

The carer must have 156 paid contributions with 39 paid in the

relevant tax year or 39 paid in 12 months before applying or

26 paid in the relevant tax year with 26 paid in the relevant tax

year prior to that.

Credited contributions that count toward the qualifying

conditions for certain benefits are awarded if an individual is

receiving cash benefits for sickness, maternity, permanent

disability, unemployment, work injury, or the retirement

pension.

Contributory benefits are payable abroad. The carer’s benefit

is not payable abroad.

Old-age noncontributory pension (means-tested):

Residents with limited means aged 66 or older.

Preretirement allowance (means-tested): Residents with

limited means and aged 55 to 65 who have opted to retire from

the labor force.

Carer’s allowance (means-tested): Residents with limited

means, aged 18 or older, who are living with and caring for

people requiring full-time care and attention. The carer may

work for up to 10 hours a week but must not be receiving any

other benefits.

Disability pension (invalidity pension): Permanent incapacity

for work. The benefit is payable after 1 year’s ordinary

sickness benefit (or less than 1 year for a severe incapacity).
SSPTW: Europe, 2004 ♦ 115

Ireland

The insured must have 260 weeks of paid contributions with

48 weeks paid or credited in the last tax year.

Blind person’s pension (means-tested): Residents with

severely reduced vision, of limited means, and aged 18 or older.

Disability allowance (means-tested): Residents with limited

means, aged 16 to 66, physically or mentally disabled, and

substantially handicapped in the undertaking of suitable work.

Widow(er)’s contributory pension: The deceased insured or

the spouse has paid 156 weeks of contributions and meets

either of the following conditions:

1. Must have an annual average of 39 weeks of paid or

credited contributions in either the last 3 or the last 5 fiscal

years prior to the date the spouse died or attained age 66; or

2. To receive the minimum pension, must have an annual

average of at least 24 weeks of paid or credited contributions

since entry into insured employment; for the maximum pension,

must have an annual average of 48 weeks of paid or credited

contributions.

Orphan’s contributory allowance: Both parents are

deceased; one parent is deceased or unknown or has

abandoned/refused/failed to provide for the child and the other

parent is unknown or has abandoned/refused/failed to provide

for the child, plus 26 weeks of contributions paid by a parent or

stepparent.

Bereavement grant: Payable on the death of an insured

person, the insured’s spouse, the surviving spouse of an

insured person, or the insured’s child (under age 18). The

deceased, surviving spouse, or parent had 26 weeks of paid

contributions since starting work and either 39 contributions

paid or credited in the relevant tax year or an annual average of

39 contributions paid or credited over the 3 or 5 tax years

before age 66 or the date of death.

Widowed parent’s grant: Payable to a widow(er) who is

entitled to certain benefits with at least one qualified child and

who was widowed on or after December 1, 1999.

Widow(er)’s noncontributory pension (means-tested):

Widowed residents with limited means who are not cohabiting.

Orphan’s noncontributory pension (means-tested):

Orphaned residents with limited means. Both parents must be

deceased; one parent is deceased or unknown or has

abandoned/refused/failed to provide for the child and the other

parent is unknown or has abandoned/refused/failed to provide

for the child.

Old-Age Benefits

Old-age contributory pension: The maximum pension is

€167.30 a week.

Partial pension: The pension is reduced if the annual average

number of contributions is less than 48 weeks.

Qualified adult supplement: The maximum supplement is

€111.50 a week for a qualified adult and €129.20 if aged 66 or

older (these rates are reduced if the pensioner is receiving less

than the maximum personal rate or if the qualified adult has

earnings or income between €88.88 and €210 a week; no

supplement is paid if the qualified adult has earnings or income

over €210 a week), plus €19.30 a week for each dependent

child; €9.65 if there is no qualified adult.

Retirement pension: The maximum pension is €167.30 a

week.

Partial pension: The pension is reduced if the annual average

number of contributions is less than 48 weeks.

Carer’s benefit: €149.70 a week, plus €16.80 for a child

dependent or €8.40 per child for carers living with their spouse

or partner or €224.60 if caring for more than one person.

Old-age noncontributory pension (means-tested): Up to

€154 a week depending on a means test, plus up to €101.80 for

a qualified adult and €16.80 for each child dependent; €8.40 if

there is no qualified adult.

Preretirement allowance (means-tested): Up to €134.80 a

week depending on a means test, plus up to €89.40 for a

qualified adult and €16.80 for each child dependent (€8.40 if

there is no qualified adult).

Special allowances: For a single pensioner aged 66 or older

who lives alone, €7.70 a week; for a pensioner aged 80 or older,

€6.40 a week; for a pensioner aged 66 or older and living on

certain offshore islands, €12.70 a week.

Carer’s allowance (means-tested): Up to €139.60 a week;

€157.80 a week if aged 66 or older. An additional 50% is

payable if the carer is caring for two persons. An additional

€16.80 is payable for each child dependent; €8.40 per child if

the carer is living with his or her spouse or partner.

Permanent Disability Benefits

Disability pension (invalidity pension): €140.30 a week;

€167.30 a week if aged 65 or older.

Dependent supplement: €100.10 a week for a qualified adult

(€129.20 if aged 66 or older), plus €19.30 a week for each

dependent child under age 18; €9.70 if there is no qualified

adult.

Blind person’s pension (means-tested): Up to €134.80 a

week (€154 if aged 66 or older), plus €89.40 a week for a

qualified adult; €101.80 if aged 66 or older.

Special allowances: €7.70 a week for a single pensioner

aged 66 or older living alone; €6.40 a week for a pensioner

aged 80 or older; €12.70 a week for a pensioner aged 66 or older

and living on certain offshore islands.

Disability allowance (means-tested): Up to €134.80 a week,

plus €89.40 a week for a qualified adult and €16.80 for each

dependent child; €8.40 if there is no qualified adult.

Survivor Benefits

Widow(er)’s contributory pension: Up to €140.30 a week;

€167.30 if aged 66 or older.

Partial pension: The pension is reduced if the insured’s

average annual number of contributions was less than

48 weeks but more than 24.
116 ♦ SSPTW: Europe, 2004

Ireland

Dependent supplement: €21.60 for each dependent child.

Widowed parents who do not qualify for the contributory

pension may be entitled to the one-parent family payment (see

Family Allowances, below).

Orphan’s contributory allowance: €107 a week per orphan.

Bereavement grant: A lump sum of up to €635.

Widowed parent’s grant: A lump sum of €2,700.

Widow(er)’s noncontributory pension (means-tested): Up

to €134.80 a week; €154 if aged 66 or older.

Special allowances: €7.70 a week for a single pensioner

aged 66 or older; €6.40 a week for a pensioner aged 80 or older.

Orphan’s noncontributory pension (means-tested): Up to

€107 a week depending on a means test.

Administrative Organization

Department of Social and Family Affairs administers the

program.

Revenue Commissioners collect contributions for the majority

of insured persons.

Sickness and Maternity

Regulatory Framework

First law: 1911.

Current law: 1993 (consolidated legislation), with

amendments.

Type of program: Social insurance (cash benefits) and

universal (medical care) system.

Coverage

Cash sickness and maternity benefits: Employees under

age 66.

Cash maternity benefits only: The self-employed.

Exclusions: Part-time employees earning less than €38 a week;

public servants who were permanent and eligible for a pension

before April 6, 1995; and casual domestic workers.

Medical benefits: All residents.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government

Cash sickness and maternity benefits: See source of funds

under Old Age, Disability, and Survivors, above.

Medical benefits: Total cost for low-income residents and part

of the cost for the remainder of the population.

Qualifying Conditions

Cash sickness benefit (disability benefit): Under age 66

with 39 weeks (52 weeks from April 2004) of paid contributions,

including 39 weeks paid or credited in the last year (of which

13 are paid contribution weeks, unless the insured was

receiving the long-term unemployment assistance or

preretirement allowance immediately before claiming benefits);

260 contribution weeks are required for benefits to be paid

beyond 1 year.

Cash maternity benefit: In covered employment at least

14 weeks before the expected date of childbirth with 39 weeks

of paid contributions in the 12-month period immediately

before maternity leave or a total of 39 weeks of paid

contributions with 39 weeks paid or credited in the relevant tax

year (self-employed women must have 52 weeks paid

contributions in the relevant tax year or in the tax year before

or immediately after the relevant tax year). A claimant may also

qualify if she has 26 weeks of paid contributions in the last

fiscal year and 26 paid contributions in the prior year.

Health and safety benefit: Paid to pregnant workers, to

workers who have recently given birth and are breastfeeding,

or to those who are unable to continue working because of an

unavoidable risk to their health and safety arising at the

workplace and who satisfy the relevant social insurance

contributions.

Night workers are also entitled to this payment for the duration

of pregnancy and for a period following childbirth during

which no alternative (daytime) work is available.

Medical benefits: Full eligibility for medical-card holders

(low-income residents and residents over age 70); limited

eligibility for those with moderate and high income.

Sickness and Maternity Benefits

Sickness benefit (disability benefit): Up to €134.80 a week,

depending on weekly income. The benefit is payable after a

3-day waiting period for up to 52 weeks; may be extended if

contribution weeks total 260 or more.

Dependent supplement: Up to €89.40 for a qualified adult;

€16.80 for each child dependent; €8.40 if there is no qualified

adult.

Maternity benefit: Employed women receive 70% of weekly

earnings for 18 weeks, including at least 4 weeks (up to

10 weeks) before the expected date of childbirth.

The minimum benefit is €151.60 a week.

The maximum benefit is €232.40 a week.

Health and safety benefit: Up to €134.80 a week, depending

on the level of earnings. The first 21 days are paid by the

employer. The benefit is payable until the insured becomes

eligible for maternity benefit; for 14 weeks following the birth if

the mother is involved in night work; or for 26 weeks following

childbirth if breastfeeding.

Dependent allowance: Up to €89.40 a week for a qualified adult

dependent; €16.80 for each child dependent; €8.40 if there is no

qualified adult.
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Ireland

Workers’ Medical Benefits

All services are provided free in public clinics and hospital

wards to medical-card holders (means-tested except for those

older than age 70); partial cost sharing for the remainder of the

population.

Benefits include outpatient and inpatient care; specialist and

laboratory services; maternity and infant care; and optical,

dental, and hearing treatment. Free prescription drugs are

available to medical-card holders; there is partial cost sharing

for those without a medical card.

Patients without a medical card receive hospital outpatient

services free of charge; a fee of €45 applies only to a first visit

for an accident or emergency that is not referred by a general

practitioner. Inpatient care is €45 a night, subject to a maximum

of €450 in any 12 consecutive months.

Dependents’ Medical Benefits

All services are provided free in public clinics and hospital

wards to medical-card holders (means-tested except for those

older than age 70); partial cost sharing for the remainder of the

population.

Benefits include outpatient and inpatient care; specialist and

laboratory services; maternity and infant care; and optical,

dental, and hearing treatment. Free prescription drugs are

available to medical-card holders; there is partial cost sharing

for those without a medical card.

Patients without a medical card receive hospital outpatient

services free of charge; a fee of €45 applies only to a first visit

for an accident or emergency that is not referred by a general

practitioner. Inpatient care is €45 a night, subject to a maximum

of €450 in any 12 consecutive months.

Administrative Organization

Cash benefits: Department of Social and Family Affairs

administers benefits.

Medical benefits: Department of Health and Children

administers services and benefits through eight regional health

boards.

Regional health boards provide services through their own

institutions, clinics, and dispensaries, or elsewhere by

arrangement.

Optical, dental, and hearing treatment services are provided

with cost-sharing arrangements by private practitioners on

behalf of the Department of Social and Family Affairs.

Work Injury

Regulatory Framework

First law: 1897 (workmen’s compensation act).

Current law: 1993 (consolidated legislation), with

amendments.

Type of program: Social insurance system.

Coverage

Employed persons.

Exclusions: Self-employed persons, domestic workers, and

members of the security and defense forces.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: Any deficit for private-sector employees and

the total cost for public-sector employees.

Qualifying Conditions

Work injury benefit: An injury sustained in the course of, and

arising out of, covered employment or the contraction of an

occupational disease. There is no minimum qualifying period.

Temporary Disability Benefits

Injury benefit: €134.80 a week is payable after a 3-day waiting

period for up to 26 weeks starting from the onset of the

accident or disease. (Disability benefit may be paid after

26 weeks, see cash sickness benefit under Sickness and

Maternity, above).

Dependent supplement: €89.40 a week for a qualified adult and

€16.80 a week for each dependent child; €8.40 if there is no

qualified adult.

Permanent Disability Benefits

Disablement benefit: €165.90 a week if assessed as over 90%

disabled.

Partial disability: From 20% to 90% disabled, the benefit is

reduced in proportion to the assessed degree of disability; if

less than 20% disabled, a lump sum up to a maximum of €11,610

is paid depending on the assessed degree of disability.

Unemployability supplement: €134.80 a week if the insured is

not eligible for disability benefit (see cash sickness benefits

under Sickness and Maternity, above) and is permanently

incapable of work.

Dependent supplement: €89.40 a week for a qualified adult and

€16.80 a week for each dependent child; €8.40 if there is no

qualified adult.

Constant-attendance supplement: Up to €149.70 a week.

Workers’ Medical Benefits

Same as the general medical benefits provided under Sickness

and Maternity, above, plus all necessary medical care and

transportation not covered under general medical benefits.
118 ♦ SSPTW: Europe, 2004

Ireland

Survivor Benefits

Survivor pension: €163.60 a week is paid to a widow or

dependent disabled widower under age 65 (€171.70 if aged 66

or older), plus €21.60 for each dependent child.

Special allowance for a survivor living alone: €7.70 a week if

aged 66 or older; €6.40 a week if aged 80 or older.

Orphan’s pension: €109.90 a week for each child.

Dependent parents: If the insured was single, €163.60 a week

to the first parent; €79.10 a week to the other parent. If the

insured person was married, €79.10 a week to each parent.

Funeral grant: A lump sum of €635.

Administrative Organization

Department of Social and Family Affairs administers cash

benefits.

Department of Health and Children administers medical

services and benefits through eight regional health boards.

Unemployment

Regulatory Framework

First law: 1911.

Current law: 1993 (consolidated legislation), with

amendments.

Type of program: Social insurance and social assistance

system.

Coverage

Employees under age 66.

Exclusions: Certain part-time employees; self-employed

persons; public servants who were permanent and pensionable

before April 6, 1995; and casual domestic workers.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: Any deficit and the total cost of means-tested

assistance.

The maximum annual earnings for contribution purposes are

€42,160.

Qualifying Conditions

Unemployment benefit: Aged 16 to 65, unemployed for at

least 3 days in 6 consecutive days, and with 39 weeks of paid

contributions including 39 weeks paid or credited in the last tax

year or at least 26 contributions paid in each of the last

2 complete contribution years before the beginning of the

benefit year for which benefit is claimed. The applicant must

be available for, and capable of, work and be registered at a

Social Welfare Local Office.

Unemployment assistance (means-tested): Resident with

limited means, aged 18 to 65, unemployed for at least 3 days in

6 consecutive days, and not eligible for unemployment benefit.

The applicant must be available for, and capable of, work and

be registered at a Social Welfare Local Office.

Unemployment must not be due to voluntary leaving,

misconduct, refusal of a suitable job offer (disqualification for

up to 9 weeks for any offense), or a trade union dispute

(disqualification for the duration of dispute).

Unemployment Benefits

The maximum benefit is €134.80 a week, payable for up to

15 months (156 days if under age 18; 156 weeks if aged 65 or

older).

Dependent supplement: €89.40 a week for a qualified adult and

€16.80 a week for a dependent child; €8.40 if there is no

qualified adult.

Unemployment assistance (means-tested): Up to €134.80 a

week.

Dependent supplement: €89.40 a week for a qualified adult and

€16.80 a week for a dependent child; €8.40 if there is no

qualified adult.

Administrative Organization

Department of Social and Family Affairs administers the

program through its local offices.

Family Allowances

Regulatory Framework

First laws: 1944 (child benefit), 1984 (family income support),

1990 (single parent’s allowance), and 1996 (one-parent family

payment).

Current law: 1993 (consolidated legislation), with

amendments.

Type of program: Universal and social assistance system.

Coverage

Residents with one or more children.

Source of Funds

Insured person: None (except the contribution for adoptive

benefit that is included in the contribution to Old Age,

Disability, and Survivors, above).

Employer: None (except the contribution for adoptive benefit

that is included in the contribution for Old Age, Disability, and

Survivors, above).
SSPTW: Europe, 2004 ♦ 119

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Government: Total cost (except for the cost of adoptive

benefit).

Qualifying Conditions

Child benefit: For a child under age 16 (under age 19 if a

student or disabled).

One-parent family payment (means- and earnings-tested):

Paid to a single noncohabiting parent with limited means and

earnings of €293 or less a week who has at least one dependent

child.

Widowed parent’s grant: Payable on the death of a spouse to

a person widowed on or after December 1, 1999, who is entitled

to the one-parent family payment.

Adoptive benefit: The insured has 39 weeks of paid

contributions in the 12-month period immediately before the

placement date of the adoptive child or a total of 39 weeks of

paid contributions with 39 weeks paid or credited in the last

fiscal year (self-employed persons must have 52 weeks of paid

contributions in either of the last 2 fiscal years).

Family income supplement (income-tested): Parents with at

least one child under age 18 (aged 18 to 22 if in full-time

education), who are in full-time employment (at least 19 hours a

week or 38 hours every 2 weeks), and who have an average

weekly joint income below €407 for one child, €433 for two

children (the income threshold increment is €25 each for the

third and fourth child, €32 for the fifth child, €26 for the sixth

child, €21 for the seventh child, and €22 in the case of a family

with eight or more children).

The benefit is payable for 52 weeks while employed.

The benefit is not affected by changes in family income or

short periods of illness.

Family Allowance Benefits

Child benefit: €125.60 a month for the first and second child;

€157.30 a month for the third and each additional child. For

twins, the child benefit is payable at one and a half times the

monthly rate for each child. For the birth of triplets or more,

the benefit is doubled for each child.

Multiple birth grant: €635 for each child.

One-parent family payment (means- and earnings-tested):

Up to €134.80 a week (€154 if aged 66 or older).

Dependent supplement: €19.30 for each child dependent.

Special allowance: €6.40 a week for a pensioner aged 80 or

older.

Widowed parent’s grant: A one-time payment of €2,500.

Adoptive benefit: 70% of weekly earnings is payable for

10 weeks. The minimum benefit is €151.60. The maximum

benefit is €232.40 a week.

Family income supplement (income-tested): 60% of the

difference between family income and the applicable income

threshold, depending on the number of children. The minimum

supplement is €20 a week. The supplement is payable for

52 weeks while the parent or parents are employed.

Administrative Organization

Department of Social and Family Affairs administers

allowances. Payments are made at post offices on behalf of the

department or by electronic funds transfer.
120 ♦ SSPTW: Europe, 2004

Isle of Man

Isle of Man

Exchange rate: US$1.00 equals 0.56 pounds (£).

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1948.

Current laws: 1992 (consolidated legislation) and 1995

(pensions).

Type of program: Social insurance and social assistance

system.

Coverage

Basic state retirement pension and State Second Pension

(S2P): Mandatory for employed persons at or above the lower

earnings limit for national insurance contributions (£77 per

week) and for self-employed persons with net annual income of

£4,095 or more. Also available to nonemployed persons who

choose to pay voluntary contributions.

Additional pension (earnings-related): For employed earners

who have earnings at or above the lower earnings limit and

who are contracted into the State Earnings-Related Pension

Scheme (SERPS) between 1978 and April 2002 and/or the

Scheme’s successor, the State Second Pension Scheme (S2P),

from April 6, 2002. Employed earners can be contracted out of

SERPS/S2P if their employer is contributing to an approved

pension scheme or if the contributor is a member of an

appropriate personal pension scheme, in which case their

contributions count only toward the basic state retirement

pension.

Source of Funds

Insured person: 10% of weekly earnings between £89 and

£595 (certain married women and widows pay only 3.85%); if

contracted out of S2P, 8.4%. The insured’s contributions also

finance benefits for sickness and maternity, work injury, and

unemployment.

Self-employed person: Flat rate of £2 a week, plus 8% of net

income between £4,615 and £30,940 a year. Self-employed

contributions cover all benefits except the jobseeker’s

allowance (social insurance) and the additional pension under

S2P.

Voluntary contributor: Flat rate of £6.95 a week.

Contributions cover only the flat-rate basic state retirement

pension and bereavement benefits.

A percentage of all of the above contributions is allocated to

the Health Services Division of the Department of Health and

Social Security to assist with the costs of health care

provision, the rest of which are met by the government.

Employer: 12.8% of the employee’s weekly earnings over £89.

If contracted out of S2P, between 9.3% and 11.8% of weekly

earnings over £89, depending on the type of contracted-out

scheme. The employer’s contributions also finance benefits

for sickness and maternity, work injury, and unemployment.

Government: Total cost of means-tested allowances and

other noncontributory benefits, and most of the expense of

health care, through the Health Services Division.

Qualifying Conditions

Old-age pension: Age 65 (men) or age 60 (women); the state

retirement age for women will rise gradually to age 65 between

2010 and 2020.

Basic state retirement pension (flat-rate): To qualify for a

full pension, contributions must have been paid or credited for

approximately 90% of years in the working life. Reduced

coverage results in a proportionately reduced pension. For

years before April 1975, 50 weeks of contributions. For tax

years April 1975 to April 1978, contributions are based on

earnings of at least 50 times the lower earnings level. Since

April 1978, contributions are based on 52 times the lower

earnings level. If contributions (paid or credited) cover less

than 25% of years in the working life, the basic state retirement

pension is not payable.

Deferred pension: The pension can be deferred until age 70

(men) or age 65 (women), subject to a minimum deferral period

of 7 weeks.

SERPS/S2P: Employee’s contributions paid on earnings

between the lower and upper earnings limit in any tax year from

1978.

Old person’s pension (noncontributory retirement

pension): Aged 80 and ineligible for the contributory pension

of £46.35 a week. Ordinarily resident in Isle of Man, and

resident in Isle of Man or the UK for 10 years in any

consecutive 20-year period after age 60.

Retirement pension premium: Over age 75, ordinarily

resident in Isle of Man and qualifies for or receives a retirement

pension. At least 10 years of contributions paid on Isle of

Man.

Pension supplement: Over age 45, ordinarily resident in Isle

of Man, at least 10 years of contributions paid in Isle of Man,

and entitled to one of the following: retirement pension; the

basic pension in a widowed mother’s allowance, widowed

parent’s allowance, widow’s pension, or long-term incapacity

benefit.

Long-term incapacity benefit: Men (under age 65) and

women (under age 60) who are unable to work because of

illness or disability. Contributions paid on earnings of at least

25 times the lower earnings level in any one of 3 complete tax

years (April to March) before the start of the benefit year

(January to December), plus contributions paid or credited on

earnings of at least 50 times the weekly lower earnings level in

each of the 2 complete tax years before the start of the benefit

year in which the claim is made. The benefit is payable after
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Isle of Man

52 weeks of incapacity for work (as determined by a medical

test), or after 28 weeks if terminally ill or receiving the highestrate care component of disability living allowance.

An age-related supplement is provided if disability begins

before age 45 and the insured is ordinarily resident in the Isle

of Man.

Disability living allowance (noncontributory, no means

test): Disability begins before age 65, payable after 3 months

of disability. Present in Isle of Man at time of claim and

ordinarily resident. Present in Isle of Man or the UK for 6 of

the 12 preceding months. The allowance comprises two

components: the care component for people who need help

with personal care, and the mobility component for people who

are unable to walk, are virtually unable to walk, or require

supervision to get around. The care component is payable at

three different rates (depending on the level of care required);

the mobility component is payable at the higher rate for those

who are unable or virtually unable to walk and at the lower rate

for those who require guidance or supervision to get around.

Special rules apply to the terminally ill with a life expectancy of

6 months or less.

Attendance allowance (noncontributory, no means test):

Disability begins after age 65 and the person needs a high level

of care; usually payable after 6 months of disability. The

person must be present in Isle of Man at time of claim and be

ordinarily resident and present in Isle of Man or the UK for 6 of

the 12 preceding months. Special rules for terminally ill with a

life expectancy of 6 months or less.

Disability working allowance (noncontributory, meanstested): Employment for at least 16 hours a week, with an

illness or disability that puts the person at a disadvantage in

securing employment. Personal savings over £11,000 may

reduce the benefit payable. The person is receiving a

qualifying benefit (such as disability living allowance or

attendance allowance) or had been receiving one of the

following benefits in the 8 weeks before making the claim:

incapacity benefit (short-term high rate or long-term rate),

severe disablement allowance, or income support (in certain

circumstances). The insured or his or her partner must have

been born in Isle of Man, qualify as an Isle of Man worker, or

be resident in Isle of Man for at least 6 months.

Carer’s allowance (noncontributory, earnings-tested):

Payable to an insured person who earns less than £77 per

week, after allowable expenses, and who cares for a severely

disabled person (who receives certain qualifying benefits) for

35 hours or more each week.

Widow’s pension: The deceased was a pensioner or met

requirements for a basic state pension at the time of death.

The pension is payable to widows and for transitionally

protected cases only.

Widowed parent’s allowance: For widow(er)s with at least

one dependent child under age 19 for whom they receive child

benefit. The surviving spouse is dependent on the deceased’s

national insurance contributions. The allowance is the same as

the basic state pension, with a reduced coverage period

resulting in a proportionately reduced allowance.

Bereavement allowance: Over age 45 when the spouse died

or when the widowed parent’s allowance ceased. The

surviving spouse is dependent on the deceased’s national

insurance contributions. The allowance is the same as the

basic state pension, with a reduced coverage period resulting

in a proportionately reduced pension.

Bereavement payment: A lump sum for widow(er)s under

age 60 or for a survivor whose spouse was not entitled to the

basic state pension at the time of death. The surviving spouse

is dependent on the deceased spouse’s having paid sufficient

national insurance contributions in any tax year.

Guardian’s allowance: Raising an orphan or, in very limited

circumstances, a child with one surviving parent. At least one

of the child’s deceased parents was born in Isle of Man or

spent 52 weeks of any 2-year period after age 16 in Isle of Man.

Payment for funeral expenses (tax-free, noncontributory):

To assist with funeral expenses and payable if the deceased

was ordinarily resident in Isle of Man. An additional payment

is available if receiving income support, family income

supplement, disability working allowance, or income-based

jobseeker’s allowance and if personal savings are less than

£11,000.

Income support (noncontributory, means-tested social

assistance benefit): Available to those with income below

certain levels. Certain income may be disregarded when

calculating entitlement, for example, child benefit. The benefit

is payable to unemployed persons not required to seek

employment, such as the elderly, sick, disabled, single parents,

and carers. Assistance can be given with housing costs, and

single payments can be made to cover urgent and exceptional

needs. Personal savings over £11,000 may reduce the benefit

payable. The benefit is not payable to persons who are

working more than 16 hours a week. The benefit is subject to a

residential qualification.

Old-Age Benefits

Basic state retirement pension (flat-rate): £77.45 a week,

plus £46.35 a week for each dependent adult and £11.35 a week

for each dependent child. An additional £2 a week is payable

to those over age 80.

Note: Supplements for child dependents ceased for new claims

as of April 2003.

Deferred pension: An increment of 0.1428% of the pension for

each week of deferred retirement between ages 65 and 70 (men)

or ages 60 and 65 (women), subject to a minimum deferral

period of 7 weeks.

SERPS/S2P: The pension is based on average indexed

surplus earnings, up to a maximum of £131.35 a week.

Old person’s pension: £46.35 a week less any basic state

pension entitlement.
122 ♦ SSPTW: Europe, 2004

Isle of Man

Retirement pension premium: £11.40 a week less any

increase paid if over age 80 or for an additional pension

entitlement.

Pension supplement: The weekly rate is equal to 50% of the

qualifying benefit. A reduced pension entitlement results in a

proportionately reduced supplement.

Income support (noncontributory, means-tested social

assistance benefit): Cash benefits are payable to those with

income below certain levels.

Permanent Disability Benefits

Long-term incapacity benefit: The benefit is payable from

the 53rd week of incapacity (unless terminally ill, in which case

it is payable from the 29th week) following the payment of

short-term incapacity benefit. The benefit is £72.15 a week,

plus £43.15 a week for each dependent adult and £11.35 a week

for each dependent child. If the disability began before age 45,

an additional benefit of £7.60 or £15.15 a week is paid.

Note: Supplements for child dependents ceased for new claims

as of April 2003.

Severe disablement allowance: £43.60 a week plus between

£4.85 and £15.15, depending on age at the onset of disability;

£25.90 a week for each dependent adult and £11.35 a week for

each dependent child.

Note: Severe disablement allowance was discontinued for new

claims as of April 9, 2001. All persons incapacitated from that

date are required to claim incapacity benefit.

Disability living allowance (noncontributory, no means

test): For those who need help with personal care, the care

component is payable at three different rates depending on the

level of care required. For those who are unable or virtually

unable to walk or require supervision to get around, the

mobility component is payable at the higher rate for those who

are unable or virtually unable to walk and at the lower rate for

those who require guidance or supervision to get around.

Special rules apply to the terminally ill with a life expectancy of

6 months or less.

Attendance allowance (noncontributory, no means test):

The allowance is paid at two rates depending on care needs.

Disability working allowance (noncontributory, meanstested): Employment for at least 16 hours a week, with an

illness or disability that puts the person at a disadvantage in

securing employment. Personal savings over £11,000 may

reduce the benefit payable.

Carer’s allowance (noncontributory, earnings-tested): The

allowance is payable to an insured person who earns less than

£77 a week, after allowable expenses, and who cares for a

severely disabled person (who receives certain qualifying

benefits) for 35 hours or more each week.

Income support (noncontributory, means-tested social

assistance benefit): Cash benefits are payable to those with

income below certain levels.

Survivor Benefits

Widowed parent’s allowance: £77.45 a week plus £11.35 for

each dependent child.

Note: Supplements for child dependents ceased for new claims

as of April 2003.

Bereavement allowance: The allowance varies according to

the age when widowed, up to a maximum rate of £77.45 a week.

Bereavement payment: A lump sum of £2,000.

Guardian’s allowance: £11.55 a week for each child.

Universal funeral payment: If death occurs in Isle of Man,

£190; if death occurs outside Isle of Man and burial or

cremation is to take place within Isle of Man, £310. Further

help is available to those who receive income-related benefits

and whose personal savings are less than £11,000.

Administrative Organization

Isle of Man Department of Health and Social Security, Social

Security Division, collects national insurance payments and

administers and distributes pensions and benefits.

Sickness and Maternity

Regulatory Framework

First law: 1951.

Current laws: 1951 (national health service), 1992

(consolidated legislation), 1994 (incapacity benefit), and 1999

(welfare reform and pensions).

Type of program: Social insurance and social assistance

(cash benefits) system and universal (medical care) system.

Coverage

Short-term incapacity benefit: All those who satisfy certain

contribution conditions, whether or not employed when they

become sick.

Maternity allowance: All women who satisfy certain

employment and earnings rules.

Payment for maternity expenses: Expectant mothers who

receive, or whose partner receives, income-related benefits.

Medical care: All residents.

Source of Funds

Insured person: For incapacity benefit and maternity

allowance, see source of funds under Old Age, Disability, and

Survivors, above.

Employer: For incapacity benefit and maternity allowance,

see source of funds under Old Age, Disability, and Survivors,

above.

Government: Most of the cost of medical care and the total

cost of means-tested allowances.
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Qualifying Conditions

Short-term incapacity benefit: At least 4 consecutive days

of sickness within a period of incapacity for work.

Contributions must be paid on earnings of at least 25 times the

weekly lower earnings level in any one of the 3 complete tax

years (April to March) before the start of the benefit year

(January to December), plus contributions must be paid or

credited on earnings of at least 50 times the weekly lower

earnings level in each of the 2 complete tax years before the

start of the benefit year in which the claim is made.

The benefit is payable only to people who are below the

current state pension age of 65 (men) or 60 (women).

Maternity allowance (contributory, not income-related):

Expectant mothers who have worked as an employee or a selfemployed earner for at least 26 of the 66 weeks before the

expected week of childbirth and have earned at least £30 a

week or paid self-employed contributions for at least 13 of

those weeks. Mothers who do not meet the qualifying

conditions for a maternity allowance may qualify for a shortterm incapacity benefit for a limited period.

Payment for maternity expenses: Expectant mothers

aged 16 or older whose pregnancy lasts to the 25th week

and who are receiving, or whose partner is receiving, an

income-related benefit. Personal savings over £11,000 will be

offset against payment.

Medical benefits: All residents.

Income support (noncontributory, means-tested social

assistance): The benefit is payable depending on

circumstances and to those with income below prescribed

levels. Certain income may be disregarded when calculating

entitlement, for example, child benefit. The benefit is also

payable to unemployed persons who are not required to seek

employment, such as the elderly, sick, disabled, single parents,

and carers. Assistance can be given with housing costs, and

single payments can be made to cover urgent and exceptional

needs. Personal savings over £11,000 may reduce the benefit

payable. The benefit is not payable to persons who are

working 16 hours or more a week. The benefit is subject to

residential qualification.

Sickness and Maternity Benefits

Short-term incapacity benefit: The benefit is payable for the

first 28 weeks at £54.40 a week and from the 29th to the 52nd

week at £64.35 a week. The benefit is payable after a 3-day

waiting period.

Dependent supplement: £33.65 a week for a dependent adult;

£11.35 a week for each dependent child from the 29th week.

Maternity allowance: The benefit is payable at a standard

rate of £100 a week or 90% of average earnings, whichever is

lower.

Dependent supplement: £33.65 a week for a dependent adult.

Payment for maternity expenses: £215 less any personal

savings over £11,000.

Income support (noncontributory, means-tested social

assistance benefit): Cash benefits are payable to those with

income below certain levels.

Workers’ Medical Benefits

Medical services are provided by doctors and dentists under

contract with and paid directly by the Health Services Division

of the Department of Health and Social Security. Benefits

include general practitioner care, specialist services,

hospitalization, maternity care, dental care, medicines,

appliances, home nursing, and family planning.

Cost sharing: Patients pay £2.60 for each prescription and a

percentage of dental work subject to a £150 maximum. Patients

pay 55% for routine dental treatment and 70% for specialist

dental treatment. Exemptions from prescription and dental

charges are available to those receiving income-related

benefits and their dependents, all children under age 16,

students under age 19, nursing mothers, all people aged 60 or

older, and war pensioners.

Dependents’ Medical Benefits

Same as for the insured.

Administrative Organization

Isle of Man Department of Health and Social Security, Social

Security Division, administers and distributes benefits.

Health Services Division administers and provides medical

services.

Work Injury

Regulatory Framework

First law: 1948.

Current law: 1992 (consolidated legislation).

Type of program: Social insurance system.

Coverage

Employed earners only.

Exclusions: The self-employed.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: See source of funds under Old Age, Disability,

and Survivors, above.
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Isle of Man

Qualifying Conditions

Work injury (industrial injuries disablement benefit): There

is no minimum qualifying period. The benefit is not payable to

those whose accident was suffered or whose disease was

contracted while self-employed or engaged as a member of the

armed forces of the Crown. The insured must be at least 14%

disabled. The assessed degree of disability is determined by

medical examination.

Temporary Disability Benefits

Short-term incapacity benefit: Available for the first

52 weeks to those who meet certain contribution conditions. If

incapacity continues beyond 52 weeks, long-term incapacity

benefit is paid.

Income support (noncontributory, means-tested social

assistance): Available to those with income below prescribed

levels. Certain income may be disregarded when calculating

entitlement, for example, child benefit. The benefit is payable

to unemployed persons not required to seek employment, such

as the elderly, sick, disabled, single parents and carers, or

those caring for children. Assistance can be given with

housing costs, and single payments can be made to cover

urgent and exceptional needs. Personal savings over £11,000

may reduce benefit payable. Benefit is not payable to persons

who are working 16 hours or more a week. The benefit is

subject to a residential qualification.

Permanent Disability Benefits

Industrial injuries disablement benefit: If 100% disabled, up

to £116.80 a week. The benefit is payable from the 15th week

after the accident or the onset of the disease.

Partial disability: The benefit varies from £23.36 a week for an

assessed degree of disability of 15% up to a maximum of

£105.12 a week for an assessed degree of disability of 90%.

Workers’ Medical Benefits

Provided by the Health Services Division of the Department of

Health and Social Security.

Survivor Benefits

Widowed parent’s allowance: £77.45 a week plus £11.35 for

each dependent child.

Note: Supplements for child dependents ceased for new claims

as of April 2003.

Bereavement allowance: The allowance varies according to

the age when widowed, up to a maximum rate of £77.45 a week.

Bereavement payment: A lump sum of £2,000.

Guardian’s allowance: £11.55 a week for each child.

Universal funeral payment: If death occurs in Isle of Man,

£190; if death occurs outside Isle of Man and burial or

cremation is to take place within Isle of Man, £310. Further

help is available to those receiving income-related benefits and

whose personal savings are less than £11,000.

Administrative Organization

Isle of Man Department of Health and Social Security, Social

Security Division, collects National Insurance payments and

distributes benefits.

Health Services Division administers and provides health care.

Unemployment

Regulatory Framework

First law: 1948.

Current laws: 1995 (jobseekers).

Type of program: Social insurance and social assistance

system.

Coverage

Social insurance: Registered unemployed persons who have

paid contributions as an employed earner in each of the 2 tax

years (April to March) before the benefit year (January to

December) in which the claim is made.

Exclusions: Self-employed persons and certain married women

and widows who pay reduced-rate contributions. Excluded

persons may qualify for assistance under the social assistance

program.

Social assistance: Registered unemployed persons with

income below prescribed levels. Assistance can be given with

housing costs, and single payments can be made to cover

urgent and exceptional needs. Personal savings over £11,000

may reduce the benefit payable. Coverage is subject to a

residential qualification.

Exclusions: Persons who are working 16 or more hours a week

or those whose partner works 24 or more hours a week.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above. (Self-employed contributions

do not count for the contribution-based jobseeker’s

allowance.)

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: Total cost of income-tested allowances.

Qualifying Conditions

Jobseeker’s allowance (social insurance): Aged 16 or older

(but younger than the state pension age), involuntarily

unemployed, or working fewer than 16 hours a week.

Contributions have been paid on earnings of at least 25 times

the lower earnings level in one of the last 2 complete tax years
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Isle of Man

(April to March) before the start of the benefit year (January to

December) in which the claim is made. The insured must have

paid or credited contributions on earnings of at least 50 times

the lower earnings level in both of the 2 tax years immediately

before the start of the benefit year in which the claim is made.

The insured must be registered as unemployed, be capable of

and actively seeking employment, have a current Jobseeker’s

Agreement, be earning less than a prescribed amount, and be

physically present in Isle of Man. The allowance is payable for

up to 26 weeks in conjunction with jobseeker’s enhanced

allowance.

Jobseeker’s enhanced allowance: Additional weekly payment

for those entitled to jobseeker’s allowance (social insurance)

provided that the period of unemployment is preceded by

2 years’ continuous employment in Isle of Man. The allowance

is payable for up to 26 weeks in conjunction with jobseeker’s

allowance (social insurance).

Jobseeker’s allowance (social assistance): The allowance

is payable to those not entitled to jobseeker’s allowance (social

insurance) or if that allowance is less than a prescribed

amount. Income must not exceed a prescribed amount, and

personal savings over £11,000 may reduce the benefit payable.

Certain income may be disregarded when calculating

entitlement, for example, child benefit. The person must be

registered as unemployed, be capable of and actively seeking

employment, have a current Jobseeker’s Agreement, be earning

less than a prescribed amount, and be physically present in

Isle of Man. There is no entitlement if a partner works 24 or

more hours a week. The benefit is subject to a residential

qualification.

Unemployment Benefits

Jobseeker’s allowance (social insurance): The allowance is

payable for up to 6 months after a 3-day waiting period. The

allowance is £32.90 a week if aged 16 or 17; £43.25 a week if

between ages 18 and 24; and £54.65 a week if aged 25 or older.

Jobseeker’s enhanced allowance: The allowance is payable for

up to 6 months in conjunction with jobseeker’s allowance

(social insurance). The allowance is £43.25 a week for those

between ages 18 and 24 and £54.65 a week for those aged 25 or

older.

Jobseeker’s allowance (social assistance): The allowance

varies depending on age, family income, and household

composition. For example, a person aged 18 or older who lives

with parents may receive £68.90 a week; a married man with

two teenage children may receive £145.75 a week plus an

allowance towards housing costs.

Administrative Organization

Isle of Man Department of Health and Social Security, Social

Security Division, collects National Insurance payments and

distributes cash benefits.

Family Allowances

Regulatory Framework

First law: 1951.

Current law: 1992 (consolidated legislation).

Type of program: Universal (child benefit) and social

assistance (family income supplement) system.

Coverage

Residents with one or more dependent children.

Source of Funds

Insured person: None.

Employer: None.

Government: Total cost.

Qualifying Conditions

Child benefit (noncontributory, universal benefit): The

benefit is payable to parents of children under age 16 (or

students under age 19) who have been in Isle of Man for at

least 182 days in the preceding 52 weeks.

Family income supplement (income-tested): The

supplement is payable to parents, or childless married couples,

working at least 16 hours a week whose income is below a

prescribed level. The supplement is subject to a residential

qualification.

Family Allowance Benefits

Child benefit: £18.20 a week for children under age 16 and

£26.80 a week for young persons between ages 16 and 18 who

are receiving relevant education.

Family income supplement: The amount depends on family

income, number of children, housing costs, number of hours

worked, and child care charges. There is an award of £0.70 for

every £1.00 that income falls short of a prescribed amount.

Certain income may be disregarded when calculating actual

family income, for example, child benefit.

Administrative Organization

Isle of Man Department of Health and Social Security, Social

Security Division, administers and distributes benefits.
126 ♦ SSPTW: Europe, 2004

Italy

Italy

Exchange rate: US$1.00 equals 0.80 euros (€).

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1919.

Current laws: 1952, 1965, 1968, 1974, 1975, 1978, 1980, 1981,

1984, 1992, 1995, 1997, and 2001.

Type of program: Social insurance system.

Coverage

Employed persons, including domestic employees.

Voluntary coverage for contract and professional workers not

covered by any specific fund.

Special systems for public-sector workers and the selfemployed.

Source of Funds

Insured person: 8.89% of earnings.

Employer: 23.81% of payroll. (A lower contribution rate is

paid by specific employers and/or employers in certain

economically distressed areas.)

Government: Full cost of income-tested allowances and any

overall deficit.

The minimum daily earnings for contribution purposes are

€39.16 for workers in industry or, if higher, the minimum wage.

The minimum wage is established by sector and by category

through collective bargaining.

There are no maximum earnings for contribution or benefit

purposes, except for the newly insured. The maximum earnings

for newly insured persons entering the system after January 1,

1996, are €84,401 a year.

Qualifying Conditions

Old-age pension: Conditions vary according to three

categories of insured person:

• Category 1. New entrants to the labor force as of 1996.

Age 57 with 5 years of contributions. Cessation of

gainful employment is necessary. The pension must not

be less than the social allowance plus 20%. There is no

entitlement to a pension below this level, unless the

insured is aged 65 or older or has 40 years of contributions.

• Category 2. Insured persons with less than 15 years of

contributions as of December 31, 1992. Age 65 (men) or

age 60 (women) with 20 years of contributions. Cessation of any gainful employment is necessary.

• Category 3. Insured persons with at least 15 years of

contributions as of December 31, 1992. Age 65 (men) or

age 60 (women) with 15 years of contributions. Cessation of any gainful employment is necessary.

Old-age allowance (means tested): Age 70. Payable for a

single person or a couple.

Seniority pension: Age 57 with 35 years of contributions or

regardless of age with 38 years of contributions (for the selfemployed, age 58 with 35 years of contributions or regardless

of age with 40 years of contributions). The contribution period

will rise gradually to 40 years by 2008. Cessation of gainful

employment is necessary.

New entrants to the labor force as of 1996 are not eligible for

the seniority pension.

Social allowance: Age 65 and an Italian citizen or a citizen of

a member state of the EU resident in Italy; also payable to nonEU citizens resident in Italy with a residence permit. Income,

including that of a partner, must be below a government-set

level.

Disability pension: Total and permanent inability to perform

any work with at least 5 years of contributions, including 3 in

the 5 years before the claim. Entitlement is based on the

absence of all other forms of income, including earnings from

self-employment and unemployment benefits.

Disability allowance (means-tested): The loss of 2/3 of

working capacity with at least 5 years of contributions,

including 3 in the 5 years before the claim. The allowance is

payable in the first instance for a period of 3 years; may be

extended for additional 3-year periods. After the allowance has

been extended for a second consecutive time, the award

becomes permanent. At retirement age and if the insured

satisfies the qualifying conditions for the old-age pension,

entitlement ceases and the old-age pension is awarded. The

disability allowance is reduced by 25% if the insured has

income four times greater than the minimum income

(€21,433.36) and by 50% if income is five times greater than the

minimum income (€26,791.70).

Survivor pension: The insured was either receiving an oldage, seniority, or disability pension, had 15 years of

contributions, or had 5 years of contributions, including 3 in

the 5 years preceding death.

Eligible survivors are the spouse, a separated spouse entitled

to alimony, dependent minor children, dependent children who

were students or disabled at the time of the insured’s death,

and nephews, nieces, or grandchildren who were dependent on

the deceased.

Other eligible survivors (in the absence of the above) are

parents older than age 65 without entitlement to a pension who

were dependent on the deceased.

Death grant: Awarded if the qualifying conditions for the

survivor pension are not met. The deceased must have paid at

least 1 year’s contributions in the previous 5 years.
SSPTW: Europe, 2004 ♦ 127

Italy

Old-Age Benefits

Old-age pension: The pension calculation varies according to

the starting date of the insurance period.

Category 1: For insured persons whose insurance period

began on or after January 1, 1996, the pension is 33% (20% for

the self-employed) of annually adjusted insured earnings

multiplied by a variable coefficient (4.72 at age 57 or 6.136 at

age 65).

Category 2: For insured persons with less than 18 years of

contributions as of December 31, 1995, the pension for the

contribution period before January 1, 1996, is based on a

progressive percentage (0.9% to 2%) of earnings times the

number of years of contributions. The pension for the

contribution period beginning January 1, 1996, is 33% (20% for

the self-employed) of annually adjusted insured earnings

multiplied by a variable coefficient (4.72 at age 57 or 6.136 at

age 65).

Category 3: For insured persons with at least 18 years of

contributions as of December 31, 1995, the pension is based on

a progressive percentage (0.9% to 2%) of salary multiplied by

the number of years of contributions, up to a maximum of 40.

The minimum monthly pension for pensioners with an annual

income lower than a predetermined level (€10,716.68 for a single

person; €21,433.36 for a couple) is €412.18.

The minimum monthly pension for pensioners aged 70 or older

receiving a special supplement to the pension and with annual

income lower than a predetermined level (€6,967.35 for a single

person and €11,750.96 for a couple) is €535.95.

Schedule of payments: The pension is paid monthly, with a

13th payment in December.

Benefit adjustment: Benefits are adjusted annually according

to the average change in the cost of living.

Seniority pension: The pension is based on a progressive

percentage (0.9% to 2%) of earnings multiplied by the number

of years of contributions, up to a maximum of 40.

Social allowance: €4,738.61 a year; may be increased to

€535.95 a month for pensioners aged 70 or older receiving a

special supplement to the pension and with annual income

lower than a predetermined level (€6,967.35 for a single person

and €11,750.96 for a couple).

Schedule of payments: The pension is paid monthly, with a

13th payment in December.

Benefit adjustment: Benefits are adjusted annually according

to the average change in the cost of living.

Permanent Disability Benefits

Disability pension: The pension calculation varies according

to the starting date of the insurance period.

Category 1: For insured persons whose insurance period

began on or after January 1, 1996, the pension is 33% (20% for

the self-employed) of annually adjusted insured earnings

multiplied by a variable coefficient depending on the insured’s

age.

Category 2: For insured persons with less than 18 years of

contributions as of December 31, 1995, the pension for the

contribution period before January 1, 1996, is based on a

progressive percentage (0.9% to 2%) of earnings times the

number of years of contributions. The pension for the

contribution period beginning January 1, 1996, is 33% (20% for

the self-employed) of annually adjusted insured earnings

multiplied by a variable coefficient depending on the insured’s

age.

Category 3: For insured persons with at least 18 years of

contributions as of December 31, 1995, the pension is based on

a progressive percentage (0.9% to 2%) of salary multiplied by

the number of years of contributions, up to a maximum of 40.

For each of the above three categories, an increment based on

the anticipated number of years between the date of the onset

of disability and the normal pension age is paid.

The minimum pension is €392.69; €526.46 for an insured person

aged 60 with income below a predetermined level (€6,714 for a

single person and €11,271.39 for a couple).

Constant-attendance supplement: €369.27 a month.

Disability allowance (means-tested): The calculation is the

same as for the disability pension but without the increment for

the anticipated number of years between the date of the onset

of disability and normal pension age.

The minimum disability allowance is the minimum pension.

Schedule of payments: Benefits are paid monthly, with a 13th

payment in December.

Benefit adjustment: Benefits are adjusted annually according

to the average change in the cost of living.

Survivor Benefits

Survivor pension: 60% of the pension paid or accrued to the

insured is payable to the spouse; 80% for a spouse with one

child; 100% for a spouse with two or more children.

Full orphan’s pension: 70% of the pension paid or accrued to

the insured for one orphan; 80% for two orphans; 100% for

three or more orphans.

Other eligible survivors (in the absence of the above): 15%

of the pension paid or accrued to the insured for each parent,

brother, or sister.

Income test: For survivor pensions awarded after

September 1, 1995, the pension is reduced by between 25% and

50% if the eligible survivor has income above certain limits.

The maximum survivor pension is 100% of the insured’s

pension.

Death grant: A variable lump-sum award of between €22.31

and €66.93.

In the case of the death of an insured person who entered the

labor force on or after January 1, 1996, a lump-sum benefit may

be paid equal to the disability allowance multiplied by the

number of years of contributions.
128 ♦ SSPTW: Europe, 2004

Italy

Administrative Organization

Ministry of Labor and Social Welfare and Ministry of Economy

and Finance provide general supervision.

National Social Insurance Institute administers the mandatory

national program through its branch offices as well as

administering a number of special programs for certain

categories of insured worker.

Sickness and Maternity

Regulatory Framework

First laws: 1912 (maternity), 1927 (tuberculosis), and 1943

(sickness).

Current laws: 2001 (maternity); 1978, 1983, 1999, and 2001

(sickness); and 1970, 1975, and 1998 (tuberculosis).

Type of program: Social insurance (cash benefits) and

universal (medical care) system.

Coverage

Sickness benefit: Employed persons and contract workers.

Maternity benefit: Employed persons, contract workers, and

the self-employed.

Tuberculosis benefits: Employed persons; some selfemployed categories are covered.

Medical benefits: All residents.

Source of Funds

Insured person

Sickness benefits: None; some categories of contract workers

make variable contributions.

Maternity benefits: None; self-employed persons contribute.

Some categories of contract workers make variable

contributions.

Tuberculosis benefits: None.

Employer

Sickness and maternity benefits: Total cost for employed

persons. Variable contributions are made on behalf of some

categories of contract workers.

Tuberculosis benefits: None.

Government (sickness, maternity, and tuberculosis

benefits): Total cost of maternity benefits for certain

categories of worker and the total cost of tuberculosis benefits.

Qualifying Conditions

Sickness and maternity benefits: Currently covered; selfemployed and contract workers must meet contribution

conditions.

Tuberculosis benefits: One year of coverage.

Medical benefits: There is no minimum qualifying period.

Sickness and Maternity Benefits

Sickness benefit: 50% of average earnings for the first

20 days; thereafter, 2/3 of average earnings. The benefit is

payable after a 3-day waiting period for up to 180 days; may be

extended in special cases.

For contract workers, the daily benefit is awarded only for days

of hospitalization and the amount is variable and based on a

percentage of the value of the contributions made in the

12 months before hospitalization. The benefit is payable for

180 days of hospitalization a year.

Maternity benefit: Employees are entitled to 80% of earnings,

payable from 2 months (or 1 month) before the expected date of

childbirth and for 3 months (or 4 months) after childbirth.

The self-employed are entitled to 80% of earnings, payable

from 2 months before the expected date of childbirth and for

3 months after childbirth.

Different rules for maternity benefits apply in cases of

adoption, for contract workers, and for part-time workers.

Parental leave: Six months’ leave for either parent, to be

taken before the child is age 3; the self-employed receive

3 months’ leave, to be taken before the child is age 1. The

benefit is equal to 30% of earnings. Parents are entitled to an

additional 6 months’ leave before the child is age 8 plus an

income-tested allowance of 30% of earnings if the parent’s

income is less than 2.5 times the minimum pension.

Tuberculosis benefits

Daily benefit: A fixed daily benefit paid while receiving

institutional care and payable for up to 180 days.

Postsanatorium benefit: A fixed benefit paid after leaving

institutional care and payable for 2 years.

Care and support allowance: A fixed allowance paid for a 2-

year period. The award is renewable.

Christmas allowance: A supplementary allowance paid in

addition to the benefits already received.

Workers’ Medical Benefits

Services are provided by doctors and pharmacists under

contract with, and paid directly by, the National Health Service.

Benefits are paid for by the Health Service or by hospitals,

most of which are public. Benefits include general and

specialist care, hospitalization, prescribed medicines, dental

care, the attendance of midwife or doctor at childbirth,

specified appliances, and spa treatment. Tuberculosis care

includes curative and convalescent care in sanatorium,

postsanatorium care, and rehabilitation.

Cost sharing: A copayment by patients is required for certain

prescribed medicines and hospital tests; copayments are

waived for certain categories of insured persons and for

persons with certain medical conditions.

There is no limit to duration.
SSPTW: Europe, 2004 ♦ 129

Italy

Dependents’ Medical Benefits

Services are provided by doctors and pharmacists under

contract with, and paid directly by, the National Health Service.

Benefits are paid for by the Health Service or by hospitals,

most of which are public. Benefits include general and

specialist care, hospitalization, prescribed medicines, dental

care, the attendance of midwife or doctor at childbirth,

specified appliances, and spa treatment. Tuberculosis care

includes curative and convalescent care in sanatorium,

postsanatorium care, and rehabilitation.

Cost sharing: A copayment by patients is required for certain

prescribed medicines and hospital tests; copayments are

waived for certain categories of insured persons and for

persons with certain medical conditions.

There is no limit to duration.

Administrative Organization

Ministry of Labor and Social Welfare and Ministry of Economy

and Finance provide general supervision.

National Social Insurance Institute administers cash sickness,

maternity, and tuberculosis benefits.

Twenty regional health authorities and their respective local

health authorities administer the National Health Service.

Work Injury

Regulatory Framework

First law: 1898.

Current laws: 1965, 1998, and 2000.

Type of program: Social insurance system.

Coverage

Manual workers, nonmanual employees in dangerous work, the

self-employed in agriculture, domestic workers, company

managers, contract workers, professional sportsmen.

Special system for seamen.

Source of Funds

Insured person: None.

Employer: 0.5% to 16% of payroll, according to the assessed

degree of risk. The average basic rate for industrial workers is

3.0%.

Government: Administrative costs.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

60% of the average daily wage for the first 90 days of

disability; thereafter, 75%. The benefit is payable after a 3-day

waiting period (during which the employer must pay the

benefit).

Average daily wage: Calculated on the 15-day period

preceding the accident or the onset of the occupational

disease.

Permanent Disability Benefits

Permanent disability pension (for incidents before

July 25, 2000): The pension is awarded for an assessed

degree of disability of 11% or more. The pension is based on

wages for the year preceding the date of the accident or the

onset of the occupational disease and on the assessed degree

of disability. The amount of wages used to calculate the

benefit is set within recognized minimum and maximum

established limits. The amount of the pension may be revised

according to changes in the assessed degree of disability. The

pension cannot be combined with old-age, disability, and

survivors pensions.

Dependent supplement: 5% of the pension for a spouse and

for each child under age 18 (age 26 if a student, no limit if

disabled).

Constant-attendance supplement: €369.40 a month with a

permanent disability of 100%.

Benefit adjustment: Benefits are adjusted annually according

to changes in consumer prices.

Permanent disability pension (for incidents on or after

July 25, 2000): If the assessed degree of disability is 6% to

15%, a lump sum is paid based on disability and biological

damage indemnity tables. If the assessed degree of disability

is 16% or greater, a pension is paid according to the assessed

degree of disability plus a cash supplement calculated

according to wages (ceiling) and a coefficient table.

Constant-attendance supplement: €369.40 a month to those

with a permanent disability of 100%.

Benefit adjustment: Benefits are adjusted annually according

to changes in consumer prices.

Transitional compensation for silicosis and asbestosis:

Benefit is payable for 1 year to compensate insured workers

who are forced to abandon a harmful work position in order to

avoid aggravation of a diagnosed disease. In cases in which

the insured has become unemployed, the amount payable is

equal to 2/3 of the average daily wage received in the 30 days

preceding the abandonment of a harmful work position. In

cases in which the insured has changed employment, the

amount is equal to 2/3 of the difference between the average

daily wage received in the period of 30 days preceding the

actual abandonment of the former harmful work position and

the remuneration received in the new employment.

Unemployability pension: A monthly payment of €205.30 is

provided in cases in which the assessed degree of disability is
130 ♦ SSPTW: Europe, 2004

Italy

not less than 34%. The insured must be under age 65, have

lost all capacity for work, or be a risk to colleagues’ or

workplace safety.

Benefit adjustment: Benefits are adjusted annually according

to changes in consumer prices.

Workers’ Medical Benefits

Benefits include medical, surgical, and hospital care;

appliances; and rehabilitation.

Survivor Benefits

Survivor pension: 50% of the insured’s earnings is payable

to the surviving spouse.

Orphan’s pension: 20% of earnings for each orphan under

age 18 (age 26 if a student and dependent, no limit if disabled);

40% for a full orphan.

Other eligible survivors (in the absence of the above): 20%

of the insured’s earnings for each parent, brother, or sister of

the deceased.

The maximum survivor pension is 100% of the insured’s

earnings.

Funeral grant: A lump sum to the person who paid the funeral

expenses.

Administrative Organization

Ministry of Labor and Social Welfare provides general

supervision.

National Accident Insurance Institute administers the program

through provincial offices.

National Health Service administers medical benefits.

Unemployment

Regulatory Framework

First law: 1919.

Current laws: 1924, 1935, 1957, 1972, 1975, 1977, 1988, 1991,

1994, 1996, 1997, 1998, and 2000.

Type of program: Social insurance system.

Coverage

Private-sector employees. (Construction workers are also

covered for a special supplementary benefit.)

Source of Funds

Insured person: None.

Employer: 1.61% (for managers in industry) or 1.91% (for

employees in industry and commerce) of payroll. Industrial

employers also pay 0.3% (0.8% in construction) of payroll to a

special unemployment fund and 2.2% of payroll (1.9% for firms

with fewer than 50 workers) for wage supplement funds.

Government: Administrative costs, plus subsidies for

agricultural workers.

Qualifying Conditions

Unemployment benefit: At least 2 years of coverage with

52 weeks of contributions in the last 2 years; construction

workers must have 43 weeks of contributions during 2 years of

employment in the sector. Unemployment must be involuntary.

Special supplementary allowance: Awarded to construction

workers.

Mobility allowance: Paid to industrial workers with at least

1 year of insurance and 6 months of employment. Workers

must be registered at an employment office and be capable of,

and available for, work. Unemployment must be involuntary.

Unemployment Benefits

Private-sector employees are entitled to 40% of the gross

average daily wage received in the previous 3 months. The

maximum duration of benefit is 180 days; 270 days for workers

older than age 50.

Construction workers receive 80% of earnings for a period of

between 18 months and 27 months, depending on the location

of the employing firm.

Special supplementary allowance: 80% of earnings for a

period of 90 days is paid to construction workers.

Mobility allowance: For the first 12 months, 100% of benefit

from the special unemployment fund; thereafter, 80%. The

maximum duration of the allowance is dependent on the age of

the worker and the location of the place of employment but can

be no more than 48 months.

Administrative Organization

Ministry of Labor and Social Welfare and Ministry of Economy

and Finance provide general supervision.

National Social Insurance Institute administers the program

through its branch offices.

Family Allowances

Regulatory Framework

First law: 1937.

Current laws: 1955, 1986, 1988, 1994, 1995, 1996, and 1997.

Type of program: Employment-related system.

Coverage

Employees and social insurance, welfare, and unemployment

beneficiaries with one or more children or other dependents.
SSPTW: Europe, 2004 ♦ 131

Italy

Special systems for the self-employed and for pensioners of

the special systems.

Source of Funds

Insured person: None.

Employer: 2.48% of payroll.

Government: Subsidies, including 0.8% of the employer

contribution.

The minimum daily earnings for contribution purposes are

€39.16 or, if higher, the minimum wage.

Qualifying Conditions

Family allowances: A dependent spouse; children under

age 18 (no limit if disabled); orphaned brothers, sisters, nieces,

and nephews who are dependent and under age 18 (no limit if

disabled) and not eligible for a survivor pension.

Family Allowance Benefits

Family allowances: The amount varies in relation to family

size and income, from €10.33 to €965.26 for up to seven

children.

Supplements for larger families: An extra 10% and €53.72 for

each additional child.

Income ceilings are increased for single-parent families and for

families with at least one totally disabled family member.

Benefit adjustment: Benefits are adjusted annually according

to a government index.

Administrative Organization

Ministry of Labor and Social Welfare and Ministry of Economy

and Finance provide general supervision.

National Social Insurance Institute administers the program

through the Central Family Allowances Fund.

Individual employers pay allowances directly to their own

employees (except in agriculture) and domestic workers and

settle the surplus or deficit of contributions due with the local

branch office of the Institute.
132 ♦ SSPTW: Europe, 2004

Jersey

Jersey

Exchange rate: US$1.00 equals 0.56 pounds (£).

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1951.

Current laws: 1972 (attendance allowance), 1974 (social

security), 1978 (invalid care and disability benefits), and 1997

(disability transport allowance).

Type of program: Social insurance (social security benefits)

and social assistance (disability benefits) system.

Coverage

Old-age and survivor benefits: Employed and self-employed

persons.

Voluntary insurance for nonemployed persons.

Disability benefits: All residents.

Source of Funds

Insured person: 5.2% of earnings (old-age and survivor

pensions).

Self-employed person: 10.5% of earnings (old-age and

survivor pensions).

Employer: 5.3% of payroll (old-age and survivor pensions).

Government: Total cost of disability benefits.

The maximum monthly earnings for contribution purposes are

£2,884.

All of the above contributions also cover sickness, maternity,

and work injury benefits, as well as part of the cost of medical

services.

Qualifying Conditions

Old-age pension: Payable at age 65 (men and women);

women who were registered with the scheme before 1975 are

eligible for a pension at age 60. The full pension is paid with

45 years of contributions.

Partial pension: The pension is reduced proportionately for

reduced coverage. No pension is payable if the proportion of

contributions required for a full pension is less than 10%.

Early pension: A pension may also be claimed at an actuarially

reduced rate from age 63.

Disability pension: Permanent incapacity for work and

payable after the 1-year entitlement to sickness benefit has

expired.

Attendance allowance (income-tested): Payable to a

severely disabled person needing extra care and attention. The

allowance is paid after 6 months of disability. The allowance is

subject to an income ceiling of £47,396 a year.

Invalid care allowance (income-tested): Payable to a person

who cares for a beneficiary of attendance allowance. The

allowance is subject to an income ceiling of £47,396 a year.

Adult disablement allowance: Payable to persons who are

congenitally disabled and have no contribution record.

Child disablement allowance: Payable to severely disabled

children under age 16 who are not disabled enough to qualify

for attendance allowance.

Survivor allowance: Paid for the first year of widowhood if

the deceased met the coverage requirements for the old-age

pension. The surviving spouse or the insured was younger

than the pensionable age at the time of the insured’s death.

Survivor pension: The deceased met the coverage

requirements for the old-age pension or was a pensioner at the

time of death. The pension is paid when entitlement to the

survivor allowances ceases, up to age 65 when it is converted

to an age-related pension.

Death grant: The deceased must have paid 1 year of

contributions.

Old-Age Benefits

Old-age pension: The full pension is £140.84 a week for a

single person; £233.80 for a married couple.

Partial pension: A reduced pension is paid. The insured must

have at least 10% of the full contribution record.

Early pension: The pension is actuarially reduced.

Benefit adjustment: Pensions are adjusted annually according

to changes in the earnings index.

Permanent Disability Benefits

Disability pension: £140.84 a week.

Dependent supplement: An additional £92.96 a week is paid

for an adult dependent.

Attendance allowance (income-tested): £379.83 a month.

Invalid care allowance (income-tested): £609.84 a month.

Adult disablement allowance: £312.07 a month.

Child disablement allowance: £207.97 a month.

Benefit adjustment: Benefits are adjusted annually according

to a formula reflecting changes in the earnings index and retail

price index.

Survivor Benefits

Survivor allowance: £169.05 a week for the first year of

widowhood.

Survivor pension: The full pension is £140.84 a week and

payable when entitlement to survivor allowance ceases.
SSPTW: Europe, 2004 ♦ 133

Jersey

Death grant: £563.36.

Benefit adjustment: Benefits are adjusted annually according

to changes in the earnings index.

Administrative Organization

Employment and Social Security Department administers the

program.

Sickness and Maternity

Regulatory Framework

First law: 1951.

Current law: 1974.

Type of program: Social insurance (cash benefits) and

universal (medical care) system.

Coverage

Cash benefits: Employed and self-employed persons.

Medical care: All residents.

Source of Funds

Insured person

Cash benefits: See source of funds under Old Age, Disability,

and Survivors, above.

Health insurance: 0.8% of earnings.

Hospital care: None.

Self-employed person

Cash benefits: See source of funds under Old Age, Disability,

and Survivors, above.

Health insurance: 2% of earnings.

Hospital care: None.

Employer

Cash benefits: See source of funds under Old Age, Disability,

and Survivors, above.

Health insurance: 1.2% of payroll.

Hospital care: None.

Government

Cash benefits: None.

Health insurance: None.

Hospital care: Total cost.

The maximum monthly earnings for contribution purposes are

£2,884.

Qualifying Conditions

Sickness benefit: Three months of contributions before the

claim for benefit; has paid contributions in the calendar quarter

6 months before the claim.

Maternity allowance: Women must have paid 13 weeks of

contributions and also have paid contributions in the relevant

quarter, which is 1 year before the expected date of birth.

Maternity grant: One year of contributions by either the

husband or wife.

Medical benefits: General practitioner care requires 6 months

of residence.

Sickness and Maternity Benefits

Sickness benefit: £140.84 a week for 1 year.

Dependent supplement: An additional £92.96 a week is paid

for an adult dependent.

Maternity allowance: £140.84 for up to 18 weeks, starting

anytime from the 11th week before the expected date of birth.

Maternity grant: A lump sum of £422.52 (payable also to

adoptive parents).

Benefit adjustment: Benefits are adjusted annually according

to changes in the earnings index.

Workers’ Medical Benefits

The medical care provided by hospitals is free of charge.

Cost sharing: The cost of general practitioner care varies

between practices, but the government subsidizes each

consultation by £13, and the cost of each prescription of

pharmaceuticals is limited to £1.95 an item. Low-income

families are exempted from the cost of some medical care

services.

Dependents’ Medical Benefits

Same as workers’ medical benefits, above.

Administrative Organization

Employment and Social Security Department administers social

security and health insurance.

Department of Health and Social Services administers hospital

treatment.

Work Injury

Regulatory Framework

First law: 1930.

Current law: 1974.

Type of program: Social insurance system.
134 ♦ SSPTW: Europe, 2004

Jersey

Coverage

Employed and self-employed persons.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: See source of funds under Old Age, Disability,

and Survivors, above.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

The injury benefit is £140.84 a week, payable for 1 year.

Dependent supplement: £92.96 a week.

Benefit adjustment: Benefits are adjusted annually according

to changes in the earnings index.

Permanent Disability Benefits

Permanent disability pension: £140.84 a week.

Dependent supplement: An additional £92.96 a week is paid

for an adult dependent.

Attendance allowance: £422.52 a month.

Disablement gratuity: A lump sum is paid if the assessed

degree of disability resulting from the accident is less than

15%.

Workers’ Medical Benefits

See benefits under Sickness and Maternity, above.

Survivor Benefits

Survivor allowance: Paid for the first year of widowhood if

the deceased met the coverage requirements for the old-age

pension. The surviving spouse or the insured was younger

than the pensionable age at the time of the insured’s death.

Survivor pension: The deceased met the coverage

requirements for the old-age pension. The pension is paid

when entitlement to the survivor allowance ceases, up to

age 65 when it is converted to an age-related pension.

Special rules apply for widows.

Benefit adjustment: Benefits are adjusted annually according

to changes in the earnings index.

Administrative Organization

Employment and Social Security Department administers social

insurance benefits.

Department of Health and Social Services administers hospital

treatment.

Unemployment

Regulatory Framework

First and current law: 1930.

Type of program: Social assistance system.

Coverage

Five years’ residence in Jersey.

Source of Funds

Insured person: None.

Employer: None.

Government: Local taxes and general revenue.

Qualifying Conditions

Must be actively seeking employment and be involuntarily

unemployed.

Unemployment Benefits

The benefit is means-tested and dependent on individual

circumstances including the level of rent paid. The assessment

of an individual’s claim to benefit is undertaken at the local

(parish) level.

Administrative Organization

The program is administered by 12 separate parish authorities

and coordinated by the Committee of Constables.

Family Allowances

Regulatory Framework

First and current law: 1972.

Type of program: Universal system.

Coverage

Residents with one or more children.
SSPTW: Europe, 2004 ♦ 135

Jersey

Source of Funds

Insured person: None.

Employer: None.

Government: Total cost.

Qualifying Conditions

Family allowances: Child is under age 16 or in full-time

education in Jersey.

Family Allowance Benefits

Family allowances: The allowance is assessed in relation to

the previous year’s income tax return, with the maximum rate

being paid for children in a family whose income was less than

£6,950 in the previous year.

The maximum allowance is £2,916 a year for the first child,

£2,490 for the second child, and £2,355 for each subsequent

child.

Administrative Organization

Employment and Social Security Department administers the

program.
136 ♦ SSPTW: Europe, 2004

Latvia

Latvia

Exchange rate: US$1.00 equals 0.53 lats.

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1922.

Current laws: 1995, 1996, 1998, and 2001.

Type of program: Notional defined contribution (NDC) social

insurance and mandatory individual accounts system.

Note: Membership of an individual account is mandatory for

individuals who were under age 30 in 2001 and voluntary for

those who were between ages 30 and 49 in 2001.

Coverage

Old-age and survivor pensions: Employed persons, selfemployed persons, active military personnel, individuals caring

for children less than 18 months old, unemployed persons,

diplomatic staff spouses, and sickness and maternity benefit

recipients.

Voluntary coverage is possible.

Disability pension: Employed and self-employed persons.

Source of Funds

Insured person

NDC: Included in the employer contribution.

Individual account: 2% of earnings, rising gradually to 10% by

2010.

Employer

NDC: 18% of payroll, decreasing gradually to 10% by 2010

(includes the employee contribution).

Individual account: None.

Government: Contributes for active military personnel,

individuals caring for children less than 18 months old, and

spouses of diplomatic staff.

Qualifying Conditions

Old-age pension: Age 62 (men) or age 59.5 (women) with

10 years of insurance. The age requirement for women will

increase by 6 months each year to age 62 by 2009.

Early pension: Age 60 (men) or age 57.5 (women) with 30 years

of insurance. Employment must cease.

Disability pension: Three years of insurance.

Survivor pension: The deceased was insured or was a

pensioner at the time of death.

Old-Age Benefits

Old-age pension

NDC: The amount of the insured’s contributions plus annual

capital growth adjusted according to changes in the earnings

index divided by the average remaining life expectancy.

The minimum pension is equal to the state social security

benefit of 35 lats. The minimum pension is increased by 1.1%

for an insurance period of at least 20 years; by 1.3% for an

insurance period of 20 to 30 years; and by 1.5% for an

insurance period of more than 30 years.

Early pension: Equal to 80% of the old-age pension until the

insured reaches the statutory retirement age; thereafter, the full

amount is paid.

Individual account: The pension is based on the amount of

the insured’s contributions plus annual capital growth. At

retirement, the insured can purchase an annuity or have the

funds transferred to his or her NDC account.

Permanent Disability Benefits

Disability pension: The disability pension is paid according

to three categories of disability.

Category I: 0.45 times the average wage in 3 consecutive years

in the last 5 years, plus the average wage times the ratio of

actual contribution years to total possible number of years

between age 15 and retirement.

The minimum pension is 1.6 times the minimum state social

security benefit.

Category II: 0.4 times the average wage in 3 consecutive years

in the last 5 years, plus the average wage times the ratio of

actual contribution years to total possible number of years

between age 15 and retirement.

The minimum pension is 1.4 times the minimum state social

security benefit.

Category III: The minimum state social security benefit

(35 lats).

Survivor Benefits

Survivor pension: 50% of the insured’s potential old-age

pension for one survivor; 75% for two; 90% for three or more.

The pension is payable to children and dependent brothers,

sisters, and grandchildren. The full-orphan’s pension is based

on the potential old-age pensions of both parents.

The minimum survivor pension is equal to the state social

security benefit.

Administrative Organization

Ministry of Welfare handles general supervision.

State Social Insurance Agency and its local offices grant and

pay cash benefits.
SSPTW: Europe, 2004 ♦ 137

Latvia

Sickness and Maternity

Regulatory Framework

First law: 1924.

Current law: 1995.

Type of program: Social insurance system.

Coverage

Sickness and maternity benefits: Employed and selfemployed persons.

Medical benefits: All permanent residents.

Source of Funds

Insured person and employer: 2.37% of payroll.

Government: Finances minimum health care services.

Qualifying Conditions

Cash and medical benefits: There is no minimum qualifying

period.

Sickness and Maternity Benefits

Sickness benefit: 80% of average earnings. The benefit is

payable from the 15th day of incapacity for work until recovery

or, if declared permanently disabled, up to 52 weeks from day

of incapacity for work or 78 weeks within a 3-year period if the

incapacity for work recurs. The benefit is payable from the first

day if caring for a child younger than age 14.

The employer pays for the 2nd to the 14th day of incapacity.

Maternity benefit: 100% of average earnings. The benefit is

payable for 112 calendar days (56 days before and 56 days

after the expected date of childbirth); payable for 14 additional

calendar days for complications during pregnancy, delivery, or

postnatal period as well as for multiple births and in cases in

which medical care associated with pregnancy has been

started at a medical institution and continued before the

12th week of pregnancy.

Workers’ Medical Benefits

Benefits are provided by state-owned and private hospitals

under contract with a sickness fund. Benefits include general

and specialist care, medicines, hospitalization, maternity care,

and dental treatment.

Free treatment for maternity care, for persons with low income,

for persons suffering from certain infectious diseases, and for

emergency treatment.

Special provisions for victims of the Chernobyl catastrophe.

Cost sharing: Copayments are required for inpatient and

dental care; free dental care for children under age 18.

Dependents’ Medical Benefits

Insured in their own right.

Administrative Organization

Ministry of Welfare handles general supervision.

State Social Insurance Agency and its local offices grant and

pay cash benefits.

State Health Insurance Agency manages medical benefits.

Work Injury

Regulatory Framework

First law: 1927.

Current laws: 1995 and 1998.

Type of program: Social insurance system.

Coverage

Employed persons.

Source of Funds

Insured person: None.

Employer: 0.09% of payroll.

Government: Finances state-guaranteed health care services.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

80% of average earnings. The benefit is payable from the

15th day of incapacity for work until recovery or, if declared

permanently disabled, up to 52 weeks from day of incapacity

for work or 78 weeks within a 3-year period if the incapacity for

work recurs. The benefit is payable from the first day if caring

for a child younger than age 14.

The employer pays for the 2nd to the 14th day of incapacity.

Permanent Disability Benefits

A percentage of the insured’s average monthly earnings

depending on the loss of earning capacity: 80% for a 100%

loss of earning capacity, 75% for a loss of 90% to 99%, and

70% for a loss of 80% to 89%. The benefit decreases by 5% for

each successive reduced degree of disability, down to a

minimum of 25% for a loss of 10% to 14%.
138 ♦ SSPTW: Europe, 2004

Latvia

Workers’ Medical Benefits

Same as for sickness benefit, plus reimbursement for additional

expenses for medical treatment, nursing care, prosthesis, travel

expenses, and occupational rehabilitation.

Survivor Benefits

Survivor pension: 25% of the insured’s average monthly

earnings for one survivor, up to 35% for two, up to 45% for

three, and up to 55% for four or more.

A higher percentage is paid for orphans.

Eligible survivors: Children and dependent brothers, sisters,

grandchildren, surviving spouse, parents, and grandparents.

Administrative Organization

Ministry of Welfare handles general supervision.

State Social Insurance Agency and local insurance offices

grant and pay insurance-based and related benefits.

Unemployment

Regulatory Framework

First law: 1991.

Current law: 1999.

Type of program: Social insurance system.

Coverage

Employed and self-employed persons, active military

personnel, and individuals taking care of children under

age 18 months.

Source of Funds

Insured person and employer: 1.89% of payroll.

Government: Contributes for active military personnel and for

individuals taking care of children under age 18 months.

Qualifying Conditions

Unemployment benefit: Registration at a state employment

office, total insurance contributions for not less than 1 year,

and 9 months of insurance contributions in the 12 months

before unemployment.

Unemployment Benefits

The benefit is based on the length of insurance contributions

and the length of unemployment: 50% of earnings is paid with

1 to 9 years of insurance, 55% with 10 to 19 years, 60% with 20

to 29 years, 65% with over 30 years. The full amount is paid for

the first 3 months, 75% for 3 to 6 months, and 60% for 6 to

9 months.

Administrative Organization

Ministry of Welfare handles general supervision.

State Social Insurance Agency and local insurance offices

grant and pay benefits.

State Employment Service and local employment offices handle

placement, training, and retraining.

Family Allowances

Regulatory Framework

First law: 1990.

Current laws: 1995 and 1998.

Type of program: Universal system.

Coverage

Permanent residents with a child of prescribed age.

Source of Funds

Insured person: None.

Employer: None.

Government: Total cost.

Qualifying Conditions

Family allowances: Child under age 15; age 20 if at

secondary school.

Family Allowance Benefits

Family allowances: 20% of the monthly minimum state social

security benefit for the first child, 1.2 times the amount

awarded for the first child for the second, 1.6 times for the

third, and 1.8 times for the fourth and subsequent children.

The minimum state social security benefit is 35 lats.

Administrative Organization

Ministry of Welfare handles general supervision.

State Social Insurance Agency and local insurance offices

grant and pay benefits.
SSPTW: Europe, 2004 ♦ 139

Liechtenstein

Liechtenstein

Exchange rate: US$1.00 equals 1.27 Swiss francs.

Old Age, Disability, and Survivors

Regulatory Framework

First and current laws: 1954 (old age and survivors), 1960

(disability), and 1989 (mandatory occupational pensions).

Type of program: Social insurance and mandatory

occupational pension system.

Coverage

Social insurance: All residents and employed and selfemployed nonresidents.

Mandatory occupational pension: All public and privatesector employees with annual earnings above 25,320 francs (in

2003). Coverage is mandatory from age 23 for old-age benefits

if the employment contract exceeds 9 months and from age 17

for disability and survivor benefits regardless of the duration

of the employment contract.

Voluntary coverage is possible for excluded employees and the

self-employed.

Source of Funds

Social insurance

Insured person: Employees contribute 3.8% of salary (old age

and survivors), plus 0.6% (disability).

Self-employed person: 7.6% of income (old age and

survivors), plus 1.2% (disability). The self-employed pay an

additional 4% of their individual contribution amount for

administrative costs.

Nonemployed person: Variable contributions depending on

assets and income. The nonemployed pay an additional 4% of

their individual contribution amount for administrative costs.

Employer: 3.8% of the payroll (old age and survivors), plus

0.6% (disability), plus an additional 4% of the employer

contribution amount for administrative costs.

Government: 20% of annual expenditure, plus 2/3 of income

from the Heavy Vehicle Fee (old age and survivors) and any

deficit up to 50% of annual expenditure (disability).

Mandatory occupational pension

Insured person: The combined insured person and employer

contribution must be no less than 10% of the covered salary.

Normally, the covered salary includes earnings between

12,660 francs and 75,960 francs (in 2003).

Employer: The combined insured person and employer

contribution must be no less than 10% of the covered salary.

Normally, the covered salary includes earnings between

12,660 francs and 75,960 francs (in 2003).

Government: None.

Qualifying Conditions

Old-age pension

Social insurance old-age pension: Age 64 (men) or age 63

(women) with 1 year of contributions. The pensionable age for

women will increase to age 64 by 2009.

Early pension: Age 60 (men and women).

Mandatory occupational old-age pension: Age 64 (men and

women).

Early pension: Age 60 (men and women) if eligible for a social

insurance early pension.

Disability pension

Social insurance disability pension: For a full pension, a

permanent loss of at least 66.6% of work capacity and 1 year of

contributions.

Partial pension: For a half pension, a 50% to 66.6% reduction

in the capacity to work and 1 year of contributions. For a

quarter pension, a 40% to 49% reduction in the capacity to

work and 1 year of contributions.

Mandatory occupational disability pension: The onset of

disability is before the pensionable age for the old-age

pension. The degree of disability is assessed in relation to the

loss in earning capacity. The pension ceases when the insured

reaches retirement age.

Survivor pension

Social insurance survivor pension: The insured had 1 year of

contributions.

Mandatory occupational survivor pension: Survivor benefits

are paid to the insured’s spouse and orphans under age 18

(age 25 if a student, no limit if disabled). The pension ceases

when the deceased would have attained retirement age.

Old-Age Benefits

Old-age pension

Social insurance old-age pension: For a full pension based

on a complete insurance period for the age cohort (defined by

the year of birth), the pension is between 1,055 francs and

2,110 francs a month depending on the yearly average earnings

during the total insurance period.

The yearly average earnings are calculated on the basis of

employment income, contributions made while nonemployed,

and recognized care-giving periods for children or persons in

need of care. If married, the yearly average earnings are

divided equally between both partners for the marriage period.

Child supplement: 40% of the old-age pension for each child

under age 18 (age 25 if a student or in vocational training).
140 ♦ SSPTW: Europe, 2004

Liechtenstein

Partial pension: Awarded for an incomplete contribution

period.

Early pension: The reduced value of the pension depends on

when the pension is first drawn. The rate at which the early

pension is reduced is lower for women born in, or before, 1951.

Deferred pension: The pension increase is from 5.22% for a

1-year deferral to 40.71% for the maximum deferral of 6 years.

Christmas bonus: 100% of the monthly pension, payable in

December.

Benefit adjustment: Periodic adjustment of pensions for

changes in the consumer price index and wage index (in

principle, every 2 years). If the price index increases by more

than 4% in a year, the adjustment may be brought forward.

Mandatory occupational old-age pension: Benefits may be

paid as a pension for life or as a lump sum, depending on plan

regulations.

The minimum pension is based on the insured’s accumulated

capital and the annuity rate of the pension institution. Annuity

rates are defined by plan regulations.

Benefit adjustment: Pensions are adjusted according to the

financial situation of each institution.

Permanent Disability Benefits

Disability pension

Social insurance disability pension: The full pension is based

on a complete insurance period for the age class (defined by

the year of birth). If the level of disability is at least 66.6%

(total disability), the pension is between 1,055 francs and

2,110 francs a month depending on yearly average earnings

during the total insurance period.

The yearly average earnings are calculated based on

employment income, contributions made while nonemployed,

and for recognized care-giving periods for children or persons

in need of care. If married, the yearly average earnings are

divided equally between both partners for the marriage period.

Partial disability: If the level of disability is between 50% and

66%, the award is 50% of the full pension; if the level of

disability is between 40% and 49%, the award is 25% of the full

pension.

Child supplement: 50% of the disability pension for each child

under age 18 (age 25 if a student or in vocational training).

Partial pension: Awarded for an incomplete contribution

period.

Christmas bonus: 100% of the monthly pension, payable in

December.

Benefit adjustment: Periodic adjustment of pensions for

changes in the consumer price index and wage index (in

principle, every 2 years). If the price index increases by more

than 4% in a year, the adjustment may be brought forward.

Mandatory occupational disability pension: Benefits may be

paid as a pension or as a lump sum, depending on plan

regulations. The full pension must be at least equal to 30% of

covered earnings.

Partial disability: A reduced pension is paid for a partial

disability.

Dependent supplement: 6% of covered earnings for each child

under age 15 (age 25 if a student, no limit if disabled).

Benefit adjustment: Pensions are adjusted according to the

financial situation of each institution.

Survivor Benefits

Survivor pension

Social insurance survivor pension: The full pension is based

on a complete insurance period for the age cohort (defined by

the year of birth) and is 80% of the deceased’s hypothetical

pension. The full pension is payable to a widow(er) with

children, as well as to a widow(er) without children but who is

aged 45 or older at the time of the insured’s death and who was

married to the insured for at least 5 years.

In cases in which the age and marriage qualifying conditions

are not met in full, a pension is paid for a limited period of 2 to

5 years (according to the age of the surviving spouse and the

duration of the marriage).

Partial pension: Awarded in cases in which the insured had an

incomplete contribution period.

Social insurance orphan’s pension: 40% of deceased’s

hypothetical pension is paid for each orphan under age 18

(age 25 if a trainee or a student).

Partial pension: Awarded in cases in which the insured had an

incomplete contribution period.

Benefit adjustment: Periodic adjustment of pensions for

changes in the consumer price index and wage index (in

principle, every 2 years). If the price index increases by more

than 4% in a year, the adjustment may be brought forward.

Mandatory occupational survivor pension: Benefits may be

paid as a pension or as a lump sum, depending on plan

regulations. The survivor pension must be at least equal to

18% of covered earnings for the spouse and 6% of covered

earnings for each orphan. The pension ceases when the

insured would have attained retirement age, with the surviving

spouse receiving a lump sum equal to the value of the

insured’s vested old-age pension rights.

Benefit adjustment: Pensions are adjusted according to the

financial situation of each institution.

Administrative Organization

Social insurance: Old Age, Survivor, and Disability

Insurance Institute administers the program.

Mandatory occupational pension: Mandatory occupational

pension plans are administered by private pension institutions

under government supervision.

Office for Economy supervises and regulates pension

institutions and ensures compliance with legal requirements.
SSPTW: Europe, 2004 ♦ 141

Liechtenstein

Sickness and Maternity

Regulatory Framework

First law: 1910.

Current laws: 1971 (sickness) and 1981 (maternity).

Type of program: Social insurance (cash benefits) and

universal (medical benefits) system.

Coverage

Cash benefits: Employed persons.

Voluntary insurance for other defined categories.

Medical benefits: All residents and persons employed in

Liechtenstein.

Source of Funds

Insured person: A variable percentage of salary (the average

is between 1.5% and 2%) or a fixed sum.

Employer: A variable percentage of payroll (the average is

between 1.5% and 2%).

Government: Varying contributions are made toward the cost

of medical benefits payable to health insurance funds

according to the age and gender makeup of each fund.

The maximum annual earnings for contribution and benefit

purposes are 106,800 francs.

Qualifying Conditions

Cash sickness benefit: Membership in a health insurance

fund.

Cash maternity benefit: 270 days of membership in a health

insurance fund without interruptions of longer than 3 months.

Sickness and Maternity Benefits

Sickness benefit: 80% of covered earnings. The benefit is

paid after a 2-day waiting period for a total of 720 days in

900 consecutive days.

The maximum sickness benefit is 267 francs a day.

Maternity benefit: 80% of covered earnings is payable for

20 weeks, of which at least 16 weeks are after the expected date

of childbirth.

The maximum maternity benefit is 267 francs a day.

Workers’ Medical Benefits

Provided by approved doctors, public hospitals, private

hospitals, and clinics contracted with health insurance funds

and by recognized sanitoriums.

Medical benefits include primary and specialist treatment,

hospitalization, pharmaceuticals, maternity care, and

convalescence.

Cost sharing: Cost sharing by patients includes a set fee of up

to 800 francs per calendar year and a 10% copayment for all

costs exceeding the set fee. Cost-sharing rates are halved for

pensioners and adolescents over age 15 but under age 20; no

cost sharing for children under age 16 or for preventive and

maternity care.

There is no limit to duration.

Dependents’ Medical Benefits

Same as for the insured person. Individuals are insured in their

own right because they have separate insurance coverage.

Administrative Organization

Registered Compulsory Health Insurance Funds administer

contributions and benefits.

Work Injury

Regulatory Framework

First law: 1910.

Current law: 1989.

Type of program: Social insurance system.

Coverage

Employed persons.

Voluntary coverage for the self-employed.

Source of Funds

Insured person: Employed persons make no contributions.

Self-employed person: A contribution according to the

extent of coverage and the assessed degree of risk.

Employer: Premiums according to the assessed degree of risk.

Government: None.

The maximum annual earnings for contribution and benefit

purposes are 106,800 francs.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

80% of earnings, covered up to a maximum of 106,800 francs a

year. The benefit is payable after a 2-day waiting period.

The maximum benefit is 293 francs a day.

Permanent Disability Benefits

80% of earnings, covered up to a maximum of 106,800 francs a

year for total disability.
142 ♦ SSPTW: Europe, 2004

Liechtenstein

Partial disability: A percentage of the full pension according to

the degree of disability.

There is no minimum limit for each level of disability (in

practice, 10% is the minimum limit).

Constant-care allowance: The value of the allowance

depends on the level of dependency and care required.

Physical integrity damage grant: Cash lump sum depending

on the degree of damage.

Workers’ Medical Benefits

Expenses are covered in full.

There is no limit to duration.

Survivor Benefits

Survivor pension: 40% of earnings, covered up to a maximum

of 106,800 francs a year. The pension is payable to a surviving

widow(er) or to a divorced spouse (if the deceased was

required to pay maintenance) if he or she has dependent

children, is at least 2/3 disabled, or is aged 45 or older.

Orphan’s pension: 15% of earnings (25% for a full orphan),

covered up to a maximum of 106,800 francs a year. The pension

is payable for each child under age 18 (under age 25 if a

student).

The maximum survivor pension is 70% of the deceased’s

covered earnings (90% if a divorced spouse is also receiving a

survivor pension). If survivors are eligible for pensions under

the Old Age, Disability, and Survivor program and if the

survivor benefit under work injury is higher, only the

differential amount is paid. Beneficiaries receive cost-of-living

allowances that are incorporated into the pension.

Benefit adjustment: As a general rule, pensions are adjusted

every 2 years.

Survivor allowance: Payable to a surviving spouse or to a

divorced or separated spouse who has no right to a pension.

The allowance is a variable lump sum, depending on the

duration of marriage (from 1 to 5 times the annual pension).

Administrative Organization

Registered Compulsory Accident Insurance Funds administer

contributions and benefits.

Unemployment

Regulatory Framework

First and current law: 1969.

Type of program: Social insurance system.

Coverage

Employed persons.

Source of Funds

Insured person: 0.25% of salary.

Employer: 0.25% of payroll.

Government: Under certain conditions the government

covers up to 20% of the cost of benefits. The government also

meets up to 20% of the cost of any deficit.

The maximum annual earnings for contribution and benefit

purposes are 97,200 francs.

Qualifying Conditions

Unemployment benefit: Six months of insurance coverage.

The insured is available for work and satisfies any other

necessary requirements.

Unemployment Benefits

80% of daily covered earnings. The daily benefits are payable

for 250 days (400 days for unemployed persons aged 50 to 59

and 500 days for those aged 60 to 64) in a 2-year period.

Dependent supplement: 10 francs a day for one dependent;

5 francs a day for each additional dependent.

The maximum benefit is 85% of daily covered earnings.

Administrative Organization

National Unemployment Insurance Fund administers

contributions and benefits.

Family Allowances

Regulatory Framework

First law: 1958.

Current law: 1986.

Type of program: Social insurance system.

Coverage

All residents and nonresident employees and self-employed

persons.

Source of Funds

Insured person: Employed persons make no contributions.

Self-employed person: 2.1% of gross earnings. The selfemployed pay an additional 4% of their individual contribution

amount for administrative costs. (The nonemployed make

variable contributions depending on their assets and income

and pay an additional 4% of their individual contribution

amount for administrative costs.)

Employer: 2.1% of payroll and an additional 4% of their

contribution amount for administrative costs.

Government: Any eventual deficit.
SSPTW: Europe, 2004 ♦ 143

Liechtenstein

Qualifying Conditions

Family allowance: Children under age 18.

Family Allowance Benefits

Family allowances: 260 francs a month per child for the first

two children if under age 11; 310 francs per child for the first

two children over age 10; 310 francs per child for the third and

each subsequent child.

Single-parent allowance: 100 francs a month per child

(payable in addition to family allowances).

Birth grant: 2,100 francs per child; 2,600 francs per child for

multiple births.

If eligible parents receive family allowances from another

country that are paid at a rate lower than those paid in

Liechtenstein, only the difference between the amounts is

payable.

Administrative Organization

National Family Allowances Fund administers contributions

and benefits.
144 ♦ SSPTW: Europe, 2004

Lithuania

Lithuania

Exchange rate: US$1.00 equals 2.78 litas (Lt).

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1925.

Current laws: 1956, 1994, and 2003.

Type of program: Social insurance system.

Note: As of January 1, 2004, employees can allocate a portion

of their social security contribution equal to 2.5% of total

income to an individual account. The portion of the social

security contribution that can be allocated will increase by 1%

a year until it reaches 5.5% in 2007.

Coverage

Insured workers and permanent residents.

Source of Funds

Insured person: 2.5% of wage.

Employer: 23.4% of payroll.

Government: Any deficit. In addition to pensions, the state

social insurance budget finances the other social insurance

programs.

Qualifying Conditions

Old-age pension: Age 62.5 (men) and age 59 (women). (The

pensionable age for women will gradually increase to age 60 by

2006.)

Early pension: Up to 5 years before the normal retirement age

with 30 years of insurance and after 1 year of unemployment

(beginning July 1, 2004).

Disability pension: Disability involving either a permanent or

prolonged incapacity for work. Depending on age, the insured

must have a minimal social insurance work record.

Survivor pension: The insured must have been a pensioner

or have been entitled to a disability pension at the time of

death.

Old-Age Benefits

Old-age pension: The basic pension is no less than 110% of

the poverty level. The supplementary pension is based on

years of coverage and the ratio of individual earnings to

national average earnings.

Early pension: The pension is reduced by 0.4% for each month

the pension is awarded before the normal retirement age

(beginning July 1, 2004).

Permanent Disability Benefits

Disability pension: The pension varies according to the

assessed degree of disability.

Survivor Benefits

Survivor pension: Paid to a spouse who has reached old age

or is disabled. The spouse receives 20% of the insured’s

pension.

Orphan’s pension: Orphans up to age 18 (age 24 if a student)

receive 25% of the insured’s pension each.

The total survivor pension must not exceed 80% of the

insured’s pension.

Administrative Organization

Ministry of Social Security and Labor is responsible for the

program.

State Social Insurance Fund Council (composition determined

by the government).

State Social Insurance Fund Board, and its territorial social

insurance departments, administers cash benefits.

Sickness and Maternity

Regulatory Framework

First law: 1925.

Current laws: 1991 and 2000.

Type of program: Social insurance and social assistance

(cash benefits) system and universal (medical care) system.

Coverage

Sickness and maternity benefits: Persons insured under

compulsory or voluntary social insurance.

Medical benefits: All residents.

Source of Funds

Insured person: 0.5% of wage.

Employer: 2.8% of payroll.

Government: Any deficit.

Qualifying Conditions

Sickness and maternity benefits: At least 3 months

coverage during the past 12 months; 6 months during the past

24 months. If an incomplete sickness or maternity social

insurance record is as a consequence of parental leave to care

for a child aged 1 to 3, a social insurance record is calculated

from 12 months prior to the leave commencing.
SSPTW: Europe, 2004 ♦ 145

Lithuania

Sickness and Maternity Benefits

Sickness benefit: 85% of the insured’s average

compensatory wage is paid after a 2-day waiting period. (The

employer pays at least 80% of the insured’s average wage for

the first 2 days.) The monthly benefit must not be less than

25% of the average wage in Lithuania.

Compensatory wage: The insured’s average wage for the last

3 months on which contributions have been paid. The

compensatory wage must not exceed 3.5 times the average

wage in Lithuania (as defined by the Department of Statistics).

Maternity benefit: 100% of the insured’s compensatory wage

for 70 calendar days before and 56 calendar days after the

expected date of childbirth. The benefit must not be less than

25% of average monthly insurable income.

Compensatory wage: The insured’s average wage for the last

3 months on which contributions have been paid. The

compensatory wage must not exceed 3.5 times the average

wage in Lithuania (as defined by the Department of Statistics).

Paid leave benefit (child care): Either parent may take official

leave from employment for up to 1 year to care for the newborn

infant and receive benefit equal to 60% of wages. The benefit

must not be less than 33% of average monthly insurable

income.

Workers’ Medical Benefits

Medical services are provided directly by government health

facilities. Benefits include the cost of medication for inpatient

treatment.

Cost sharing: Part of the cost of medication for outpatient

treatment for insured persons is covered by the state social

insurance budget.

Dependents’ Medical Benefits

Same as for the family head (see medical benefits, above).

Administrative Organization

Ministry of Social Security and Labor is responsible for the

cash benefit program.

Ministry of Health is responsible for medical benefits.

State Social Insurance Fund Board, and its territorial social

insurance departments, administers cash benefits.

Local authorities.

Work Injury

Regulatory Framework

First law: 1991.

Current laws: 1991 and 1999.

Type of program: Social insurance system.

Coverage

Wage earners.

Source of Funds

Insured person: None.

Employer: 0.3% of payroll.

Government: None.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

100% of wages is payable until the resumption of work

capacity or the determination of disability.

Permanent Disability Benefits

Permanent disability benefit: The benefit varies according to

the assessed degree of disability.

Survivor Benefits

Survivor pension: Paid to a spouse who has reached old age

or is disabled. The spouse receives 20% of the insured’s total

pension.

Orphan’s pension: Orphans up to age 18 (age 24 if a student)

receive 25% of the insured’s pension each.

The total survivor pension must not exceed 80% of the

insured’s pension.

Administrative Organization

Ministry of Social Security and Labor is responsible for the

program.

State Social Insurance Fund Board, and its territorial social

insurance departments, administers cash benefits.

Unemployment

Regulatory Framework

First law: 1919.

Current laws: 1991, 1996, and 2003.

Type of program: Social insurance system.

Coverage

Employed persons.

Source of Funds

Insured person: None.

Employer: 1.5% of payroll.
146 ♦ SSPTW: Europe, 2004

Lithuania

Government: Allocations from the state budget in case of a

deficit.

Qualifying Conditions

Unemployment benefit: Must have 24 months of

contributions in the last 3 years (to be decreased to 18 months

of contributions in the last 3 years by 2005).

Unemployment Benefits

The amount of benefit depends on the insured’s coverage

record and the reason for job loss. The benefit is payable from

the eighth day after registration but for no more than 6 months

in any 12-month period.

The minimum benefit is the government-set state-supported

income (135 Lt).

The maximum benefit is twice the minimum standard of living

(250 Lt).

Administrative Organization

Ministry of Social Security and Labor is responsible for the

program.

Employment Exchange of Lithuania, comprising the national

and territorial employment exchanges, administers cash

benefits.

Unemployment Fund collects contributions.

Family Allowances

Regulatory Framework

First law: 1990.

Current laws: 1990, 2000, and 2003.

Type of program: Social assistance system.

Coverage

Resident families.

Source of Funds

Insured person: None.

Employer: None.

Government: Total cost is financed by state and municipal

budgets.

Qualifying Conditions

Family allowances: Low-income families.

Family Allowance Benefits

Social pension: Pensions are provided to low-income families

who satisfy a means-test.

Small grants: Subject to conditions, grants may be provided

to low-income families. Grants are not subject to a means test.

Administrative Organization

State Social Insurance Fund Board and its territorial social

insurance departments administer cash benefits.
SSPTW: Europe, 2004 ♦ 147

Luxembourg

Luxembourg

Exchange rate: US$1.00 equals 0.80 euros (€).

Old Age, Disability, and Survivors

Regulatory Framework

First laws: 1911 (wage earners) and 1931 (salaried employees).

Current laws: 1987 (unified pension insurance scheme); and

1989 (pension schemes coordination), implemented January

1990.

Type of program: Social insurance system.

Coverage

All economically active persons in the private and public

sectors, including self-employed persons.

General system for the private sector.

Separate special systems for railway and public-sector

employees who entered employment before January 1, 1999, or

on or after January 1, 1999, respectively.

Source of Funds

Insured person: 8% of earnings.

Employer: 8% of payroll.

Government: 8% of earnings.

The minimum monthly earnings for contribution and benefit

calculation purposes are equal to the social minimum wage

(€1,402.96).

The maximum monthly earnings for contribution and benefit

calculation purposes are equal to five times the social minimum

wage (€7,014.79).

Qualifying Conditions

Old-age pension: Age 65 (men and women) with 120 months

of mandatory, voluntary, or deemed coverage.

Early pension: Age 60 with 480 months of paid or deemed

coverage, including at least 120 months of mandatory

coverage; age 57 with 480 months of paid coverage.

Retirement is necessary.

Deferred pension: Retirement may be deferred to age 68; a

partial pension, combined with part-time employment, is also

possible.

Disability pension: Under age 65 and unable to perform the

usual occupation or any other similar occupation; 12 months of

coverage during the 3 years before the onset of disability.

There is no minimum qualifying period in case of disability

resulting from an accident.

Survivor pension: The insured had 12 months of coverage in

the 3 years before death or was a pensioner at the time of

death. The pension is payable to the spouse, including a

divorced spouse, on the basis of years of marriage and number

of contributions without regard to either personal income or

orphans; also payable to orphans.

Old-Age Benefits

Old-age pension: The pension comprises two elements: a

flat-rate component of €329.75 a month if insured for 40 years

and an annual increment equal to 1.85% of adjusted lifetime

covered earnings.

Partial pension: The flat-rate component of the pension is

reduced by 1/40 for each year of insurance less than 40.

The minimum pension is €1,262.88 a month, if insured for

40 years. The minimum pension is reduced by 1/40 for each

year less than 40. A minimum pension is not payable if insured

for less than 20 years.

The maximum pension is €5,846.66 a month.

Benefit adjustment: Benefits are automatically indexed to

changes in the cost of living and are periodically adjusted

according to changes in wages.

Permanent Disability Benefits

Disability pension: A flat-rate component of €329.75 a month

if insured for 40 years plus an annual increment equal to 1.85%

of adjusted lifetime covered earnings.

The disability pension also includes prospective insurance. If

disability occurs before age 55, an additional increment is

calculated for the period between the date of the onset of

disability and age 55 on the insured’s imputed average

earnings from age 25 to the date of the onset of disability.

Partial pension: The flat-rate benefit is reduced by 1/40 for

each year less than 40.

The minimum disability pension is €1,262.88 a month if the

insured has 40 years of effective or prospective insurance.

Benefit adjustment: Benefits are automatically indexed to

changes in cost of living and are periodically adjusted

according to changes in wages.

Survivor Benefits

Survivor pension: Based on the old-age pension, the pension

is equal to 100% of the flat-rate benefit plus 75% of the

insured’s annual increment. The concurrent drawing of a

survivor pension and earnings or other personal pension is

subject to a limit.

Orphan’s pension: Based on the old-age pension, the

pension is equal to 33% of the flat-rate benefit plus 25% of the

insured’s annual increment. Full orphans receive a double

pension.

The maximum total survivor pension is 100% of the insured’s

pension.
148 ♦ SSPTW: Europe, 2004

Luxemborg

Benefit adjustment: Benefits are automatically indexed to

changes in cost of living and are periodically adjusted

according to changes in wages.

Administrative Organization

Ministry of Social Security provides general supervision.

Managed by an employee-employer governing body and

chaired by a government official, the Old Age and Invalidity

Insurance Institution administers the program for wage

earners.

Managed by an employee-employer governing body and

chaired by a government official, the Private Salaried

Employees’ Pension Fund administers the program for salaried

employees.

Managed by a governing body made up of representatives of

the various self-employed groups, the Pension Fund for Selfemployed Artisans, Merchants, and Manufacturers administers

the program for self-employed persons.

Managed by a governing body of representatives of the

agricultural profession, the Agricultural Pension Fund

administers the program for farmers.

Public Employees Administration administers the program for

civil servants.

Sickness and Maternity

Regulatory Framework

First law: 1901.

Current law: 1992 (sickness insurance and health-sector

reform), implemented in January 1994.

Type of program: Social insurance system. Cash and medical

benefits.

Coverage

All employees and social security beneficiaries are eligible for

medical and dependency benefits.

Voluntary membership in the sickness fund for those without

compulsory coverage.

Special systems for self-employed persons, artisans, and

farmers (cash sickness and maternity benefits).

Source of Funds

Insured person: 4.9% (blue-collar workers) or 2.65% (whitecollar workers) of earnings. Pensioners contribute 2.55% of the

pension and an additional 1% of taxable income for

dependents.

Employer: 4.9% (blue-collar workers) and 2.65% (white-collar

workers) of payroll. Pension insurance institutions contribute

2.55% of pensions paid.

Government: Subsidies of around 37% of contributions. The

total cost of maternity allowances.

The maximum monthly earnings for contribution purposes are

five times the national minimum wage (€1,402.96).

Qualifying Conditions

Cash sickness, medical, and dependency benefits:

Membership in the sickness fund.

Cash maternity benefit and adoption leave: Membership in

the fund for at least 6 months in the year before the year of the

expected date of childbirth or the year of adoption.

Sickness and Maternity Benefits

Cash sickness benefit: 100% of earnings is payable for up to

52 weeks from the first day of incapacity.

Cash maternity benefit: 100% of earnings, payable for

8 weeks before and 8 weeks after the expected date of

childbirth (12 weeks in the case of a premature birth, multiple

births, or if the mother is breastfeeding her child).

Adoption leave: 100% of earnings is payable for 8 weeks on

the adoption of a child.

Maternity allowance: A lump sum of €2,954.77 is payable for a

16-week period to persons who have no loss of income while

on maternity leave.

Workers’ Medical Benefits

There is a free choice of service provider. Services are

provided by doctors and hospitals under collective

agreements, according to the established schedule of fees.

Medical benefits include general and specialist care,

hospitalization, laboratory services, maternity care, dental care,

appliances, medicines, transportation, and rehabilitation

services.

Cost sharing: In general, insurance covers the entire cost of

medical benefits, but the insured pays 20% for consultations;

5% for other ambulatory services; 5% for dental care up to a

limit of €41.33 a year; €9.31 a day for hospitalization; and

varying rates of 0%, 20%, or 60% of the cost of medicines.

Dependents’ Medical Benefits

Medical benefits for dependents: Same as for the insured

person.

Attendance benefits: Various services and cash benefits for

the provision of care by another person in order to permit an

individual to undertake routine daily activities. Cash benefits

are €24 per hour for care provided at home and €35.82 per hour

for care provided in an institution.

Administrative Organization

Ministry of Social Security provides general supervision.

Nine funds, each responsible for different occupational

categories, administer benefits. Elected committees composed
SSPTW: Europe, 2004 ♦ 149

Luxembourg

of representatives of insured persons and employers manage

the funds.

Sickness Fund Union administers dependency benefits.

Work Injury

Regulatory Framework

First law: 1902.

Current laws: 1925 (social insurance code).

Type of program: Social insurance system.

Coverage

Employees, apprentices, domestic workers, and self-employed

persons.

Special systems for public-sector employees, students, and

military personnel.

Source of Funds

Insured person: None (except for self-employed persons).

Employer: 0.66% to 6% of payroll, according to the assessed

degree of risk.

Government: Half of the cost of administration and one-third

of the cost of pension adjustments due to wage changes.

The maximum monthly earnings for contribution and benefit

purposes are €1,402.96.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

100% of earnings is payable from the first day of incapacity for

up to 13 weeks; thereafter, the benefit is converted to a

permanent disability pension.

Permanent Disability Benefits

85.6% of earnings during the last year.

Child supplement: 10% of the pension for each child under

age 18 (age 27 if a student, no limit if disabled) if the insured is

assessed as 50% or more disabled. The value of the total

supplement is not to exceed 100% of base salary.

Partial disability: A percentage of the full pension in

proportion to the assessed degree of disability. If the assessed

degree of disability is 10% or less, the pension is converted to

a lump sum after 3 years; or on request if the assessed degree

of disability is from 10% to 40%.

Benefit adjustment: Benefits are automatically indexed to

changes in cost of living and are periodically adjusted

according to changes in wages.

Workers’ Medical Benefits

All necessary care, including medical treatment and surgery,

hospitalization, medicines, appliances, and rehabilitation.

Survivor Benefits

Survivor benefit: 42.8% of the insured’s earnings (53.5% if

the insured was disabled) is payable to the widow(er).

Remarriage settlement: Entitlement to the survivor pension

ceases on remarriage, with a lump sum equal to 60 months’

earnings paid if the survivor is under age 50; 36 months’

earnings if aged 50 or older.

Orphan’s pension: 21.4% of earnings for each orphan under

age 18 (under age 27 if a student).

Other eligible survivors (in absence of the above): Parents,

grandparents, or the insured’s carer.

The maximum total survivor pension is 85.6% of the insured’s

earnings.

Funeral grant: A lump sum equal to 1/15 of the insured’s

annual earnings or the minimum wage, whichever is higher.

Benefit adjustment: Benefits are automatically indexed to

changes in the cost of living and are periodically adjusted

according to changes in wages.

Administrative Organization

Ministry of Social Security provides general supervision.

Accident Insurance Association administers the program for

workers in industry, agriculture, and forestry and also

administers the special systems.

Unemployment

Regulatory Framework

First law: 1921.

Current law: 1976 (full unemployment benefits).

Type of program: Social insurance system.

Coverage

Employed persons, self-employed persons under certain

conditions, recent graduates of schools, and persons aged 16

to 28 who have completed vocational training.

Source of Funds

Insured person: 2.5% (special solidarity tax).

Employer: None.

Government: The level of financing is set annually by

legislation.
150 ♦ SSPTW: Europe, 2004

Luxemborg

Qualifying Conditions

Unemployment benefit: The insured must have worked

26 weeks in the last 12 months; recent graduates must have

26 weeks of registered unemployment. Self-employed persons

must have 5 years of work, except for special cases. The

insured must be registered at the employment office, capable of

work, and be prepared to accept appropriate employment.

Unemployment is not due to voluntary leaving or the refusal of

a suitable job offer.

Unemployment Benefits

80% of the basis salary (85% if the insured has a dependent

child) during the last 3 months, up to 2.5 times the social

minimum wage (2 times after 182 days; 1.5 times after

365 days); young unemployed persons receive 70% of the

social minimum wage, and self-employed persons receive 80%.

The amount is reduced for unemployed persons living with

someone whose earnings exceed twice the social minimum

wage. The benefit is payable for up to 365 days in a 24-month

period. The entitlement period may be extended for 12, 9, or

6 months for older unemployed persons; additional extensions

are available for hard-to-place unemployed persons.

The basis salary is equal to gross earnings in the 3 months

before unemployment.

Benefit adjustment: Benefits are automatically indexed to

changes in the cost of living.

Administrative Organization

Ministry of Labor provides general supervision.

Employment Agency, through local offices, administers the

program and the payment of allowances.

Family Allowances

Regulatory Framework

First laws: 1947 (employed persons) and 1959 (self-employed

persons).

Current laws: 1977 (birth allowance); 1980 (maternity

allowance); 1985 (family allowance); 1986 (beginning of school

year allowance); 1988 (education allowance); and 1999

(parental leave).

Type of program: Universal system.

Coverage

All children raised and legally resident in the country.

Source of Funds

Insured person: None.

Employer: None.

Government: Total cost.

Qualifying Conditions

Family allowance: The child is under age 18 (age 27 if a

student).

Birth allowance: Evidence of prescribed medical examinations

and residence in Luxembourg.

Beginning of school year allowance: Payable to families

with one or more children aged 6 to 18 (age 27 if a student) who

are eligible for family allowances.

Child-rearing allowance: All residents rearing one or more

children under age 2 for whom they receive family allowances.

Parental leave allowance: The child is under age 5 and

receiving the family allowance, and the parent was living and

working in Luxembourg at the time of the child’s birth.

Family Allowance Benefits

Family allowances: €176.67 a month for one child, €419.50 a

month for two, €764.07 a month for three, €1,108.40 a month for

four, and €1,452,85 a month for five. In addition, €15.39 a

month for each child aged 6 to 11 and €46.18 a month for each

child aged 12 or older.

Supplementary allowance: €176.67 a month is added for a

seriously disabled child.

Birth allowances: €1,656.30 is payable in three equal

installments as prenatal allowance, birth grant, and postnatal

allowance.

Beginning of school year allowance: €107.70 for one child

over age 6 (€153.88 if over age 12), €184.67 per child if there are

two children over age 6 (€230.79 per child if over age 12), and

€261.58 per child if there are three or more children over age 6

(€307.77 per child if over age 12).

Child-rearing allowance: €461.65 a month.

Parental leave allowance: €1,692.66 a month, during a 6-

month period.

Benefit adjustment: All allowances are indexed to changes in

the cost of living.

Administrative Organization

Ministry of the Family provides general supervision.

National Family Allowance Fund administers allowances.
SSPTW: Europe, 2004 ♦ 151

Malta

Malta

Exchange rate: US$1.00 equals

0.34 Maltese lira (Lm).

Old Age, Disability, and Survivors

Regulatory Framework

First laws: 1956 (old age and survivors), 1965 (disability), and

1979 (earnings-related pension).

Current law: 1987.

Type of program: Social insurance system.

Coverage

Residents aged 16 or older, citizens employed outside Malta by

foreign employers having a place of business in Malta, and

students in certain work-study programs.

Exclusions: Married persons not gainfully employed, full-time

students, and persons older than age 65.

Source of Funds

Insured person: 10% of the basic wage; the minimum and

maximum weekly contributions are Lm 5.39 and Lm 12.98,

respectively (flat rate of Lm 2.84 a week if under age 18).

Self-employed person: Lm 9.61 to Lm 19.47 a week,

depending on net income from self-employment and other

sources.

Employer: 10% of payroll; minimum and maximum weekly

contributions for each employee are Lm 5.39 and Lm 12.98,

respectively (flat rate of Lm 2.84 a week for employees under

age 18).

Government: A sum equivalent to the value of 50% of total

contributions.

The maximum basic weekly wage (employed person) or weekly

net income (self-employed person) for contribution purposes is

Lm 129.77.

The maximum basic annual wage or net annual income for

payment of the earnings-related pension is Lm 6,748.04.

The maximum basic annual wage or net annual income for

pensionable income purposes if the employer also pays an

occupational service pension is Lm 6,750.

All of the above contributions also finance sickness, maternity,

work injury, unemployment, and family allowance benefits.

Qualifying Conditions

Old-age pension: Age 61 (men) or age 60 (women) with

156 weeks of paid contributions, including an annual average

of 50 weeks of paid or credited contributions.

Partial pension: A reduced pension is awarded if the annual

average is between 20 and 49 weeks of contributions under the

flat-rate pension scheme or between 15 and 49 weeks under the

earnings-related scheme.

Income test: Earned income from age 61 (men) or age 60

(women), whether through employment or self-employment,

must not exceed the national minimum wage (Lm 53.88 per

week) until age 65.

The old-age pension is payable abroad.

Old-age noncontributory pension: The insured does not

satisfy the contribution conditions for the old-age pension.

Disability pension: Total permanent incapacity for eligible

full-time or regular part-time work with 250 weeks of paid

contributions as an employee or as a self-employed person,

including an annual average of 50 weeks of paid or credited

contributions.

Partial pension: A reduced pension is awarded if the annual

average is between 20 and 49 weeks of contributions.

Survivor pension: Awarded to a widow(er) whose deceased

spouse paid 156 weeks of contributions, with an annual

average of 50 weeks paid or credited.

Partial pension: A reduced pension is awarded if the insured

had an annual average of between 20 and 49 weeks of

contributions under the flat-rate pension scheme or between

15 and 49 weeks under the earnings-related scheme.

Income test: Earned income must not exceed the minimum

wage; widows under age 60 with children under age 16 qualify

for the survivor pension regardless of their income.

Orphan’s pension: Awarded in the event that both parents

are deceased. One parent must have been insured and had at

least 1 week of contributions at the time of death.

Old-Age Benefits

Old-age pension: Pensions vary depending on whether

entitlement exists to the earnings-related pension that was

introduced on January 22, 1979; whether the insured has an

occupational service pension (which causes reductions in the

social security benefit); and whether the person is married with

a dependent spouse.

Pensions for those who paid contributions only before

January 22, 1979, range from a minimum of Lm 18.90 a week to a

maximum of Lm 86.53 a week.

Earnings-related pensions, which can be as much as Lm 86.53 a

week, are 2/3 of the yearly average of the best 3 consecutive

years in the last 10 years before retirement for employed

persons or in the last 10 consecutive years before retirement

for self-employed persons.

Old-age noncontributory pension: A means-tested pension

is provided.

Benefit adjustment: Benefit adjustment is linked to increases in

wages and prices.
152 ♦ SSPTW: Europe, 2004

Malta

Permanent Disability Benefits

Disability pension: Pensions vary depending on whether an

occupational service pension is payable and whether the

person is married with a dependent spouse. Pensions range

from a minimum of Lm 17.16 a week to a maximum of Lm 45.16 a

week.

Benefit adjustment: Benefit adjustment is linked to increases in

prices and, in some cases, to increases in wages.

Survivor Benefits

Survivor pension: Payable to a widow(er). Pensions vary

depending on whether contributions were paid before or after

January 22, 1979, and whether a survivor pension is payable by

the deceased spouse’s employer.

The maximum pension for a person who paid contributions

only before January 22, 1979, is Lm 72.11 a week.

Earnings-related pensions, which can be as much as Lm 72.11 a

week, are 5/9 of the yearly average of the best 3 consecutive

years in the last 10 years before the spouse’s death or

retirement on age or medical grounds for employees; in the last

10 consecutive years before the spouse’s death or retirement

for self-employed persons.

Benefit adjustment: Benefit adjustment is linked to increases in

wages and prices.

Remarriage grant: Upon remarriage, a widow(er) forfeits any

entitlement to a survivor pension from a previous marriage and

receives a lump sum equal to 52 weeks of the applicable

National Minimum Pension.

Orphan’s pension: Lm 13.88 a week for each orphan under

age 16; Lm 30.99 for each orphan between ages 16 and 21,

provided the orphan is not gainfully employed. If the orphan

is gainfully employed but gross earnings are less than the

minimum wage, then the allowance is reduced to bring the total

of such an allowance and gross earnings to an amount

equivalent to the minimum wage.

Benefit adjustment: Benefit adjustment is linked to increases in

prices.

Administrative Organization

Ministry for Social Policy provides general supervision.

Director of Social Security manages the program.

Department of Social Security administers the program.

Sickness and Maternity

Regulatory Framework

First laws: 1956 (sickness) and 1981 (maternity).

Current law: 1987.

Type of program: Social insurance (cash benefits) and

universal (medical benefits) system.

The Employment and Industrial Relations Act requires

employers to provide 100% of earnings for 13 weeks’ maternity

leave.

Coverage

Sickness benefits: Employed and self-employed persons.

Maternity benefits: Resident citizens.

Medical benefits: Resident citizens.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Self-employed person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: See source of funds under Old Age, Disability,

and Survivors, above, for cash benefits.

Medical benefits are funded from general taxation.

Qualifying Conditions

Cash sickness benefit: Fifty weeks of paid contributions and

20 weeks paid or credited during the last 2 contribution years

before the benefit year in which the claim was made.

Maternity benefit: Maltese citizenship and residence in Malta

and, if previously in employment, not entitled to maternity

leave under the Employment and Industrial Relations Act.

Medical benefits: There is no minimum qualifying period.

Sickness and Maternity Benefits

Sickness benefit: Lm 6.32 a day for a single person or person

supporting a spouse who is not in full-time employment;

Lm 4.08 a day for other persons. Benefit is payable from the

fourth day of incapacity for up to 156 benefit days a year; up

to a maximum of 312 benefit days a year if the person

undergoes major surgery, suffers a severe injury (not workrelated), or has a serious disease requiring long-term treatment

before being able to resume work. During a 2-year period, the

total number of benefit days may not exceed 468.

The total number of such benefit days must not exceed the

total number of contributions paid since the person first

entered the scheme.

Maternity benefit: The benefit is awarded for 14 weeks,

13 weeks of which are paid at Lm 20. Of the 14 weeks’

entitlement, at least 8 weeks must be taken before the expected

date of childbirth, and the remaining weeks are to be taken as

needed.
SSPTW: Europe, 2004 ♦ 153

Malta

Workers’ Medical Benefits

Benefits and health services are provided by public hospitals

and clinics. Inpatient treatment, including medicines and

medical devices, is provided free of charge in public hospitals.

Public primary care services and outpatient treatment is free of

charge. Outpatients pay for medicines and medical devices,

except for low-income persons; persons registered as having a

chronic disease receive free medicines.

Dependents’ Medical Benefits

Benefits and health services are provided by public hospitals

and clinics. Inpatient treatment, including medicines and

medical devices, is provided free of charge in public hospitals.

Public primary care services and outpatient treatment is free of

charge. Outpatients pay for medicines and medical devices,

except for low-income persons; persons registered as having a

chronic disease receive free medicines.

Administrative Organization

Ministry for Social Policy provides general supervision.

Director of Social Security manages the program.

Department of Social Security administers the program.

Work Injury

Regulatory Framework

First law: 1929.

Current law: 1987.

Type of program: Social insurance system.

Coverage

Employed and self-employed persons whose work is

interrupted as a result of a work injury.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Self-employed person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: See source of funds under Old Age, Disability,

and Survivors, above.

Qualifying Conditions

Work injury benefits: At least 1 week of contributions.

Temporary Disability Benefits

Lm 9.49 a day for a single parent or married person supporting

a spouse who is not employed full time; Lm 7.14 a day for other

persons. The benefit is payable from the fourth day of injury

for up to 12 months.

Permanent Disability Benefits

Permanent disability pension: For an assessed degree of

disability of 90% or more, a full disability pension is awarded

regardless of the number of contributions paid or credited.

Benefits vary depending on whether an occupational service

pension is payable and whether the person is married with a

dependent spouse. Benefits range from a minimum of Lm 17.16

a week to a maximum of Lm 45.16 a week. For an assessed

degree of disability of between 20% and 89%, the pension

ranges from Lm 5.02 to Lm 22.35 a week.

For an assessed degree of disability of between 1% and 19%, a

lump-sum award is made ranging from Lm 77.56 to Lm 1,473.54.

Benefit adjustment: Benefit adjustment is linked to increases in

prices and, in some cases, to increases in wages.

Workers’ Medical Benefits

Medical, surgical, and rehabilitative treatment and medicines.

Survivor Benefits

Survivor pension: Payable to a widow(er). Pensions vary

depending on whether contributions were paid before or after

January 22, 1979, and whether a survivor pension is payable by

the deceased spouse’s employer.

The maximum pension for a person who paid contributions

only before January 22, 1979, is Lm 72.11 a week.

Earnings-related pensions, which can be as much as Lm 72.11 a

week, are 5/9 of the yearly average of the best 3 consecutive

years in the last 10 years before the spouse’s death or

retirement on age or medical grounds for employees; in the last

10 consecutive years before the spouse’s death or retirement

for self-employed persons.

Benefit adjustment: Benefit adjustment is linked to increases in

wages and prices.

Remarriage grant: Upon remarriage, a widow(er) forfeits any

entitlement to a survivor pension from a previous marriage and

receives a lump sum equal to 52 weeks of the applicable

National Minimum Pension.

Orphan’s pension: Lm 13.88 a week for each orphan under

age 16; Lm 30.99 for each orphan between ages 16 and 21,

provided the orphan is not gainfully employed. If the orphan

is gainfully employed but gross earnings are less than the

minimum wage, then the allowance is reduced to bring the total

of such an allowance and gross earnings to an amount

equivalent to the minimum wage.
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Malta

Dependent parents: Lm 43.10 for a married dependent father

who is supporting a wife; Lm 35.92 for all other cases.

Benefit adjustment: Benefit adjustment is linked to increases in

prices.

Administrative Organization

Ministry for Social Policy provides general supervision.

Director of Social Security manages the program.

Department of Social Security administers the program.

Unemployment

Regulatory Framework

First law: 1956.

Current law: 1987.

Type of program: Social insurance system.

Coverage

Employed persons.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: See source of funds under Old Age, Disability,

and Survivors, above.

Qualifying Conditions

Unemployment benefit: Fifty weeks of paid contributions

and 20 weeks of paid or credited contributions made during the

contribution year before the benefit year in which the claim

was made. The insured must be registered as unemployed and

be capable of, and available for, work.

Special unemployment benefit: Payable to the head of

household in lieu of unemployment benefit if he or she

satisfies a means test.

Unemployment assistance: The insured has exhausted the

right to an unemployment benefit.

Unemployment Benefits

Lm 3.84 a day for a single parent or a married person

supporting a spouse who is not in full-time employment and

Lm 2.50 a day for other persons.

Special unemployment benefit: The benefit rate is Lm 6.44 a

day for a single parent or for a married person maintaining a

spouse who is not employed full time; Lm 4.20 a day for other

persons. The benefit is payable from the first day of

unemployment for up to 156 benefit days; thereafter,

subsequent entitlement will depend upon the person’s having

completed at least 13 weeks of employment.

The total number of benefit days must not exceed the total

number of contributions paid since the person first entered the

scheme.

Unemployment assistance: A means-tested benefit is

provided.

Administrative Organization

Ministry for Social Policy provides general supervision.

Director of Social Security manages the program.

Department of Social Security administers the program.

Family Allowances

Regulatory Framework

First laws: 1974 (child allowances), 1977 (special allowances),

1988 (disabled child allowances and parental allowances), and

1989 (family bonuses).

Current law: 1987 (social security), with 1996 amendment.

Type of program: Social insurance and social assistance

system.

Coverage

All resident Maltese citizens who satisfy the means test.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Self-employed person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: See source of funds under Old Age, Disability,

and Survivors, above.

Qualifying Conditions

Child allowance: All households with children under age 21,

if the income of both parents did not exceed Lm 10,270 in 2003.

For children aged 16 or older, the child must be a full-time

student and not being paid for the studies, must never have

been in gainful employment, must not be registered as

unemployed, and is not entitled to any social benefits.

Care allowance for foster children: The child is certified by

a competent authority as being a foster child or under the care

of an institution.

Disabled child allowance: All households caring for a

physically or mentally disabled child if the child is not
SSPTW: Europe, 2004 ♦ 155

Malta

receiving any other social security pension for the disability.

The income of one of the parents did not exceed Lm 13,270 in

2003.

Family Allowance Benefits

Child allowance: The benefit is calculated on the difference

between the Lm 10,270 ceiling and the couple’s income

multiplied by a percentage starting at 6% for one child and

increasing depending on the number of children.

Care allowance for foster children: Lm 12 a week.

Disabled child allowance (income-tested): The maximum

benefit is Lm 5 a week.

Administrative Organization

Ministry for Social Policy provides general supervision.

Director of Social Security manages the program.

Department of Social Security administers the program.
156 ♦ SSPTW: Europe, 2004

Moldova

Moldova

Exchange rate: US$1.00 equals 12.95 lei.

Old Age, Disability, and Survivors

Regulatory Framework

First laws: 1956 (state pensions) and 1964 (pensions and

allowances for collective farmers).

Current law: 1998 (state pension social insurance).

Type of program: Social insurance system.

Republics, local authorities, and employers can provide

supplementary benefits out of their own budgets.

Coverage

Salaried citizens, agricultural workers, the self-employed, and

elected or appointed officials in government, parliament, and

the judicial system.

Source of Funds

Insured person: 2% of earnings.

Self-employed person: 10% of net monthly income

(entrepreneurs). Agricultural landowners contribute flat-rate

amounts according to the area of farmed land.

Employer: 28% of payroll (industrial sector); 20% of payroll

(agricultural sector); 4.5% of payroll for pensioners and

disabled persons employed in public organizations and unions.

Government: Ad hoc flat-rate payments to offset price

increases as a result of government reductions in food and fuel

subsidies. Total cost of the social pension and pensions for

judges, prosecutors, and other specified categories.

All of the above contributions also finance cash benefits for

sickness and maternity, work injury disability and survivor

pensions, unemployment benefits, and family allowances.

Qualifying Conditions

Old-age pension: Age 62 with 31 years of insurance coverage

(men) or age 57 with 31 years of work (women).

Age 59 and 6 months with 31 years of work, including at least

10 years in hazardous or arduous conditions (men) or age 54

and 6 months with 31 years of work, including at least 7 years

and 6 months in hazardous or arduous conditions (women);

mothers aged 54 and 6 months with 31 years of insurance

coverage who have raised three or more children.

Deferred pension: There is no age limit for deferral.

Social pension (old age): Payable to citizens meeting the age

requirement but not meeting contributory conditions for an

old-age pension.

Disability pension: Total disability (incapacity for any work)

is classified as Group I (requiring constant attendance) or

Group II (not requiring constant attendance).

Partial disability (incapacity for usual work): The insured has a

minimum of 1 to 5 years of covered employment, depending on

age at the onset of disability (Group III disability).

Social pension (disability): Payable to a disabled person

whose disability began in childhood or disabled children under

age 16 and who are not eligible for a contributory disability

pension.

Survivor pension: The insured was a pensioner or met the

requirements for the old-age (partial or full) pension or

disability (Groups I, II, or III) pension.

Eligible survivors include widow(er)s and orphans. The

surviving spouse must be of retirement age (or within 5 years

of retirement) or disabled (Group I or II) at the time of the

insured’s death; married to the deceased spouse for at least

15 years; or caring for a child younger than age 3 and not

employed. Eligibility ceases on remarriage. Children must be

under age 18 (age 23 if a student, no limit if disabled).

Social pension (survivors): Payable to survivors who are not

eligible for a contributory survivor pension.

Old-Age Benefits

Old-age pension: The pension is based on the number of

years of coverage, the effective date of retirement, and average

monthly income plus 2% of wages for each year of coverage

above 31 years.

The required coverage period is gradually increasing. From

2008, the full pension is 1.2% of insurable earnings for every

year of established coverage up to a maximum of 35 years plus

2% of insurable earnings for every year above 35 years.

Insurable earnings for benefit calculation purposes must not

exceed three times the average monthly wage.

The minimum pension is 135 lei; 120 lei for agricultural workers.

Partial pension: Paid to those with at least 20 years of covered

employment but with insufficient years of covered employment

to be eligible for the full pension. The monthly benefit is

reduced in proportion to the number of years below the

required number of years of coverage.

Deferred pension: A deferred pension is possible.

Social pension (old age): 65 lei.

Benefit adjustment: Benefits are adjusted periodically

according to cost-of-living changes.

Permanent Disability Benefits

Disability pension: The pension is based on monthly average

insurable income, the number of years of coverage, and a

coefficient related to the group of assessed disability.

The coefficient for a Group I disability is 0.42; Group II, 0.35;

and Group III, 0.2.
SSPTW: Europe, 2004 ♦ 157

Moldova

The minimum pension is 140 lei (Group I), 135 lei (Group II), or

95 lei (Group III).

Partial pension (total disability): The monthly benefit is

reduced in proportion to the number of years below the

required number of years of coverage.

Insurable earnings for benefit calculation purposes must not

exceed two times the average monthly national wage in the

year before the claim.

Social pension (disability): 65 lei (Group I), 56 lei (Group II),

or 33 lei (Group III); disabled children under age 16 receive

100 lei (Group I) or 85 lei (Groups II and III); for a disability that

began in childhood, 100 lei (Group I), 85 lei (Group II), or 50 lei

(Group III).

Benefit adjustment: Benefits are adjusted periodically

according to cost-of-living changes.

Survivor Benefits

Survivor pension: The minimum pension is 50% of the

insured’s pension for one survivor, 75% for two, and 100% for

three or more.

Full orphan’s pension: At least 50% of the insured’s minimum

old-age pension.

Partial pension: If the insured had an insufficient period of

covered employment, the monthly benefit is reduced in

proportion to the number of years below the required number

of years of coverage.

The survivor pension ceases on remarriage.

Social pension (survivors): 49 lei for one orphan; 98 lei for

two or more orphans. The pension is doubled for full orphans.

Benefit adjustment: Periodic review of pensions according to

cost-of-living changes.

Administrative Organization

The Ministry of Labor and Social Protection provides general

coordination and supervision.

National Office of Social Insurance and local social security

departments administer the program.

Sickness and Maternity

Regulatory Framework

First law: 1993.

Current laws: 1995, 1997, 1998, 1999, 2001, 2002, and 2003.

Type of program: Social insurance system.

Coverage

Cash sickness and maternity benefits: Salaried citizens;

agricultural workers; the self-employed; elected or appointed

officials in government, parliament, and the judicial system;

persons with disabilities; and the unemployed.

Medical care: All residents.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: See source of funds under Old Age, Disability,

and Survivors, above. Total cost of medical care.

Qualifying Conditions

Cash sickness and maternity benefits: Resident in the

country.

Medical benefits: Resident in the country.

Sickness and Maternity Benefits

Sickness benefit: The benefit depends on the length of

covered employment. For less than 5 years, the benefit is 60%

of earnings; between 5 years and 8 years, 80%; and for more

than 8 years, the benefit is 100%. The benefit is payable from

the first day of sickness for up to 4 months; may be extended

in certain cases.

Death grant: A lump sum of 360 lei.

Maternity benefit: The benefit is 100% of the average wage

during the last 2 months. The benefit is paid for 126 days;

additional leave of 14 days is provided for multiple births or for

complications resulting from childbirth. In cases of adoption,

the benefit is paid for 56 days after the date of adoption.

Workers’ Medical Benefits

Medical care is provided by the state. Free hospital treatment

is provided for a limited number of days.

Cost sharing: The insured makes a minimal contribution

toward the cost of some medical care.

There is no limit to duration.

Dependents’ Medical Benefits

Same as for the insured.

Administrative Organization

Ministry of Health, with local authorities and the trade unions,

supervises the provision of medical care.

Ministry of Health, National Agency of Health Insurance, and

local health departments administer medical services provided

through clinics, hospitals, and other facilities.
158 ♦ SSPTW: Europe, 2004

Moldova

Work Injury

Regulatory Framework

First and current laws: 1993, 1997 (work injury), 1999 (work

injury and occupational diseases insurance), and 2001.

Type of program: Social insurance (cash benefits) and

universal (medical care) system.

Local authorities and employers can provide supplementary

pension benefits out of their own budgets.

Coverage

Cash and medical benefits: Employees, members of

cooperatives, and school pupils and students undergoing

professional training.

Source of Funds

Insured person: None.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: None.

Qualifying Conditions

Work injury benefits: The worker must be insured.

Temporary Disability Benefits

Temporary disability benefit: 100% of average earnings in

the last 6 months before the onset of disability. The benefit is

payable from the first day of incapacity until recovery or until

the award of a disability pension.

Employment transfer reimbursement: The difference

between the average monthly wage in the last 6 months and

the average wage received in the new position of employment.

The benefit is paid for 90 days.

Permanent Disability Benefits

Permanent disability pension: The pension is paid

according to three groups of disability (Group I total disability,

requiring constant attendance; Group II disability, not

requiring constant attendance; and Group III, incapacity for

usual work) and depends on insured income before 1999.

Death grant: A lump sum depending on the category and

number of dependents, but not more than 24 national average

monthly wages.

Workers’ Medical Benefits

Medical services are provided directly to patients by

government health providers and include general and

specialist care, hospitalization, laboratory services, and

transportation, plus the full cost of appliances and medicines.

Survivor Benefits

Survivor pension: At least 50% of the insured’s pension for

one survivor, 75% for two, and 100% for three or more.

Full orphan’s pension: At least 50% of the insured’s minimum

old-age pension.

Partial pension: If the insured had an insufficient period of

covered employment, the monthly benefit is reduced in

proportion to the number of years below the required number

of years of coverage.

The survivor pension ceases on remarriage.

The maximum pension must not be more than 24 times the

national average monthly wage.

Administrative Organization

Enterprises and employers pay temporary disability benefits

for their employees.

National Office of Social Insurance provides coordination and

supervises the Work Injury Fund.

Ministry of Labor and Social Protection provides general

coordination and supervises pensions.

Ministry of Health and health departments of local

governments provide general supervision and coordinate

medical benefits.

Ministry of Health and local health departments administer

medical services provided through clinics, hospitals, and other

facilities.

Unemployment

Regulatory Framework

First and current laws: 1997 (work injury), 1999 (work injury

and occupational diseases insurance), and 2003.

Type of program: Social insurance system.

Coverage

Citizens aged 16 to 62 (men) or aged 16 to 57 (women) with a

permanent address who are capable of work.

Source of Funds

Employee: None.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: None.

Qualifying Conditions

Unemployment benefit: Registered at an employment office

and willing and able to work. Benefits may be reduced,

postponed, suspended, or terminated if the worker is
SSPTW: Europe, 2004 ♦ 159

Moldova

discharged for violating work discipline, leaving employment

without good cause, violating conditions for a job placement

or vocational training, or filing fraudulent claims.

Claimants must have no income and have been salaried for at

least 12 months in the last 24 months before unemployment.

Waiting periods apply for some categories of worker: 2 months

for the nonvoluntarily unemployed, 60 days for recently

graduated students, or 30 days for ex-servicemen on the

completion of military service.

Unemployment Benefits

If employed previously for up to 5 years, the benefit is equal to

50% of the national average wage and is paid for a maximum of

6 months; for those who have been employed for 5 to 10 years,

the benefit is 55% and is paid for a maximum of 9 months; for

those with more than 10 years of employment, the benefit is

60% and is paid for a maximum of 12 months.

Benefit adjustment: Benefits are adjusted every January

according to changes in the average national wage of the

previous year.

Administrative Organization

Department of Employment within the Ministry of Labor and

Social Protection provides general supervision.

State Employment Service administers the program.

Family Allowances

Regulatory Framework

First law: 1977.

Current laws: 2001, 2002, and 2003.

Type of program: Social insurance and social assistance

system.

Coverage

Families with children resident in Moldova.

Source of Funds

Insured person: None.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: None.

Qualifying Conditions

Family allowances: Children under age 16 (age 18 if a

student). Other qualifying conditions vary according to

benefits. For children older than age 18 months, the benefit is

means tested. The monthly income for each family member,

including children, should not exceed 18 lei; for families with at

least three children, 27 lei; for single mothers, 54 lei.

Family Allowance Benefits

Family allowances: For an insured person’s child up to

age 18 months, 100 lei a month; for a noninsured person’s child

up to age 18 months, 75 lei a month; for children older

than 18 months, 25 lei a month (means-tested).

Birth grant: A lump sum of 420 lei for the first child of an

insured person and 280 lei for each subsequent child; a lump

sum of 300 lei for the first child of a noninsured person and

200 lei for each subsequent child.

Administrative Organization

Ministry of Labor and Social Protection provides general

supervision.

Local departments of social security administer benefits to

nonworking parents.

Enterprises and employers award benefits and provide

payments to their own employees.
160 ♦ SSPTW: Europe, 2004

Monaco

Monaco

Exchange rate: US$1.00 equals 0.80 euros (€).

Old Age, Disability, and Survivors

Regulatory Framework

First laws: 1944 (workers) and 1958 (self-employed).

Current laws: 1947, 1956, 1961, 1971, 1974, 1976, 1980, and

1983.

Type of program: Social insurance system.

Coverage

Employed persons.

Special systems for self-employed persons and public-sector

employees.

Source of Funds

Insured person: 6.15% of earnings (old-age pension and

survivor pension).

Employer: 6.15% of payroll (old-age pension and survivor

pension), plus an additional 1.01% of payroll (the additional

contribution finances sickness benefits and other benefits

insuring against the interruption of employment); 15.8% of

payroll (disability benefits and survivor pension).

The employer contribution for disability benefits also covers

sickness and maternity benefits and family benefits.

Government: None.

The maximum monthly earnings for contribution purposes are

€3,690 for old-age benefits and €6,130 for disability benefits.

Qualifying Conditions

Old-age pension: Age 65 (men and women) with 10 years of

insurance coverage including at least 169 hours of employment

each year; 60 months of effective or deemed employment.

Women can retire at age 55 if they have raised at least three

children.

Early pension: Age 60 with the cessation of all work activity.

Deferred pension: The pension can be deferred after age 65.

Disability pension: Under age 60 and a total loss of work

capacity (total disability) or the loss of 2/3 of work capacity

(partial disability); 12 months’ registration in the previous

15 months; or 800 hours of employment in the previous

12 months, including 200 hours in the previous 3 months.

Survivor pension: Age 65; age 60 if disabled (widowers) or

age 50 (widows). There is no age limit for a widow(er) caring

for at least one child. The survivor must have been married for

at least 4 years at the date of the insured’s death, married

2 years before the insured’s date of retirement, or there was at

least one child born as a result of the marriage. The insured

was a pensioner or met the qualifying conditions for a pension.

Old-Age Benefits

Old-age pension: The pension is calculated as the number of

points acquired multiplied by the value of a point (€15.37). The

number of points acquired during any 1-year period is obtained

by dividing the declared earnings by the basic salary in force,

up to a limit of 4 points per month.

Early pension: The pension is calculated on the same basis as

the old-age pension.

Deferred pension: The pension is calculated on the same basis

as the old-age pension.

Permanent Disability Benefits

Disability pension: The pension is 30% or 50% of the average

monthly earnings over the previous 60 months, depending on

the category of disability.

The guaranteed minimum income for disabled persons under

age 65 is equal to twice the standard minimum income (€2,346

per quarter).

Constant-attendance allowance: 40% of the disability pension.

Survivor Benefits

Survivor pension: 60% of the insured’s pension.

Orphan’s pension: 25% of the insured’s pension for each

orphan under age 18 (under age 20 if an apprentice, under

age 21 if a student). Full orphans receive 50% of the insured’s

pension. The maximum total pension cannot exceed the value

of the insured’s pension.

Administrative Organization

Independent Employees’ Pension Fund, involving

representatives of government, employers, and employees,

administers the employees’ old-age insurance scheme.

Compensation Fund for Social Services, involving

representatives of government, employers, and employees,

administers the employees’ disability insurance.

Independent Pension Fund for Self-Employed Workers,

involving representatives of government, employers, and selfemployed persons, administers self-employed persons’ old-age

insurance.

Sickness and Maternity

Regulatory Framework

First laws: 1944 (employees) and 1982 (self-employed

persons).

Current laws: 1949, 1959, 1971, 1981, 1982, and 1983.

Type of program: Social insurance system.
SSPTW: Europe, 2004 ♦ 161

Monaco

Coverage

Employed persons.

Special scheme for self-employed persons.

Source of Funds

Insured person: None.

Employer: See source of funds (disability benefits) under Old

Age, Disability, and Survivors, above.

Government: None.

Qualifying Conditions

Cash sickness benefit: The benefit is paid if the insured has

less than 6 months of interruptions from employment and has

120 hours of effective or deemed employment during the last

month or 200 hours during the last 3 months; if interruptions to

employment are more than 6 months, the insured must have

12 months of contributions in the previous 15 months and

800 hours of work or deemed work in the previous 12 months,

including 200 hours in the last 3 months.

Cash maternity benefit: One month’s registration in the

quarter preceding conception and continuing registration and

85 hours of work for each month between conception and the

medical confirmation of pregnancy.

Medical benefits: 120 hours of employment in the last month

or 200 hours in the previous 3 months.

Maternity medical benefits: 120 hours of employment in the

last month or 200 hours in the previous 3 months.

Sickness and Maternity Benefits

Sickness benefit: 50% of the average daily wage of the

previous 12 months up to a ceiling of €102.17. The benefit is

payable after the first 3 days, up to a maximum of 360 days;

benefit entitlement can be extended for 3 or 4 years in cases of

chronic or recurrent illness.

Maternity benefit: 90% of the average salary of the previous

12 months up to a ceiling of €102.17. The benefit for the first

and second child (in households with fewer than two children

currently residing at home) is payable for 8 weeks before and

8 weeks after the expected date of childbirth; third and

subsequent children (or with two children currently residing at

home), 8 weeks before and 18 weeks after the expected date of

childbirth; for twins (with no other children in the family),

12 weeks before and 22 weeks after the expected date of

childbirth; and other multiple births, 24 weeks before and

22 weeks after the expected date of childbirth.

Workers’ Medical Benefits

Reimbursements for medical costs include primary and

specialist treatment, hospitalization, laboratory services,

pharmaceuticals, dental care, appliances, and transportation.

The rates applied by medical practitioners and auxiliary medical

services to insured persons are classified into three categories

according to income and family size: standard rate with no

extras; 20% higher than the standard rate; and fee set by prior

agreement with a medical practitioner.

The award is up to 80% of the cost of the medical benefit, up to

the ceiling of the first category rate. This rate can increase to

100% for lengthy and costly treatment or for certain

complicated procedures, including complicated surgery and

prolonged hospitalization.

Dependents’ Medical Benefits

Same as for the insured person.

Administrative Organization

Compensation Fund for Social Services, involving

representatives of government, employers, and employees,

administers the employee’s scheme.

Work Injury

Regulatory Framework

First and current law: 1958.

Type of program: Mandatory private insurance system.

Unemployment

Regulatory Framework

Coverage is provided through France’s scheme for

unemployment insurance.

Family Allowances

Regulatory Framework

First law: 1938.

Current law: 1954.

Type of program: Social insurance system.

Coverage

Employed persons.

Source of Funds

Insured person: None.

Employer: See source of funds (disability benefits) under Old

Age, Disability, and Survivors, above.

Government: None.
162 ♦ SSPTW: Europe, 2004

Monaco

Qualifying Conditions

Family allowance: Child under age 6 (under age 16 if a school

pupil; age 17 if searching for a first job; age 21 if an apprentice,

a student, or disabled).

Prenatal allowance: The head of the household is registered

as insured and has at least 77 hours of employment or deemed

employment during the related month. A formal declaration of

pregnancy during the first 3 months following conception

supported by a medical examination of the mother.

Education grant: For children going to school in Monaco or

France.

Family Allowance Benefits

Family allowance: With 145 hours of insured employment,

the allowance is €115.80 a month for each child under age 3;

€173.70 for each child aged 3 to 6; €208.40 for each child aged 6

to 10; €243.20 for each child aged 10 to 21. The benefits are

proportionately reduced with between 77 hours and 144 hours

of insured employment.

Prenatal allowance: With 145 hours of insured employment,

the allowance is €115.80 a month. The benefits are

proportionately reduced with between 77 hours and 144 hours

of insured employment.

Education grant: The amount varies according to the

different lessons attended by children going to school in

Monaco (between €55 and €350) or France (between €28 and

€350).

Administrative Organization

Compensation Fund for Social Services, involving

representatives of government, employers, and employees,

administers the scheme.
SSPTW: Europe, 2004 ♦ 163

Netherlands

Netherlands

Exchange rate: US$1.00 equals 0.80 euros (€).

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1901.

Current laws: 1957 (old-age pension), 1959 (survivor

pension), 1966 (disability pension for employed persons), 1998

(disability pension for self-employed persons), and 1998

(disability assistance for handicapped young persons).

Type of program: Social insurance system.

Coverage

Old-age and survivor pensions: All residents.

Disability pension: Employed workers, self-employed

workers, resident persons disabled since childhood, and

students.

Source of Funds

Insured person: 17.9% of income for the old-age pension and

1.25% for the survivor pension. Self-employed persons

contribute 8.8% for the disability pension.

Employer: 5.85% of payroll, plus a variable-rate contribution

(on average, 0.85%) for the disability pension for employed

persons. The employer pays a supplement of 2.2% of payroll

up to a maximum of €167 a day to compensate for part of the

employee’s contribution.

Government: A subsidy to bring low benefits up to the social

minimum (€578.24 a month for a single person and €1,156.54 for

a couple). The cost of pensions for persons disabled since

childhood and any deficit.

The minimum annual earnings for contribution purposes are

€13,160.

The maximum earnings for contribution purposes are €29,543 a

year for old-age and survivor pensions; €167 a day for the

disability pension for employed persons; and €38,118 a year for

the disability pension for self-employed persons.

Qualifying Conditions

Old-age pension: Age 65 with 50 years of residence between

ages 15 and 64 and, if income was earned, contributions paid

each year from age 15 through age 64 for a full pension.

Partial pension: A reduced pension is paid if the qualifying

conditions are not met in full (no reduction is made for the pre1957 period if the insured is a resident citizen with 6 years of

residence after age 59).

Two persons sharing a household can qualify for a couple’s

pension if both are over age 65; if under age 65, the younger

partner must satisfy the income test.

Retirement is not necessary. Pensions are payable abroad

under certain conditions.

Disability pension: The loss of over 80% of earning capacity

in the current occupation for a full pension.

Partial pension: The loss of 15% to 80% of earning capacity

for employed workers; 25% to 80% of earning capacity for

unemployed workers, resident persons disabled since

childhood, or students.

Survivor pension: Payable to a widow(er), unmarried

permanent partner, or full orphan. The survivor pension is

income tested for survivors born before 1950, for those with

children under age 18, and for a surviving partner who is 45%

disabled.

Old-Age Benefits

Old-age pension: Single persons receive €921.28. Couples,

whether married or not, and both aged 65 or older receive

€631.76 a month each. A pensioner who is a single parent

caring for a child under age 18 receives €1,141.28. A person

aged 65 or older with a partner younger than age 65 receives a

monthly pension of €631.76 and an income-tested

supplementary allowance up to a maximum of €631.76.

Income-tested supplementary allowance: Special rates operate

if one partner, whether married or not, is under age 65. The

supplementary allowance is added to the elder partner’s

pension if the younger partner’s income from employment is

less than €1,137.36. The maximum supplement is payable if the

partner’s income from employment is below €189.72. Income

related to employment (including, unemployment benefit,

disability benefit, and sickness benefit) is subtracted in full;

the supplementary allowance is payable if income amounts to

less than €631.76.

Partial pension: The pension is reduced by 2% for each

unexcused year of noncontribution.

Benefit adjustment: Automatic adjustment twice a year for

changes in the net minimum wage.

Permanent Disability Benefits

Disability pension (employed workers): Up to 70% of

earnings for a loss of earning capacity of at least 80%; 14% to

50.75% of earnings for a loss of earning capacity of 15% to

80%.

The maximum benefit is €167.70 a day.

Constant-attendance allowance: 30% of the full pension.

Benefit adjustment: Automatic adjustment twice a year for

changes in the net minimum wage.

Disability pension (self-employed workers): Up to 70% of

earnings for a loss of earning capacity of at least 80%; 14% to

50.75% of earnings for a loss of earning capacity of 25% to

80%.
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The maximum earnings for benefit purposes equal the minimum

wage of €1,264.80 a month (before taxes).

Constant-attendance allowance: 30% of the full pension.

Benefit adjustment: Automatic adjustment twice a year for

changes in the minimum wage.

Disability pension (resident persons disabled since

childhood and students): Up to 70% of the minimum wage of

€1,264.80 a month (before taxes) for a loss of earning capacity

of at least 80%; 14% to 50.75% of the minimum wage for a loss

of earning capacity of 25% to 80%.

Constant-attendance allowance: 30% of the full pension.

Benefit adjustment: Automatic adjustment twice a year for

changes in the net minimum wage.

Survivor Benefits

Survivor pension: €984.99 a month to a widow(er) or a

surviving unmarried permanent partner caring for a child under

age 18. The benefit is reduced by the survivor’s income.

Income test: Part of the income from employment, covering

50% of the minimum wage (€632.40 per month) plus 1/3 of all

earnings in excess of this amount, is disregarded. No benefit is

paid if monthly income is €2,109.89 or more. Income related to

employment (including unemployment benefits, disability

benefits, and sickness benefits) is subtracted in full from the

survivor’s benefit.

Dependent child allowance: An allowance of €223.73 per child

is paid without an income test until the child is age 18.

Orphan’s pension: €315.20 a month for each full orphan under

age 10, €472.80 if aged 10 to 15, and €630.39 if aged 16 to 18

(aged 16 to 21 if a student).

Benefit adjustment: Automatic adjustment twice a year for

changes in the net minimum wage.

Death benefit: 100% of earnings up to daily maximum

earnings of €167 for employed workers; up to the minimum

wage (€1,206.60 a month) for unemployed workers. Benefit is

payable for 1 month for the death of a beneficiary of sickness

benefits or disability benefits. For the death of an old-age

pensioner or survivor pensioner, the benefit is 100% of the oldage or survivor pension.

Administrative Organization

Social Insurance Bank administers old-age and survivor

pensions.

Inspection of Work and Income provides general supervision

of contributions and administers cash benefits.

Institute for Employee Benefit Schemes collects contributions

and implements the Disablement Benefits Act, the SelfEmployment Benefits Act, and the Sickness Benefits Act.

National Revenue Department collects contributions for oldage and survivor pensions and for the disability pension for

unemployed workers.

Sickness and Maternity

Regulatory Framework

First law: 1931.

Current laws: 1964 (medical benefits); 1966 (cash sickness

and maternity benefits for wage earners and salaried persons);

1968 (exceptional medical expenses compensation); and 1998

(cash maternity benefits for unemployed workers),

implemented in 2001.

Type of program: Social insurance system.

Coverage

Cash benefits: Employees who have lost their jobs in the first

2 years of sickness, sick unemployed persons, temporary

workers on sick leave without a permanent contract, the

voluntarily insured, apprentices, organ donors, vocationally

rehabilitated persons as defined in the Disability Reintegration

Act, and women whose sickness is caused by pregnancy or

childbirth.

Beginning in March 1996, coverage under the Sickness

Benefits Act is mostly privatized. Under the civil code,

employers must continue to pay 70% of wages (up to a

maximum of €167.70 a day) during an employee’s absence due

to sickness for a maximum of 104 weeks; may be extended to

156 weeks. Employers may deduct the amount of the benefit

from the weekly salary.

Medical benefits: Wage earners and salaried employees

earning less than €32,600 a year and pensioners. Subject to

certain conditions, coverage is extended to a partner and

children.

Exceptional medical expenses: All residents.

Source of Funds

Insured person: A flat-rate contribution set by the sickness

fund, plus 1.25% of earnings for medical benefits and 13.25%

of earnings for exceptional medical expenses insurance.

The contribution for sickness and maternity benefits for

(un)employed workers is included in the contribution for

unemployment benefits. The contribution for maternity

benefits for self-employed workers is included in the

contribution for disability benefits for self-employed workers.

Employer: 6.75% of payroll for medical benefits. The

contribution for sickness and maternity benefits is included in

the contribution for unemployment benefits for employed

workers.

Government: Annually determined contribution toward the

financing of medical benefits.

The minimum annual earnings for contribution purposes are

€13,159.

The maximum earnings for contribution purposes are €113 a

day (medical benefits); €29,543 a year (exceptional medical
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expenses); and €38,117 a year (cash sickness benefits and

maternity benefits for unemployed workers).

Qualifying Conditions

Sickness benefit: Inability to perform normal work.

Maternity benefit: Employed or unemployed.

Medical benefits: Registered with an approved sickness

fund.

Sickness and Maternity Benefits

Sickness benefit: 70% of earnings up to the daily maximum

earnings of €167.70. Benefit is payable for up to 104 weeks;

may be extended to 156 weeks.

Maternity benefit: 100% of earnings up to the daily maximum

of €167.70. Benefit is payable for a period of 16 weeks around

childbirth.

Workers’ Medical Benefits

Service benefits are provided by doctors, hospitals, and

pharmacists under contract with, and paid directly by, sickness

funds. Benefits include general and specialist care,

hospitalization, laboratory services, medicines, limited dental

care, maternity care, appliances, rehabilitation, and

transportation.

Cost sharing: Specific cost-sharing arrangements for long-term

hospitalization, artificial limbs, and transportation.

There is no limit on duration (except for physiotherapy).

Exceptional medical expenses insurance takes over the cost of

hospital stay from the 366th day.

Dependents’ Medical Benefits

Service benefits are provided by doctors, hospitals, and

pharmacists under contract with, and paid directly by, sickness

funds. Benefits include general and specialist care,

hospitalization, laboratory services, medicines, limited dental

care, appliances, rehabilitation, and transportation.

Cost sharing: Specific cost-sharing arrangements for long-term

hospitalization, artificial limbs, and transportation.

There is no limit on duration (except for physiotherapy).

Exceptional medical expenses insurance takes over the cost of

hospital stay from the 366th day.

Maternity care: The partner and children of an insured man

receive the same nursing or hospitalization benefits as that of

an insured woman.

Death benefit: 100% of earnings up to the daily maximum of

€167.70. The benefit is payable for a maximum of 1 month.

Administrative Organization

Inspection of Work and Income provides general supervision

of cash benefits.

Institute for Employee Benefit Schemes collects contributions

for medical benefits and administers cash benefits for sickness

and maternity.

Supervisory Board for Health Care Insurance provides general

supervision of medical benefits and exceptional medical

expenses benefits.

National Revenue Department collects contributions for cash

benefits for maternity on behalf of unemployed workers and for

exceptional medical expenses insurance.

Work Injury

Regulatory Framework

First law: 1901.

Note: Beginning in 1967, there is no specific work injury

program. The provisions of the 1966 and 1968 legislation

under the sickness and maternity benefits and disability

pensions programs (see above) apply to all incapacities,

whether work-related or not.

Unemployment

Regulatory Framework

First law: 1949.

Current law: 1987.

Type of program: Social insurance and social assistance

system.

Coverage

Employed persons.

Special system for public-sector employees.

Source of Funds

Insured person: Variable contribution rates according to

industry (the average is 5.80% of earnings).

Employer: Variable contribution rates according to industry

(the average is 1.55% of payroll).

Government: None.

The maximum daily earnings for contribution and benefit

purposes are €167.70.

Qualifying Conditions

Unemployment benefit: Employed for at least 26 weeks

during the 39 weeks before unemployment for the basic

benefit. The basic benefit is paid for 6 months. An earnings-
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related benefit is paid with at least 52 days of employment in

4 of the last 5 years. The duration of the earnings-related

benefit (from 6 months up to 5 years) depends on the insured’s

employment record.

Follow-up benefit: If unemployment continues after the salaryrelated benefit expires, a follow-up benefit provides for an

additional 2 years. The follow-up benefit is based on the

minimum wage. (Follow-up benefit was abolished for persons

becoming unemployed after August 11, 2003.)

Periods spent caring for children under age 12 also count (fully

or partially) toward the qualifying period. The insured must be

registered at the public labor exchange and be capable of,

available for, and looking for work.

Unemployment Benefits

The basic benefit is 70% of the minimum wage. The salaryrelated benefit is 70% of the last salary with daily maximum

earnings of €167.70.

Follow-up benefit: 70% of the minimum wage. (Follow-up

benefit was abolished for persons becoming unemployed after

August 11, 2003.)

Administrative Organization

Inspection of Work and Income provides general supervision.

Institute for Employee Benefit Schemes collects contributions

and administers the Disablement Benefits Act, the

Unemployment Benefits Act, and the Sickness Benefits Act.

Social security agencies deliver benefits on a contractual basis.

Family Allowances

Regulatory Framework

First law: 1939.

Current law: 1963.

Type of program: Universal system.

Coverage

All covered persons with one child or more.

Source of Funds

Insured person: None.

Employer: None.

Government: Total cost.

Qualifying Conditions

Family allowances

Child under age 16: The child must be a member of the

insured’s household; if the child is not a member of the

household, the benefit may be paid under certain conditions.

Children aged 16 and 17: School-going children must spend

at least 213 full hours per quarter receiving instruction

(excluding homework and traveling time). Children who do not

meet this condition may also be regarded as school-going if

they attend higher vocational or university training with a

course load of at least 1,680 hours per school year or if they

spend at least 1,600 hours per school year attending some

other type of training. No benefit is payable for children who

receive a student grant or loan under the Dutch Student

Financing Act.

No benefit is payable if the child spends more than 19 hours

per week in employment or receives an unemployment benefit.

(Unemployed children must be seeking work for at least

19 hours per week and be registered at a Work and Income

Center.)

Children who are ill or handicapped must be unable to earn

55% or more of the normal earning capacity of healthy children

in the same age group.

Family Allowance Benefits

Family allowances: Depending on the composition of the

family, benefit ranges from €176.62 to €343.81 per child per

quarter.

Benefit adjustment: Twice a year according to changes in the

price index.

Administrative Organization

Inspection of Work and Income provides general supervision.

Social Insurance Bank administers allowances.
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Norway

Exchange rate: US$1.00 equals 6.74 kroner.

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1936.

Current law: 1997 (national insurance).

Type of program: Universal and social insurance system.

Coverage

Universal pension: All residents, including resident

noncitizen seamen serving on Norwegian ships outside

territorial waters. Pension income is independent of previous

income or contributions paid.

Earnings-related pension: All employed and self-employed

persons earning over the base amount and born after 1897;

the base amount is reduced for pensioners born before 1897

and their surviving dependents.

The base amount equals 56,861 kroner as of January 1, 2004,

and varies automatically with changes in general price and

income levels, subject to adjustment once or twice a year.

Special systems for seamen, fishermen, forestry workers,

railway employees, and public employees.

Source of Funds

Insured person: 7.8% of income (reduced to 3.0% of

income, including payments in kind, lodging, or pension, if

under age 17 or older than age 69).

Self-employed person: 10.7% of income up to 12 times the

base amount, plus 7.8% of income exceeding 12 times the

base amount.

Contributions from employed and self-employed insured

persons are calculated on the basis of pensionable income

(gross wage income including cash sickness, maternity, and

unemployment benefits) in excess of 23,000 kroner a year;

however, contributions may not exceed 25% of annual

income above 23,000 kroner.

There is no maximum income limit for contribution purposes

for employed and self-employed insured persons.

Employer: 14.1% of payroll. Contribution rates are reduced

in certain geographic areas, except for enterprises in certain

sectors.

Starting in 2004, the system of varying rates for employers is

being reformed to eliminate three intermediate levels. In

2007, only the full rate and a zero percent rate will be

applied.

Government: National government meets any deficit.

All of the above contributions also finance sickness and

maternity, work injury, and unemployment benefits.

Qualifying Conditions

Old-age pension

Universal old-age pension: Age 67 with 3 years’ coverage

between ages 16 and 66. The pension is payable abroad under

special conditions. Entitlement is not dependent on ceasing

employment.

Earnings test: If the insured continues to work at age 67, an

earnings test is applied to the pension until the insured ceases

to work or reaches age 70. The value of the pension is reduced

by 40% of the wages exceeding twice the base amount.

Dependent supplement (income-tested): For a dependent

spouse and children under age 18.

Special supplement: A supplement is provided to persons

with limited work histories or low income.

Earnings-related old-age pension: Age 67 with 3 years’

earnings above the base amount. The pension is payable

abroad. Entitlement is not dependent on ceasing

employment.

Earnings test: If the insured continues to work at age 67, an

earnings test is applied to the pension until the insured ceases

to work or reaches age 70. The value of the pension is reduced

by 40% of the wages exceeding twice the base amount.

Disability pension

Universal disability pension: Three years’ coverage

immediately preceding the date of the claim (1 year in some

instances). Earning capacity is permanently reduced by 50%

or more for persons aged 16 to 66. The pension is payable

abroad under special conditions.

Dependent supplement (income-tested): For a dependent

spouse and children under age 18.

Earnings-related disability pension: Three years’ earnings

above the base amount. Earning capacity is permanently

reduced by 50% or more for persons aged 16 to 66. The

pension is payable abroad.

Temporary disability benefit: Payable instead of the disability

pension if future improvement of work capacity is probable.

Three years’ coverage immediately before the onset of

disability; 1 year in some cases. Earning capacity must be

reduced by at least 50% (30% or 40% in selected counties).

Survivor pension

Universal survivor pension: The insured had 3 years’

coverage immediately before the date of death or was receiving

a pension from the National Insurance Administration. The

surviving spouse was married to the insured for at least

5 years or provides care for at least one dependent child.
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Universal orphan’s pension: The insured had 3 years’

coverage immediately before the date of death or was receiving

a pension from the National Insurance Administration.

Orphans must be under age 18 (under age 20 if a full orphan

and a student).

Special supplement: A supplement is provided if the survivor

is ineligible for an earnings-related survivor pension.

Child care benefit: If the survivor or parent is a full-time

student or works outside the home.

Earnings-related survivor pension: The insured had 3 years’

earnings above the base amount.

Transitional benefit: A surviving spouse who is ineligible for a

survivor pension may, under certain conditions, be eligible for

a transitional benefit.

Earnings-related orphan’s pension: The insured had 3 years’

earnings above the base amount. Orphans must be under

age 18 (under age 20 if a full orphan and a student).

Old-Age Benefits

Old-age pension

Universal old-age pension: Up to 100% of the base amount if

single; 150% for an aged couple. The full pension is paid

with 40 years’ coverage.

Partial pension: A proportionately reduced pension is paid

for a coverage period shorter than 40 years.

Dependent supplement (income-tested): 50% of the

insured’s pension for a dependent spouse who is not drawing

an old-age pension; 40% of the base amount for each

dependent child under age 18.

Special supplement: 79.33% of the base amount for a single

person. A proportionally reduced supplement is paid for a

coverage period shorter than 40 years.

Benefit adjustment: Benefits are adjusted automatically for

changes in general price and income levels, corresponding

with adjustments made to the base amount.

Earnings-related old-age pension: 42% of the current base

amount multiplied by the insured’s average annual number of

pension points in the 20 years with the most points. The

number of pension points in a year equals the difference

between the worker’s pensionable earnings and the year’s

base amount divided by the base amount.

The maximum earnings for benefit purposes are 6 times the

base amount plus 1/3 of income between 6 times and 12 times

the base amount. The limit is 7 points per year.

The full pension is paid with 20 years’ coverage for persons

born before 1917; the coverage requirement increases for

persons born in 1917 or later, up to a maximum of 40 years.

Partial earnings-related pension: A proportionately reduced

pension is paid for an incomplete coverage period.

Earnings adjustment: Recorded earnings, wage limits, and

pensions in force are adjusted automatically for changes in

general price and income levels, corresponding with

adjustments made to the base amount.

Permanent Disability Benefits

Disability pension

Universal disability pension: Up to 100% of the base amount

if totally disabled. The insured must have 40 years of coverage

for a full pension. Years of coverage are credited as if the

insured worked to age 67, if certain coverage conditions are

met.

Partial pension: The pension is reduced in proportion to the

assessed loss of earning capacity.

The minimum disability pension is 50% of the projected oldage benefit.

Dependent supplement (income-tested): 50% of the pension

for a spouse aged 60 or older; 30% of the base amount for each

child under age 18; 533 kroner to 2,668 kroner a month for

substantially increased expenses; up to 61.55% of the base

amount if ineligible for the earnings-related pension.

Constant-attendance supplement: Normally, 888 kroner a

month; may be increased to 5,730 kroner a month.

Benefit adjustment: Benefits are adjusted automatically for

changes in general price and income levels, corresponding

with adjustments made to the base amount.

Earnings-related disability pension: 42% of the current base

amount multiplied by the insured’s average annual number of

pension points in the 20 years with the most points. The

number of pension points in a year equals the difference

between the worker’s pensionable earnings and the year’s

base amount divided by the base amount. Years of coverage

are credited as if the insured worked to age 67, if certain

coverage conditions are met.

The maximum earnings for benefit purposes are 6 times the

base amount plus 1/3 of income between 6 times and 12 times

the base amount. The limit is 7 points per year.

Temporary disability benefit: 66% of earnings up to six times

the base amount in the year before the onset of disability or

the average of the last 3 years, whichever is higher. The

benefit is payable for 1 to 4 years; may be extended if a return

to work is deemed probable.

The minimum benefit is 1.8 times the base amount.

Partial pension: The pension is reduced proportionately for

persons with shorter periods of coverage.

Earnings adjustment: Recorded earnings, wage limits, and

pensions in force are adjusted automatically for changes in

general price and income levels, corresponding with

adjustments made to the base amount.

Survivor Benefits

Survivor pension

Universal survivor pension: Up to 100% of the base amount.

The full pension is paid if the insured had 40 years of

coverage, with coverage projected through to age 66.

Income test: If the surviving spouse’s income exceeds 1/2 of

the base amount, the pension equals the difference between
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the full pension and 40% of the excess of spouse’s income

above 1/2 the base amount.

Special supplement: 79.33% of the base amount if ineligible for

the earnings-related pension. The supplement is reduced

proportionately if the insured had less than 40 years of

coverage.

Child care benefit: The benefit depends on annual income.

Universal orphan’s pension: 40% of the base amount for the

first child, 25% for each additional child under age 18. Full

orphans under age 18 (under age 20 if a student) receive the

full survivor pension (the basic plus earnings-related pension)

of the parent who was entitled to the highest amount; 40% of

the base amount is paid for the second child and 25% for each

additional child. The pension is divided equally if there are

two or more children.

Earnings-related survivor pension: 55% of the insured’s

earnings-related pension, with coverage projected as if the

insured had worked to age 67.

Transitional benefit: The benefit is equal to the value of the

universal survivor pension plus the earnings-related survivor

pension; if the insured was not eligible for an earnings-related

pension, the benefit is equal to the value of the universal

survivor pension plus the special supplement.

Earnings-related orphan’s pension: 40% of the base amount

for the first child, 25% for each additional child under

age 18. Full orphans under age 18 (under age 20 if a student)

receive the full survivor pension (the basic plus earningsrelated pension) of the parent who was entitled to the highest

amount; 40% of the base amount is paid for the second child

and 25% for each additional child. The pension is divided

equally if there are two or more children.

Funeral grant: An income-tested benefit of up to

15,540 kroner.

Benefit adjustment: Benefits are adjusted automatically for

changes in general price and income levels, corresponding

with adjustments made to the base amount.

Administrative Organization

Ministry of Health and Ministry of Social Affairs provide

general supervision.

National Insurance Administration administers the program

nationally.

National Insurance Administration’s county offices administer

county programs and supervise local offices.

Local insurance offices administer the program locally.

Generally, contributions, including employers’ contributions,

are collected through local tax offices. There is normally

one office in each municipality.

Sickness and Maternity

Regulatory Framework

First law: 1909.

Current law: 1997 (national insurance).

Type of program: Social insurance system. Cash and medical

benefits.

Coverage

Cash benefits: Employed and self-employed persons with

income of not less than 1/2 the base amount. This income

limit does not affect the employer’s obligation to pay cash

benefits for first 16 calendar days.

The base amount equals 56,861 kroner as of January 1, 2004,

and varies automatically with changes in general price and

income levels, subject to adjustment once or twice a year.

Medical benefits: All residents, including resident noncitizen

seamen serving on Norwegian ships.

Special provisions (for medical benefits) for seamen,

military personnel, and (for cash benefits) fishermen, casual

workers, and the temporarily unemployed.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Self-employed person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability,

and Survivors, above. In addition, the employer pays the total

cost of cash sickness benefits for the first 16 days.

Government: National government meets any deficit.

There is no maximum earnings ceiling for contribution

purposes.

Qualifying Conditions

Cash sickness benefit: 28 days (4 weeks) of employment or

self-employment.

Cash maternity benefit: Six months of employment or selfemployment during the past 10 months (The qualifying

condition may be met by the mother, father, or both).

Maternity grant: Paid to insured mothers who are not

entitled to cash maternity benefits.

Additional grant: Payable to widowed, divorced, separated,

or unwed mothers with 3 years of insurance coverage

immediately before the claim.

Sickness and Maternity Benefits

Sickness benefit: 100% of covered earnings, payable from

first full day of incapacity for up to 52 weeks; thereafter, the
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insured is covered by a rehabilitation allowance or disability

pension.

The maximum earnings for benefit purposes are 6 times the

base amount.

Self-employed persons receive 65% of assessed covered

earnings after a 16-day waiting period (may voluntarily insure

for 100% of earnings, a shorter waiting period, or both).

Casual workers and the temporarily unemployed receive 65%

of assessed earnings after a 14-day waiting period.

Parental care leave: To care for a sick child under age 12, the

mother and father are entitled to 10 days per year each (single

parent, 20 days); for more than two children, 15 days each

(single parent, 30 days); for a disabled or chronically ill child

under age 18, 20 days each (single parent, 40 days); for a sick

child under age 18 and if the illness is potentially lifethreatening, as long as it is necessary for the treatment of the

child.

Maternity benefit: 100% of covered earnings (self-employed,

65% of assessed earnings) for 42 weeks; alternatively, 80% for

52 weeks to insured parents (mother or father). The mother is

required to take 3 weeks of the benefit period before the

expected date of childbirth and at least 6 weeks immediately

after giving birth; 4 weeks of the total maternity cash benefit

period are reserved for the father as the “Father Quota.” A

reduced workweek may count as partial maternity benefit.

Maternity grant: 33,584 kroner if not receiving maternity

benefit (also paid in the case of adoption); 1,765 kroner for

giving birth at home.

Additional grant: Additional benefit is payable to widowed,

divorced, separated, or unwed mothers.

Workers’ Medical Benefits

Cash refunds of part or all of medical expenses; or service

benefits furnished by providers under contract with funds.

Benefits include part of doctors’ fees (patients pay

117 kroner per consultation in most cases) and free care in a

public hospital. Patients pay 36% of expenses for listed

essential medicines (up to 450 kroner per prescription),

laboratory services, and transportation in excess of 110 or

220 kroner per trip (free hospital choice after referral from

doctor).

Patient’s own expenses, including those for children aged 7 to

16, with certain exemptions for special diseases are limited

to 1,550 kroner for 2004. The ceiling is set annually by

Parliament. When the ceiling is reached, the patient is

entitled to free treatment for the remainder of the year.

Children aged 6 or younger have no copayments.

Pensions are reduced from the second month of institutional

care; sickness benefit, from the fourth month.

There is no limit on duration.

Dependents’ Medical Benefits

Dependents are insured in their own right. Coverage is based

on residency.

Administrative Organization

Ministry of Health and Ministry of Social Affairs provide

general supervision.

National Insurance Administration administers the program

nationally.

National Insurance Administration’s county offices administer

county programs and supervise local offices.

Local insurance offices administer the program locally.

Work Injury

Regulatory Framework

First law: 1894.

Current law: 1997 (national insurance).

Type of program: Social insurance system.

Coverage

Employed persons, including personnel on Norwegian ships,

fishing vessels, and permanent or movable installations on the

Norwegian Continental Shelf (including noncitizens);

students; and military personnel.

Self-employed persons may insure voluntarily.

Source of Funds

Insured person: None.

Self-employed person: 0.4% of income, as assessed for

national tax purposes.

Employer: See source of funds under Old Age, Disability,

and Survivors, above. Contribution rates are reduced in

certain geographic areas, except for enterprises in certain

sectors.

Government: National government meets any deficit.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

The cash sickness benefit provided under Sickness and

Maternity is payable in case of work injury for up to

50 weeks; thereafter, the insured becomes entitled to

rehabilitation allowances or a disability pension.
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Permanent Disability Benefits

Permanent disability pension

Universal permanent disability pension: 100% of the base

amount if totally disabled. (The pension is not reduced for a

coverage period shorter than 40 years.)

Disability supplement: Up to 100% of the base amount if

totally disabled and with 40 years of coverage for a full

pension. The supplement is computed as if the insured was

covered through to age 66, if certain coverage conditions are

met.

Earnings-related disability pension: 42% of the current base

amount multiplied by the insured’s average annual number of

pension points in the 20 years with the most points. The

number of pension points in a year equals the difference

between the worker’s earnings and the year’s base amount

divided by the base amount. Years of coverage are credited as

if the insured worked to age 67, if certain coverage

conditions are met.

The maximum earnings for benefit purposes are 6 times the

base amount plus 1/3 of income between 6 times and 12 times

the base amount. The limit is 7 points per year. The base

amount equals 56,861 kroner as of January 1, 2004, and

varies automatically with changes in general price and income

levels, subject to adjustment once or twice a year.

The full pension is paid with 20 years’ coverage for persons

born before 1917; the coverage requirement increases for

persons born in 1917 or later, up to a maximum of 40 years.

Partial earnings-related pension: A proportionately reduced

pension is paid for an incomplete coverage period.

Earnings adjustment: Recorded earnings, wage limits, and

pensions in force are adjusted automatically for changes in

general price and income levels, corresponding with

adjustments made to the base amount.

Workers’ Medical Benefits

Comprehensive care is provided, including appliances.

Cost sharing: There is no cost sharing.

Survivor Benefits

Survivor pension: Up to 100% of the base amount. The full

pension is paid if the insured had 40 years of coverage, with

coverage projected through to age 66.

Income test: If the surviving spouse’s income exceeds 1/2 of

the base amount, the pension equals the difference between

the full pension and 40% of the excess of the spouse’s income

above 1/2 the base amount.

Special supplement: 79.33% of the base amount if ineligible

for the earnings-related pension. The supplement is reduced

proportionately if the insured had less than 40 years of

coverage.

Child care benefit: The benefit depends on annual income.

Orphan’s pension: 40% of the base amount for the first child,

25% for each additional child under age 18. Full orphans under

age 18 (under age 20 if a student) receive the full survivor

pension (the basic plus earnings-related pension) of the parent

who was entitled to the highest amount; 40% of the base

amount is paid for the second child and 25% for each

additional child. The pension is divided equally if there are

two or more children.

Administrative Organization

Ministry of Health and Ministry of Social Affairs provide

general supervision.

National Insurance Administration administers the program

nationally.

National Insurance Administration’s county offices administer

county programs and supervise local offices.

Local insurance offices administer the program locally.

Unemployment

Regulatory Framework

First law: 1906.

Current law: 1970.

Type of program: Social insurance system.

Coverage

Employed persons, including public employees, and seamen;

self-employed persons aged 64 or older, under special

circumstances.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability,

and Survivors, above. Contribution rates are reduced in

certain geographic areas, except for enterprises in certain

sectors.

Government: National government meets any deficit.

There are no maximum earnings for contribution purposes.

Qualifying Conditions

Unemployment benefit: Annual earnings in the last year

before unemployment (or average earnings during the 3 years

before unemployment, if higher) of at least 75% of the base

amount at the time of making a claim to the benefit. Must be

registered at a public employment office and be able and

willing to work. Unemployment is not due to voluntary

leaving, discharge for misconduct, participation in a labor

dispute, or the refusal of a suitable offer or retraining

(disqualification for at least 4 weeks).
172 ♦ SSPTW: Europe, 2004

Norway

Unemployment Benefits

0.2% of annual income a day, up to 6 times the base amount.

The benefit is payable after a 3-day waiting period. The benefit

is paid for up to 78 weeks if annual income before

unemployment was less than 90,740 kroner; 156 weeks if

income was 90,740 kroner or more.

The maximum daily benefit is 745 kroner, plus 17 kroner a

day for each dependent child under age 18.

Administrative Organization

Ministry of Labor and Municipal Affairs provides general

supervision.

Directorate of Labor administers the program nationally, with

benefits paid through local insurance offices.

Local employment offices administer the program locally.

Family Allowances

Regulatory Framework

First law: 1946.

Current law: 2002.

Type of program: Universal system.

Coverage

All resident children.

Source of Funds

Insured person: None.

Employer: None.

Government: Total cost.

Qualifying Conditions

Family allowances: Child must be under age 18.

Family Allowance Benefits

Family allowances: 11,640 kroner a year for each child.

Single parents receive benefits for one child more than is

actually supported (extended child benefit). Single parents of

children under age 3 who are entitled to extended child

benefit and full transitional benefit under the National

Insurance Act may also receive an extra infant supplement of

7,920 kroner a year. Beneficiaries living in the Arctic region

receive an annual supplement of 3,840 kroner per child. The

allowance is payable monthly.

Cash benefit for families with small children: Child must be

between ages 1 and 3. To receive the full benefit (43,884 kroner

per year per child), the child must not be in a day care center

that receives a state grant. If the child, according to

agreement, is in a day care center less than 33 hours a week,

the family may be entitled to a reduced cash benefit.

Administrative Organization

Ministry of Health and Ministry of Social Affairs provide

general supervision.

National Insurance Administration administers the program

nationally and supervises local offices.

National Insurance Administration’s county offices administer

the county programs and supervise local offices.

Local insurance offices administer allowances locally.
SSPTW: Europe, 2004 ♦ 173

Poland

Poland

Exchange rate: US$1.00 equals 3.74 zlotys.

Old Age, Disability, and Survivors

Regulatory Framework

First laws: 1927 (salaried employees) and 1933 (wage earners).

Current law: 1998, with amendments, implemented in 1999.

Type of program: Notional defined contribution (NDC) social

insurance and mandatory individual account system for oldage benefits; social insurance system for disability and

survivor benefits.

Note: A new system consisting of a modified social insurance

first pillar (notional defined contributions, NDC) plus a second

pillar of mandatory individual accounts was implemented in

April 1999. Persons born after December 31, 1968, joined the

new system; those born after December 31, 1948, could choose

to join the new system. Those born before January 1, 1949,

remain in the old social insurance system.

Coverage

All economically active persons.

Exclusions: Individual farmers, public prosecutors, and judges.

Voluntary insurance for students, Polish citizens working

abroad, persons taking care of a family member, and persons

opting to continue coverage.

Special systems for individual farmers, the military, and the

police.

Source of Funds

Insured person: 9.76% of gross salary for old-age pensions

(2.46%, first pillar; 7.3%, second pillar) and 6.5% of gross

salary for disability and survivor pensions.

Employer: 9.76% of gross payroll for old-age pensions

(9.76%, first pillar; 0%, second pillar) and 6.5% of gross payroll

for disability and survivor pensions.

Government: Total cost of the guaranteed minimum pension.

Pays pension contributions on behalf of insured persons

taking child care leave or receiving maternity allowances and

for unemployed persons (receiving unemployment benefit or

unemployed graduates).

The maximum annual earnings for contribution purposes are

30 times the average national monthly earnings forecast for a

given year (68,700 zlotys in 2004).

Qualifying Conditions

Old-age pension (old system): Age 65 with 25 years of

insurance (men) or age 60 with 20 years of insurance (women).

Noncontributory years may not exceed 1/3 of contributory

years. The age requirement is reduced for dancers, acrobats,

miners, and persons in underground or unhealthy work,

teaching, aviation, and maritime employment.

Partial pension: A partial pension is paid if the insured does

not satisfy the contribution condition at retirement age.

The pensionable age is reduced by 5 years for women with

30 years of insurance, for war veterans, and for the disabled.

Nursing allowance: Payable to persons aged 75 or older.

Old-age pension (new system): Age 65 (men) or age 60

(women). There is no early pension.

Guaranteed minimum pension: Paid if the total amount of firstand second-pillar pensions (old-age pension and the annuity

from the individual account) is below the legal minimum oldage pension. On reaching the statutory retirement age, the

insured must have a total of at least 20 years (women) or

25 years (men) of insurance from full-time employment.

Disability pension: Total disability (incapacity for any work)

or partial disability (greatly impaired earning capacity or total

incapacity for usual work) with 5 years of insurance during the

last 10 years (1 to 4 years if under age 30). Noncontributory

years may not exceed 1/3 of contributory years. The disability

occurred during the insurance period or within 18 months of

the cessation of contributions.

Nursing allowance: Payable to persons certified as disabled.

Training pension: Paid to a person who is no longer capable

of work in his or her previous occupation and is undergoing

vocational retraining. The pension is paid for 6 months; may

be paid for up to 30 months if necessary.

Survivor pension: The deceased was a pensioner or met the

coverage requirement for a disability or old-age pension at the

time of death.

Eligible survivors are dependent children under age 16 (age 25

if a student, no limit if disabled and the disability began before

age 16 or before age 25 if a student); a widow(er) aged 50 at the

time of the insured’s death, or incapable of work, or rearing a

child under age 16 (under age 18 if a student), or caring for a

disabled child whose disability began before age 16 or before

age 25 if a student (a divorced spouse must be entitled to

alimony and meet the qualifying requirements applied to a

widow(er)); and parents if they were dependent on the

deceased and fulfill the requirements applied to a widow(er).

Funeral grant: Covers the cost of the funeral for the death of

the insured, a pensioner, or a member of his or her family.

Old-Age Benefits

Old-age pension

Old-age pension (old system): 24% of national average

earnings, plus 1.3% of the insured’s earnings times the number

of contribution years, plus 0.7% of the insured’s earning times

the number of noncontributory years (for example, for years

spent rearing children). Noncontributory years may not exceed

1/3 of contributory years.
174 ♦ SSPTW: Europe, 2004

Poland

The insured’s earnings for pension calculation purposes are

equal to average monthly earnings during 10 consecutive

calendar years chosen by the insured from the 20 years before

the year of the pension application or during 20 years selected

from the total insurance period. Previous earnings are adjusted

for inflation.

The maximum earnings for benefit calculation purposes for

each contributory year are equal to 250% of the average

national monthly salary.

The average national monthly salary is 2,332.17 zlotys (March

2004).

The minimum monthly pension is 562.58 zlotys (March 2004).

Nursing allowance: 144.25 zlotys a month (March 2004).

Earnings test: The pension is reduced if the insured is under

the statutory retirement age, is gainfully employed, and

receives income that is higher than 70% but lower than 130%

of the average national salary. If the income received exceeds

130% of the average national salary, the pension is suspended.

There is no earnings test after reaching the statutory retirement

age.

Benefit adjustment: Pensions are automatically adjusted

according to price increases when the aggregate growth of the

consumer price index exceeds 5%.

Old-age pension (new system): The pension is based on the

total value of contributions paid to the old-age insurance

scheme (subject to adjustment) divided by average life

expectancy at the age of retirement.

Mandatory individual account (new system): An annuity is

purchased with the funds from the individual account.

Guaranteed minimum pension: Paid if the total amount of firstand second-pillar pensions (old-age pension and the annuity

from the individual account) is below the legal minimum oldage pension.

Permanent Disability Benefits

Disability pension (old and new systems): For a total

disability, the benefit is calculated as 24% of the average

national salary, plus 1.3% of the insured’s earnings times the

number of contribution years, plus 0.7% of the insured’s

earnings times the number of noncontributory years, plus 0.7%

of the insured’s earnings times the number of projected years

needed to give a maximum of 25 years of coverage, from the

day of application to the insured’s 60th birthday.

Noncontributory years may not exceed 1/3 of contributory

years.

The insured’s earnings for pension calculation purposes are

equal to average monthly earnings during 10 consecutive

calendar years chosen by the insured from the 20 years before

the year of the pension application or during 20 years selected

from the total insurance period. Previous earnings are adjusted

for inflation.

The maximum earnings for benefit calculation purposes for

each contributory year are equal to 250% of the average

national monthly salary.

The average national monthly salary is 2,332.17 zlotys (March

2004).

Earnings test: The pension is reduced if the insured is under

the statutory retirement age, is gainfully employed, and

receives income that is higher than 70% but lower than 130%

of the average national salary. If the income received exceeds

130% of the average national salary, the pension is suspended.

There is no earnings test after reaching the statutory retirement

age.

The monthly minimum pension for total disability is

562.58 zlotys (March 2004).

Partial disability pension: 75% of the benefit paid for total

disability.

The monthly minimum pension for partial disability is

432.74 zlotys (March 2004).

Benefit adjustment: Pensions are automatically adjusted

according to price increases when the aggregate growth of the

consumer price index exceeds 5%.

Nursing allowance: 144.25 zlotys a month (March 2004).

Training pension: The pension is calculated using 75% of the

earnings used for calculating the insured’s disability pension.

The monthly minimum training pension is 100% of the monthly

minimum pension for partial disability.

Survivor Benefits

Survivor pension (old and new systems): The pension

varies with the number of survivors. One survivor receives

85% of the insured’s old-age pension; two survivors receive

90%; three or more survivors receive 95%. If the insured was

not eligible for the old-age pension, the disability pension

forms the basis for the calculation of the survivor pension.

Earnings test: The pension is reduced if the survivor is under

the statutory retirement age, is gainfully employed, and

receives income that is higher than 70% but lower than 130%

of the average national salary. If the income received exceeds

130% of the average national salary, the pension is suspended.

There is no earnings test after reaching the statutory retirement

age.

Full orphan supplement: 271.12 zlotys a month (March 2004).

The minimum survivor pension is 562.58 zlotys a month

(March 2004).

Benefit adjustment: Pensions are automatically adjusted

according to price increases when the aggregate growth of the

consumer price index exceeds 5%.

Funeral grant: A lump sum of twice the average national

salary in force on the day of the insured’s death. The grant is

4,664.34 zlotys (June 2004).

Administrative Organization

Old system: Ministry of Social Policy provides general

supervision.
SSPTW: Europe, 2004 ♦ 175

Poland

Social Insurance Institute administers the program through

51 branch offices.

The Institute and branch offices are supervised by tripartite

boards composed of representatives of government, the

insured, and employers.

Ministry of Social Policy provides general supervision for the

farmers’ program.

Agricultural Social Security Fund administers the farmers’

program.

New system: Social Insurance Institute administers the

program.

Pension fund supervision office controls mandatory individual

account providers.

Sickness and Maternity

Regulatory Framework

First law: 1920.

Current law: 1999.

Type of program: Social insurance system. Cash and medical

benefits.

Coverage

All employees.

Voluntary coverage for medical benefits for pensioners, selfemployed persons, artists, and authors.

Special systems for individual farmers, the military, and the

police.

Source of Funds

Insured person: 10.7% of earnings (2.45% for cash benefits

and 8.25% for medical benefits).

Employer: None; the labor code requires the employer to

provide cash benefits for the first 33 days of incapacity.

Government: Subsidies for medical benefits.

Qualifying Conditions

Cash sickness and maternity benefits: Currently in insured

employment with 30 days of uninterrupted insurance; 180 days

of uninterrupted insurance for the voluntarily insured.

Incapacity for work due to an accident on the way to or from

work is covered under sickness insurance.

Medical benefits: Persons covered by social insurance,

persons receiving social benefits, as well as nonemployed

persons, including persons in full-time education and the

unemployed.

Sickness and Maternity Benefits

Sickness benefit: 80% of average earnings during the

preceding 6 months (70% in the case of hospitalization) is paid

for 90 days; thereafter, the benefit is 100% of earnings. The

benefit is 100% of earnings from the first day of incapacity if

the incapacity begins during pregnancy or is due to an

accident on the way to or from work.

The benefit is payable from the first day of incapacity for up to

26 weeks (may be extended to 39 weeks if recovery is likely or

in the case of tuberculosis). The employer pays the benefit for

the first 33 days.

Rehabilitation allowance: If recovery is likely, entitlement to

sickness benefit may be followed by entitlement to

rehabilitation benefit. The benefit is paid at 75% of earnings

for up to 12 months.

Compensatory allowance: Payable to employees to

compensate for lost earnings resulting from a loss in working

capacity. The insured must undergo vocational rehabilitation

for a period not longer than 24 months. The benefit is equal to

the difference between the insured’s average salary during the

last 3 months and the earnings received during vocational

rehabilitation.

Maternity benefit: 100% of average earnings during the

preceding 6 months is payable for 16 weeks for the birth of the

first child; 18 weeks for all subsequent births. For multiple

births, the benefit is payable for 26 weeks.

Care allowance: 80% of average earnings during the

preceding 6 months is payable for a maximum period of 60 days

per calendar year if the insured takes leave from work to care

for a healthy child under age 8 or a sick child under age 14. A

care allowance may be awarded for a maximum of 14 days to

care for any other sick family member. The total period of

receiving care allowance must not exceed 60 days in a calendar

year.

Workers’ Medical Benefits

Medical services are provided directly to patients by private

health care providers contracted by the National Health Fund.

Benefits include general and specialist care, hospitalization,

and basic prescription drugs. Government provides a partial

subsidy for basic prescription drugs. Patients may choose the

doctor and hospital.

There is no limit on the duration if employed; if employment

ceases, 26 weeks (may be extended to 39 weeks).

Dependents’ Medical Benefits

Medical services are provided directly to patients by private

health care providers contracted by the National Health Fund.

Benefits include general and specialist care, hospitalization,

and basic prescription drugs. Government provides a partial

subsidy for basic prescription drugs. Patients may choose the

doctor and hospital.
176 ♦ SSPTW: Europe, 2004

Poland

There is no limit on the duration if employed; if employment

ceases, 26 weeks (may be extended to 39 weeks).

Administrative Organization

Ministry of Social Policy supervises cash benefits.

Social Insurance Institute administers cash benefits.

Ministry of Health supervises medical benefits.

National Health Fund administers public health funds and

contracts medical services.

Work Injury

Regulatory Framework

First law: 1984.

Current laws: 2002 (cash benefits) and 2003 (medical

benefits).

Type of program: Social insurance system.

Coverage

All economically active persons.

Exclusions: Individual farmers, public prosecutors, and judges.

Special systems for individual farmers, the military, and the

police.

Source of Funds

Insured person: None.

Employer: From 0.97% to 3.86% of payroll, according to the

assessed degree of risk and the number of employees.

Government: The cost of specialized procedures and public

health promotion.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

Temporary disability benefit: 100% of average earnings

during the preceding 6 months is payable from the first day of

incapacity for up to 26 weeks (may be extended to 39 weeks).

Rehabilitation allowance: If recovery is likely, entitlement to

temporary disability benefit may be followed by entitlement to

rehabilitation allowance. The allowance is 100% of earnings,

for up to 12 months.

Permanent Disability Benefits

Permanent disability benefit: For a total disability, the

benefit is calculated as 24% of the average national salary, plus

1.3% of the insured’s earnings times the number of

contribution years, plus 0.7% of the insured’s earnings times

the number of noncontributory years, plus 0.7% of the

insured’s earnings times the number of projected years needed

to give a maximum of 25 years of coverage from the day of

application to the insured’s 60th birthday. Noncontributory

years may not exceed 1/3 of contributory years. The benefit

may not be less than 80% of insured earnings.

The insured’s earnings for benefit calculation purposes are

equal to average monthly earnings during 10 consecutive

calendar years chosen by the insured from the 20 years before

the year of the pension application or during 20 years selected

from the applicant’s total insurance period. Previous earnings

are adjusted.

The maximum earnings for benefit calculation purposes are

equal to 250% of the average national monthly salary. The

average national monthly salary is 2,332.17 zlotys (March

2004).

The minimum benefit is set by law, subject to indexation, and

must not be lower than 120% of the regular minimum old-age

pension.

Earnings test: The benefit is reduced if the insured is under

the statutory retirement age, is gainfully employed, and

receives income that is higher than 70% but lower than 130%

of the average national salary. If the income received exceeds

130% of the average national salary, the pension is suspended.

There is no earnings test after reaching the statutory retirement

age.

Nursing allowance: 144.25 zlotys a month (March 2004).

Partial disability benefit: 80% of the benefit paid for a total

incapacity for work resulting from a work injury or an

occupational disease; not less than 60% if partially incapable

of work.

The minimum benefit is set by law, subject to indexation, and

must not be lower than 120% of the regular minimum old-age

pension.

Training benefit: 100% of the earnings used for calculating

the disability benefit. The benefit is awarded under the same

conditions as for the training pension under pension

insurance.

The minimum benefit is set by law, subject to indexation, and

must not be lower than 120% of the regular minimum old-age

pension.

Lump-sum compensation: Paid for permanent or long-term

health damage as the result of a work injury or an occupational

disease. The compensation is equal to 17% of average

monthly earnings for each percentage of permanent or longterm health damage (will increase gradually to reach 20% by

the end of the first quarter of 2007). The lump sum is increased

by 3.5 times average monthly earnings if the insured needs

constant attendance.

Workers’ Medical Benefits

All necessary medical care is provided. The cost of medical

services is met by the National Health Fund.
SSPTW: Europe, 2004 ♦ 177

Poland

Survivor Benefits

Survivor pension: The pension varies with the number of

survivors. One survivor receives 85% of the insured’s work

injury disability pension (total disability); two survivors, 90%;

three or more survivors, 95%.

The minimum benefit is set by law, subject to indexation, and

may not be lower than 120% of the minimum survivor pension

(see Old Age, Disability, and Survivors, above).

Eligible survivors are dependent children under age 16 (age 25

if a student, no limit if disabled and the disability began before

age 16 or before age 25 if a student); a widow(er) aged 50 at the

time of the insured’s death, or incapable of work, or rearing a

child under age 16 (under age 18 if a student), or caring for a

disabled child whose disability began before age 16 or before

age 25 if a student (a divorced spouse must be entitled to

alimony and meet the qualifying requirements applied to a

widow(er)); and parents if they were dependent on the

deceased and fulfill the requirements applied to a widow(er).

Lump-sum compensation for family members: Equal to 18

times average monthly earnings if there is a surviving spouse

or one child, plus 3.5 times average monthly earnings for the

second and each subsequent survivor; 9 times average

monthly earnings if there is no surviving spouse or child, plus

3.5 times average monthly earnings for the second and each

subsequent survivor.

Administrative Organization

Ministry of Social Policy provides general supervision of cash

benefits.

Social Insurance Institute administers cash benefits.

Ministry of Health provides general supervision of medical

benefits.

Agricultural Social Security Fund administers the farmers’

program.

Unemployment

Regulatory Framework

First law: 1924.

Current law: 1994, with amendments.

Type of program: Social insurance system.

Coverage

Employed persons.

Source of Funds

Insured person: None.

Employer: 2.45% of payroll.

Government: Any deficit is met from the state budget.

Qualifying Conditions

Unemployment benefit: The insured must be over age 18, be

registered with the employment bureau, be able and ready to

work, be involuntarily unemployed, have not received any

redundancy pay or compensation, and had earnings equal to at

least the minimum wage during at least 365 days within the 18-

month period preceding the day of registration. Military

service, parental leave, and allowances periods are credited

toward the period of 365 days.

Preretirement benefit: The insured is unemployed, eligible to

receive unemployment benefit, and aged 63 with 25 years of

insurance (men) or aged 58 with 20 years of insurance

(women); aged 60 with 25 years of insurance (men) and

involuntarily unemployed or aged 55 with 20 years of

insurance (women) and involuntarily unemployed; or any age

and involuntarily unemployed with 40 contributory and

noncontributory years of coverage (men) or 35 contributory

and noncontributory years of coverage (women).

Unemployment Benefits

A flat-rate base amount (504.20 zlotys in 2004) for those with

between 5 and 20 years of employment; 80% of the base

amount with less than 5 years; 120% of the base amount for

more than 20 years. The benefit is payable for 6 to 18 months,

depending on the unemployment rate in the region.

The benefit is subject to indexation.

Preretirement benefit: The benefit is 90% of the old-age

pension that would be due at age 65 (men) or age 60 (women).

Administrative Organization

Ministry of Social Policy provides general supervision.

Voivodships (provinces) and local labor bureaus keep registry

of unemployed persons and work possibilities and pay

benefits.

Institute of Social Security collects payroll contributions from

enterprises.

Family Allowances

Regulatory Framework

First law: 1947.

Current law: 2004.

Type of program: Universal system.

Coverage

All residents.
178 ♦ SSPTW: Europe, 2004

Poland

Source of Funds

Insured person: None.

Employer: None.

Government: Total cost.

Qualifying Conditions

Family allowances (means-tested): The child must be under

age 18 (age 21 if in secondary education; age 24 with a learning

disability). The family’s per capita average monthly income did

not exceed 504 zlotys in the preceding calendar year (583 zlotys

for families with a disabled child). The allowance is payable to

a mother, father, or guardian.

Childbirth supplement (means-tested): Eligible for family

allowances. The supplement is payable to a mother, father, or

guardian for each child born after April 30, 2004.

Parental leave supplement (means-tested): Eligible for family

allowances and taking parental leave for a child under age 4

(age 18 if disabled). The leave period is 24 months for one

child; 36 months for multiple births; 72 months in the case of a

disabled child. The supplement is payable to a mother, father,

or guardian entitled to child care leave.

Single parent’s young child supplement (means-tested): Paid

to a single parent who is eligible for family allowances but not

for unemployment benefit. The child must be under age 7. The

supplement is payable to a mother, father, or guardian for a

maximum of 3 years.

Single parent’s child supplement (means-tested): Paid to a

single parent who is eligible for family allowances and meets

the income test (alimony is excluded). The child must be under

age 18 (age 21 if a student; age 24 with a learning disability).

The supplement is payable to a mother, father, or guardian.

Education and rehabilitation supplement (means-tested):

Payable for up to 12 months to cover part of the cost of the

rehabilitation or education of a disabled child under age 16

(age 24 if moderately or severely disabled). The supplement is

payable to a mother, father, or guardian.

Beginning of school year supplement (means-tested): Payable

in September each year to children entitled to family

allowances. The supplement is payable to a mother, father, or

guardian.

School travel and board supplement (means-tested): Payable

for 10 months (from September to June) to children entitled to

family allowances. When the school is distant from the child’s

home, the supplement covers part of the travel or boarding

costs necessary to attend school. The supplement is payable

to a mother, father, or guardian.

Nursing allowance (means-tested): Paid to persons

incapable of living independently, disabled children under

age 16 (older than age 16 if severely disabled), adults with a

moderate degree of disability whose disability began before

age 21, and persons aged 75 or older.

Nursing benefit (means-tested): Paid to persons who resign

from economic activity to care for a disabled child under age 16

or an older, severely disabled person. The supplement is

payable to a mother, father, or guardian.

Family Allowance Benefits

Family allowances (means-tested): From May 1, 2004, to

August 31, 2005, 43 zlotys a month for each of the first two

children; 53 zlotys for the third child; 66 zlotys for the fourth

and subsequent children. Beginning September 1, 2005, the

amount paid will depend on the child’s age.

Childbirth supplement (means-tested): A lump sum of

500 zlotys for each child.

Parental leave supplement (means-tested): 400 zlotys a month

(May 1, 2004).

Single parent’s young child supplement (means-tested):

400 zlotys a month.

Single parent’s child supplement (means-tested): 170 zlotys a

month for each child (250 zlotys a month for each disabled

child), up to a maximum of 750 zlotys per family.

Education and rehabilitation supplement (means-tested):

50 zlotys a month for a child under age 5; 70 zlotys for a child

aged 5 to 24.

Beginning of school-year supplement (means-tested): A lump

sum of 90 zlotys.

School travel and board supplement (means-tested): 80 zlotys

a month (40 zlotys for children who commute).

Nursing allowance (means-tested): A lump sum of

144.25 zlotys (May 1, 2004).

Nursing benefit (means-tested): 420 zlotys a month (May 1,

2004).

Administrative Organization

Ministry of Social Policy provides general supervision.

Social Insurance Institute and Agricultural Social Security

Fund administer the program through 51 branch offices.

The Institute and branch offices are supervised by tripartite

boards composed of representatives of government, the

insured, and employers.
SSPTW: Europe, 2004 ♦ 179

Portugal

Portugal

Exchange rate: US$1.00 equals 0.80 euros (€).

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1935 (1919 legislation not implemented).

Current laws: 1980 (social pensions for noncontributors),

1985 (integration of agricultural workers into general

system), 1989 (voluntary insurance), 1993 and 1999

(earnings-linked pensions), 1999 (early pension), and 1999

(minimum pension).

Type of program: Social insurance and social assistance

system.

Coverage

Social insurance: Employed persons and self-employed

persons with gross annual income greater than six times the

highest minimum wage.

Voluntary coverage for self-employed persons with gross

annual income equal to or less than six times the highest

minimum wage.

Voluntary coverage for persons not covered by any other

contributory program.

Special systems for miners, longshoremen, railway workers,

fishermen, and merchant seamen. (Special systems will

gradually be unified with the general system.)

Social assistance: Persons not covered under a contributory

program.

Source of Funds

Insured person: 11% of earnings.

Self-employed person: 25.4% of reference income for

mandatory coverage and 32% of reference income for

voluntary coverage. (The reference income for contribution

purposes is chosen by the self-employed person from a range

of one to eleven times the national minimum wage. The

national minimum wage is €365.60.)

Employer: 23.75% of payroll.

All of the above contributions also finance sickness and

maternity, occupational disease (employer only),

unemployment, and family benefits. Of the total 34.75%

contributed by the insured person and employer, 16.01% is

allocated to old-age benefits, 3.42% to disability benefits, and

3.67% to survivor benefits.

Government: Subsidy for the social pension.

Qualifying Conditions

Old-age pension: Age 65 (men and women) with 15 years of

contributions (120 days of registered pay are needed for a

year to be credited).

Age 50 for miners; age 55 for longshoremen, fishermen, and

merchant seamen; age 60 for aircraft flight crew; age 55 for air

traffic controllers; age 55 for dancers or at age 45 with a

reduced pension.

The pension is payable abroad.

The pension is paid to unemployed persons at age 60 if

unemployment benefit is exhausted, at age 58 (under a special

scheme), or at age 55 with a reduced pension.

Early pension: Age 55 with at least 30 years of contributions.

Deferred pension: From age 65. Retirement from covered

employment is necessary at age 70.

Social pension: Aged 65 or older and no coverage under any

contributory social security program. Monthly income may

not exceed 30% of the national minimum wage for a single

person; 50% for a couple. The social pension is not payable

abroad unless specified in a reciprocal agreement.

Disability pension: The loss of 2/3 of earning capacity with

5 years of contributions (120 days of registered pay are

needed for a year to be credited).

The pension is payable abroad.

Social pension: Aged 18 or older if disabled and no coverage

under any contributory program. Monthly income may not

exceed 30% of the national minimum wage for a single

person; 50% for a couple. The social pension is not payable

abroad unless specified in a reciprocal agreement.

Survivor pension: The insured met the pension requirements

(3 months of registered pay are needed for a year to be

credited) or was a pensioner at the time of death.

The pension is payable abroad.

Old-Age Benefits

Old-age pension: 2% of the average adjusted lifetime salary

for each year of contributions (2% to 2.35% according to the

insured’s reference earnings for those with 21 years or more of

contributions), up to a maximum of 40 years.

The reference earnings vary between 1.1 and 8 times the

minimum wage.

For a transitional period (until 2017), pensions may be

calculated according to the former method (2% of average

annual earnings for the best 10 years out of the last 15 years

multiplied by the total number of years of insurance) or the

current method (above), or a combination of the two,

whichever is higher.

The minimum pension is either 30% of the reference earnings

used for calculating the pension or a monthly amount fixed

according to the length of the insured’s career (ranging from

€208 for a career of no more than 15 years to €325.33 for a

maximum of 40 years), whichever is higher.
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The maximum pension is 92% of the reference earnings used

for calculating the pension.

Deferred pension: An increment is paid for the deferral period.

An additional pension payment is made each Christmas and

July.

Benefit adjustment: Benefits are adjusted annually according

to changes in the cost of living.

Social pension (income-tested): €151.84 a month.

Extraordinary complementary allowance: For persons receiving

the social pension, an allowance of €14.46 up to age 69; €28.91

if aged 70 or older.

Constant-attendance supplement: 50% (€75.92) or 90%

(€136.66) of the social pension for those receiving the

contributory pension, according to degree of dependence;

45% (€68.33) or 85% (€129.06) for those receiving the

income-tested pension.

Permanent Disability Benefits

Disability pension: 2% of the average adjusted lifetime

salary for each year of contributions (2% to 2.35% according to

the insured’s reference earnings for those with 21 years or

more of contributions), up to a maximum of 40 years.

The reference earnings vary between 1.1 and 8 times the

minimum wage.

For a transitional period (until 2017), pensions may be

calculated according to the former method (2% of average

annual earnings for the best 10 years out of the last 15 years

multiplied by the total number of years of insurance) or the

current method (above), or a combination of the two,

whichever is higher.

The minimum pension is either 30% of the reference earnings

used for calculating the pension or a monthly amount fixed

accordingly to the length of the insured’s career (ranging from

€208 for a career of no more than 15 years to €325.33 for a

maximum of 40 years), whichever is higher.

The maximum pension is 92% of the reference earnings used

for calculating the pension.

An additional pension payment is made each Christmas and

July.

Benefit adjustment: Benefits are adjusted annually according

to changes in the cost of living.

Social pension (income-tested): €151.84 a month.

Extraordinary complementary allowance: For those receiving

the social pension, an allowance of €14.46 up to age 69;

€28.91 if aged 70 or older.

Constant-attendance supplement: 50% (€75.92) or 90%

(€136.66) of the social pension for those receiving the

contributory pension, according to degree of dependence;

45% (€68.33) or 85% (€129.06) for those receiving the

income-tested pension.

Survivor Benefits

Survivor pension: 60% of the insured’s pension (70% if both

the spouse and a divorced spouse are eligible) is payable to a

widow(er). The pension is limited to 5 years unless the

widow(er) is over age 35, disabled, or caring for a child.

Orphan’s pension: 20% of the insured’s pension for one

orphan, 30% for two orphans, or 40% for three or more

orphans under age 18 (age 27 if a student, no limit if

disabled); for full orphans the pension is 40%, 60%, or 80%

for one, two, or three or more beneficiaries, respectively.

Other eligible survivors (in absence of above): Parents or

grandparents. The combined survivor pension is 30%, 50%,

or 80% of the insured’s pension, for one, two, or three or

more beneficiaries, respectively.

The maximum survivor pension is 100% of the insured’s

pension.

An additional pension payment is made each Christmas and

July.

Death grant: An amount equal to six times average monthly

earnings during the best 2 of the last 5 years.

Widow(er)’s social pension (income-tested): 60% of the

social pension.

Orphan’s social pension (income-tested): The combined

benefit is 20%, 30%, or 40% of the social pension for one,

two, or three or more orphans, respectively.

Administrative Organization

Ministry of Labor and Solidarity provides general supervision

through the State Secretariat of Solidarity and Social

Security.

Solidarity and Social Security Institute administers the

program.

Sickness and Maternity

Regulatory Framework

First law: 1935 (1919 legislation not implemented).

Current laws: 1988 and 1990 (sickness); 1988, 1995, 1998,

1999, and 2000 (maternity, paternity, and adoption).

Type of program: Social insurance (cash benefits) and

universal (medical benefits) system.

Coverage

Cash sickness benefits: Employed persons.

Voluntary insurance for self-employed and certain categories

of persons not covered by any other contributory program.

Cash maternity, paternity, and adoption benefits: Employed

and self-employed persons.

Voluntary insurance for certain categories of persons not

covered by any other contributory program.
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Medical benefits: All resident citizens and foreign residents

whose country has a reciprocal agreement with Portugal.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Self-employed person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability,

and Survivors, above.

Government: Subsidy for medical benefits.

Of the total 34.75% contributed by the insured person and

employer, 3.05% is allocated to sickness benefits and 0.73% to

maternity benefits.

Qualifying Conditions

Cash sickness benefit: Six months of insurance, including

12 days of contributions in the 4 months before the onset of

illness.

Maternity, paternity, and adoption benefits: Six months of

insurance.

Sickness and Maternity Benefits

Sickness benefit: 65% of average earnings during the

6 months preceding the 2 months before the month of the

onset of illness; 70% for a long-term illness (of at least

365 days); 80% to 100% if hospitalized for tuberculosis.

The benefit is payable after a 3-day waiting period (30 days

for the self-employed). The waiting period is waived in cases

of hospitalization or tuberculosis or during the postpartum

period. The maximum duration is 1,095 days (365 days for the

self-employed), with no limit for cases of tuberculosis.

The minimum sickness benefit is either 30% of the minimum

wage in the insured’s profession or the reference earnings

used for calculating the cash sickness benefit, whichever is

lower.

Disabled or sick child allowance: Payable to provide care for

a child. The allowance is 100% of average earnings during the

6 months preceding the 2 months before receiving benefit and

is payable for a maximum of 30 days per year to each child

under age 10; without limit in cases of hospitalization. For a

serious disability or chronic illness in children under age 12,

the allowance is payable for between 6 months and 4 years.

Maternity benefit: 100% of average earnings during the

6 months preceding the 2 months before childbirth. The

benefit is payable for 120 days (90 days must be after

childbirth).

The minimum maternity benefit is 50% of the minimum wage

in the insured’s profession.

Special maternity allowance: 65% of average earnings

during the 6 months preceding the 2 months before ceasing

work. The allowance is payable to women who work at night

or whose job involves exposure to dangerous substances.

Paternity benefit: 100% of average earnings during the

6 months preceding the 2 months before childbirth, payable for

5 days.

Paternity benefit is not payable to self-employed persons.

The minimum paternity benefit is 50% of the minimum wage in

the insured’s profession.

Adoption benefit: 100% of average earnings during the

6 months preceding the 2 months before adoption, payable

for the first 100 days following the adoption of a child under

age 15.

The minimum adoption benefit is 50% of the minimum wage

in the insured’s profession.

Parental leave benefit: 100% of average earnings during the

6 months preceding the 2 months before parental leave is

taken. The benefit is payable to the father for 15 days but only

if preceded by paternity or maternity leave. The parental leave

period is credited when calculating the disability or old-age

pension.

Special leave benefit for grandparents: 100% of average

earnings during the 6 months preceding the 2 months before

childbirth. The benefit is payable for 30 days following the

birth of a grandchild if the parent of the newborn child is a

minor and living in the family home.

Special leave benefit for grandparents is not payable to selfemployed persons.

Workers’ Medical Benefits

Medical services are provided directly to patients by health

centers and hospitals. Benefits include general and specialist

care, maternity care, hospitalization, surgery, and listed

medicines. Some cost sharing.

There is no limit to duration.

Dependents’ Medical Benefits

Medical services are provided directly to patients by health

centers and hospitals. Benefits include general and specialist

care, maternity care, hospitalization, surgery, and listed

medicines. Some cost sharing.

There is no limit to duration.

Administrative Organization

Ministry of Labor and Solidarity, through the State Secretariat

of Solidarity and Social Security, provides general

supervision.

Regional Social Security Centers administer cash benefits.

Regional Health Administrations administer medical benefits.
182 ♦ SSPTW: Europe, 2004

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Work Injury

Regulatory Framework

First law: 1913.

Current laws: 1997, 1999, and 2001.

Type of program: Employer must purchase liability insurance

for work injury with a private carrier. Social insurance system

for occupational diseases.

Coverage

Employed and self-employed persons.

Source of Funds

Insured person: None.

Self-employed person: For contributions for occupational

diseases only, see source of funds under Old Age, Disability,

and Survivors.

Employer: Variable premiums according to the assessed

degree of risk (work injury), plus 0.5% (occupational diseases)

taken from the contribution for Old Age, Disability, and

Survivors.

Government: None.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

70% of reference earnings during the first 12 months;

thereafter, 75%. The benefit is payable until recovery or until

determination of permanent total disability.

The reference earnings are based on the average daily wage.

Partial disability: 70% of lost earning capacity.

Permanent Disability Benefits

Permanent disability pension: For total incapacity for work

in the usual profession, the pension is between 50% and 70%

of reference earnings according to the insured’s residual

earning capacity. For total incapacity for all work, the pension

is 80% of reference earnings plus 10% for each dependent, up

to the limit of 100%.

The reference earnings are based on the annual wage (work

injury) or the average monthly wage (occupational disease).

Partial disability: 70% of the lost earning capacity if the

assessed degree of disability is more than 30%; if the

disability is less than 30%, an amount corresponding to 70%

of the lost earning capacity is paid as a lump sum.

Survivor Benefits

Survivor pension: 30% of covered earnings to the surviving

spouse; 40% if the surviving spouse is aged 65 or older or

disabled.

Orphan’s pension: 20% of covered earnings for one orphan,

40% for two orphans, or 50% for three or more orphans under

age 18 (age 22 or 25 if a student). Full orphans receive double

benefits, up to a total maximum of 80% of the insured’s salary.

Parent’s pension: 10% of covered earnings for each

surviving parent, up to a maximum of 30%.

Funeral grant: The cost of the funeral up to a maximum of

four times the monthly minimum wage; the grant is doubled if

transportation costs are necessary.

Death allowance: Twelve times the monthly minimum wage,

with 50% payable to the spouse and 50% to the children;

100% is paid if there is only one dependent survivor.

Administrative Organization

Ministry of Finance provides general supervision of the work

injury program through the Portuguese Insurance Institute.

Insurance companies manage work accident insurance

policies.

Portuguese Insurance Institute supervises insurance

companies.

Ministry of Labor and Solidarity provides general supervision

of the occupational diseases program through the Secretary

of State for Solidarity and Social Security.

National Occupational Disease Insurance Fund administers

the occupational disease program.

Unemployment

Regulatory Framework

First law: 1975.

Current law: 1999.

Type of program: Social insurance and social assistance

system.

Coverage

Employed persons.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability,

and Survivors, above.

Government: None.

Of the total 34.75% contributed by the insured person and

employer, 5.22% is allocated to unemployment benefits.
SSPTW: Europe, 2004 ♦ 183

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Qualifying Conditions

Unemployment benefit: 540 days of earnings in the

24 months before unemployment. Registration at an

employment office is required. The person must be capable of,

and available for, work. Unemployment must be involuntary.

Social assistance unemployment benefit (income-tested):

180 days of earnings in the 12 months before unemployment.

Registration at an employment office is required. The person

must be capable of, and available for, work. Unemployment

must be involuntary.

Partial unemployment benefit: For insured persons in parttime employment whose income is lower than the value of

unemployment benefit and who work more than 20% but less

than 75% of the normal workweek.

Unemployment Benefits

65% of average earnings during the 12 months preceding the

2 months before the month during which unemployment

began.

The minimum benefit is equal to the minimum wage.

The maximum benefit is equal to three times the minimum

wage.

The duration of entitlement is calculated according to the age

of the insured. For individuals up to age 30, 12 months;

between ages 31 and 40, 18 months; between ages 41 and 45,

24 months; older than age 45, 30 months plus 2 months for

each 5-year contribution period during the last 20 years.

Social assistance unemployment benefit: 80% of the

minimum wage if single; 100% if the claimant has

dependents.

The duration of entitlement is calculated according to the

insured’s age. For individuals up to age 30, 12 months;

between ages 31 and 40, 18 months; between ages 41 and 45,

24 months; older than age 45, 30 months plus 2 months for

each 5-year contribution period during the last 20 years.

Partial unemployment benefit: The benefit is equal to the

difference between 1.3 times the unemployment benefit and

the value of part-time work earnings. The duration of the

benefit corresponds to the period of unemployment benefit

that would otherwise have been awarded if fully unemployed.

For insured persons aged 55 or older, the unemployment

benefit is paid until age 60, when the unemployment benefit is

converted to the old-age pension. An unemployed person can

also claim an old-age pension at age 58 (under certain

conditions and in the framework of a temporary program) or at

age 55 (under certain conditions and with a benefit reduction).

Administrative Organization

Ministry of Labor and Solidarity provides general supervision

through the State Secretariat for Solidarity and Social

Security.

Solidarity and Social Security Institute administers the

program.

Employment centers review claimants’ eligibility.

Family Allowances

Regulatory Framework

First law: 1942.

Current laws: 1980, 1997, 1999, and 2001.

Type of program: Universal system.

Coverage

Nationals, foreign citizens, refugees, and noncitizens residing

in Portugal (or deemed as such).

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Self-insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: Makes a contribution.

Of the total 34.75% contribution by the insured person and

employer, 2.15% is allocated to family benefits.

Qualifying Conditions

Family allowances (income-tested): Child must be under

age 16 (age 18, 21, or 24 if a student or disabled; age 27 in

cases of illness or accident), residing in Portugal, and not

receiving income from employment. The benefit is granted

to a child living with a family or residing in a children’s home.

Funeral allowance: Awarded to the person who met the cost

of the funeral of a noncovered citizen residing in Portugal.

Family Allowance Benefits

Family allowances: The allowance is calculated according to

family income and the child’s age. The reference family income

is determined by dividing the total income of all working family

members by the number of eligible children plus one. The

allowance is paid for reference family income up to five times

the national minimum wage.

If the reference family income is lower than or equal to half the

national minimum wage, €120 per month is paid to each child

up to 12 months of age and €30 per month to each child older

than 12 months. Eligible children between ages 6 and 16

receive an additional payment each September toward

education fees.
184 ♦ SSPTW: Europe, 2004

Portugal

If the reference family income is more than half of the national

minimum wage but no more than the national minimum wage,

€100 per month is paid to each child up to 12 months of age

and €25 per month to each child older than 12 months.

If the reference family income is more than the national

minimum wage but no more than 150% of the national minimum

wage, €80 per month is paid to each child up to 12 months of

age and €23 per month to each child older than 12 months.

If the reference family income is more than 150% but no more

than 250% of the national minimum wage, €50 per month is paid

to each child up to 12 months of age and €20 per month to each

child older than 12 months.

If the reference family income is more than 250% but no more

than 500% of the national minimum wage, €30 per month is paid

to each child up to 12 months of age and €10 per month to each

child older than 12 months.

Disabled child special supplement: €49.41 a month if under

age 14; €72.55 if between ages 14 and 18; €97.12 if between

ages 18 and 24. Subject to dependency and the degree of

disability.

Constant-attendance supplement: €71.90 a month. Subject to

dependency and the degree of disability.

Disabled person monthly allowance: €143.80 a month for life

is paid to a disabled person older than age 24. Subject to

dependency and the degree of disability.

Extraordinary complementary allowance: In addition to the

disabled person monthly allowance, €14.46 if the person is

younger than age 70; €28.91 if aged 70 or older. Subject to

dependency and the degree of disability.

Special education allowance: A variable amount is payable

on behalf of the insured’s descendant if the descendant is

under age 24 and attending school in a special educational

establishment or receiving other special educational

assistance. Subject to dependency and the degree of

disability.

Funeral grant: €187.19.

Administrative Organization

Ministry of Labor and Solidarity provides general supervision

through the State Secretariat for Solidarity and Social

Security.

Solidarity and Social Security Institute administers the

program.
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Romania

Exchange rate: US$1.00 equals 32,492 lei.

Note: This information is from 2002.

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1912.

Current law: 2000.

Type of program: Social insurance system.

Coverage

Employed persons with individual labor contracts; public

officials; nominated officials within the executive, legislative,

and judicial authorities; craft cooperative members; persons

receiving unemployment benefits; and workers or farmers

earning at least the equivalent of three times the national

average wage.

Voluntary coverage for persons wishing additional coverage

for the noninsured part of their income (insured income is

limited to three times the national average wage) or for those

not covered by a mandatory scheme.

Special systems for lawyers and other professional categories,

including military personnel and the clergy.

Source of Funds

Insured person: All insured persons pay one-third of the

contribution rate applied to legally defined normal working

conditions (35%).

Employer: Employers pay the remainder of the applied

contribution rate after deducting the insured person’s

contribution. The applied contribution rate for employers

varies depending on working conditions: 35% for normal

conditions, 40% for arduous conditions, and 45% for very

arduous conditions.

The employer contributions also finance cash sickness,

maternity, and work injury benefits.

Government: Any deficit.

The maximum earnings for contribution and benefit purposes

are three times the national average wage.

Qualifying Conditions

Old-age pension: Age 65 (men) or age 60 (women) with at

least 15 years of contributions (or deemed contributions).

There are lower age requirements for persons employed in

arduous or dangerous work, persons who are handicapped or

visually impaired, and persons who were imprisoned because

of their political beliefs.

Early pension: Age 55, if the insured’s contribution record

exceeds the full career contribution record (35 years for men or

30 years for women) by at least 10 years.

Partial early pension: Age 55, if the insured’s contribution

record exceeds the full career contribution record by less than

10 years.

Disability pension: In addition to insured persons, school

pupils, apprentices, students, military conscripts, and the

victims of revolutionary events may receive a pension.

Persons suffering a loss of at least 50% of working capacity

due to accidents (including work accidents), diseases

(including occupational diseases), or revolutionary events may

also receive a pension. For school pupils, apprentices, and

students, only disabilities resulting from work are covered. For

the victims of revolutionary events, coverage is provided only

to those with a previous contribution record. Prior

contribution conditions vary according to age at the onset of

disability. No prior contribution conditions apply if the

disability is caused by a work accident, an occupational

disease, or tuberculosis.

Survivor pension: The insured met pension requirements or

was a pensioner at the time of death.

Eligible survivors: Widows who fulfill certain conditions

relating to age and the duration of marriage or disability;

children aged 16 or under (up to age 26 if a student, depending

on the duration of studies). No prior condition is required if

the insured’s death was caused by a work accident,

occupational disease, or tuberculosis. A limited benefit

entitlement is payable for 6 months to a low-income uninsured

spouse raising a child under age 7 who does not meet the

eligibility conditions for age and the duration of marriage.

Old-Age Benefits

Old-age pension: The benefit is calculated as the lifetime

accumulated number of points multiplied by the point value in

force at the date of retirement (fixed by the annual budget law).

The number of points obtained during 1 year is equal to the

average insured monthly salary divided by the monthly

national average wage. The obtained lifetime number of points

cannot exceed the total number of points corresponding to a

full career equal to 35 years (men) or 30 years (women).

Early pension: An early pension is possible.

Partial early pension: Deemed contribution periods are not

considered, and the pension is proportionately reduced.

Benefit adjustment: Benefits are adjusted according to

inflation.
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Permanent Disability Benefits

Disability pension: 40% to 75% of the projected entitlement

to an old-age pension (calculated as the lifetime accumulated

number of points multiplied by the point value in force at the

date of retirement; see old-age pension, above), according to

three degrees of disability.

Constant-attendance supplement: A lump sum for a firstdegree disability.

Benefit adjustment: Benefits are adjusted according to

inflation.

Survivor Benefits

Survivor pension: One survivor receives 50% of the old-age

pension paid or payable to the insured or, if the deceased was

ineligible for the old-age pension, 50% of the first-degree

disability pension; two survivors, 75% of the insured’s

pension; three or more survivors, 100% of the insured’s

pension; full orphans receive the sum of the survivor pension

for each insured parent.

Benefit adjustment: Benefits are adjusted according to

inflation.

Funeral grant: Awarded on the death of the insured or the

insured’s dependent. For the death of a dependent, the grant

is reduced by 50%.

Administrative Organization

Ministry of Labor and Social Solidarity is responsible for

general supervision and for policy development.

National Pension and Social Insurance Fund with regional

pension funds administers the program.

Sickness and Maternity

Regulatory Framework

First law: 1912.

Current law: 2000.

Type of program: Social insurance system.

Coverage

Cash benefits: Employed persons with individual labor

contracts; public officials; nominated officials within the

executive, legislative, and judicial authorities; craft cooperative

members; persons receiving unemployment benefits; and,

under certain conditions, workers or farmers earning at least

the equivalent of three times the national average wage.

Voluntary coverage for persons wishing additional coverage

for the noninsured part of their income (the insured income is

up to the limit of three times the national average wage) or for

those not covered by a mandatory scheme.

Special systems for lawyers and other professional categories,

including military personnel and the clergy.

Medical benefits: All residents, including permanent foreign

nationals.

Voluntary coverage for temporary residents and for diplomatic

staff.

Source of Funds

Insured person

Cash benefits: None.

Medical benefits: 7% of income.

Employer

Cash benefits: A portion of the adjusted 35%, 40%, or 45%

payroll contribution paid under Old Age, Disability, and

Survivors, above. Under certain conditions, the employer pays

the sickness benefit directly to the employee when the period

of absence from work due to sickness is less than 90 days.

Medical benefits: 7% of payroll.

Government: Subsidies for medical benefits.

Qualifying Conditions

Cash benefits: Six months of contributions during the

12 months preceding the onset of sickness or 12 months of

contributions during the last 24 months for insured persons

working under fixed-term work contracts or whose declared

income is at least equal to the ceiling for insurable income; no

prior conditions in cases of emergency surgery, tuberculosis,

certain contagious diseases, an occupational disease, or being

injured at work.

Medical benefits: There is no minimum qualifying period.

Sickness and Maternity Benefits

Sickness cash benefit: 75% of the mean salary during the

6 months preceding the onset of sickness (100% for some lowincome groups) is payable for up to a maximum of 180 days a

year (may be extended in some cases). If the medical condition

continues beyond 180 days, the award can be converted to a

disability benefit.

Benefit adjustment: Benefits are adjusted according to

inflation after 90 days of entitlement.

Illness prevention and rehabilitation for work benefit: The

benefit includes temporary rehabilitation through a placement

in an alternative place of work and a cash benefit to replace

part of lost earnings resulting from a reduction in working

hours. The value of each benefit component must not exceed

25% of the basis salary (mean salary during the 6 months

preceding the onset of sickness). Benefits are payable for a

maximum period of 90 days a year. A benefit equivalent to 75%

of the basis salary is awarded to persons in quarantine.

Maternity cash benefit: 85% of the basis salary (mean salary

during the 6 months preceding entitlement). The benefit is
SSPTW: Europe, 2004 ♦ 187

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payable for 126 days covering the period before and after

childbirth.

Parental leave: 85% of the basis salary (mean salary during

the 6 months preceding the claim) is payable until the child is

age 2 (age 3 if the child is disabled).

Sick-child care allowance: 85% of the basis salary (mean

salary during the 6 months preceding the claim). The benefit is

payable for a maximum of 14 days a year (may be extended for

certain difficult cases) for a child under age 8 (age 18 if

disabled).

Workers’ Medical Benefits

Medical services are provided directly to patients by local

health insurance funds. Medical benefits include general and

specialist care, hospitalization, medicines, appliances,

maternity care, transport, and other services.

Dependents’ Medical Benefits

Medical services are provided directly to patients by local

health insurance funds. Medical benefits include general and

specialist care, hospitalization, medicines, appliances,

maternity care, transport, and other services.

Administrative Organization

Cash benefits: Ministry of Labor and Social Solidarity is

responsible for general supervision and policy development.

National Pension and Social Insurance Fund with regional

pension funds administers the program.

Medical benefits: National Health Insurance Fund provides

general supervision.

Local health insurance funds administer the program.

Work Injury

Regulatory Framework

First law: 1912.

Current law: 2000.

Type of program: Social insurance system.

Coverage

Employed persons, school pupils, apprentices, students

undergoing occupational training, and military conscripts.

Source of Funds

Insured person: None.

Employer: A portion of the adjusted 35%, 40%, or 45% payroll

contribution paid under Old Age, Disability, and Survivors,

above. Under certain conditions, the employer pays sickness

benefit directly to the employee when the period of absence

from work due to sickness is less than 90 days. Employers also

contribute to medical benefit costs (see Sickness and

Maternity, above).

Government: Any deficit.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period

or minimum contribution conditions. The insured must have at

least a 50% loss of working capacity due to a work injury or an

occupational disease.

Temporary Disability Benefits

100% of the basis salary (75% of the mean salary during the

6 months preceding the onset of disability) is payable from the

first day of disability. The benefit is payable by the employer

until recovery or the certification of permanent disability.

Permanent Disability Benefits

Permanent disability pension: 40% to 75% of the projected

entitlement to an old-age pension (calculated as the lifetime

accumulated number of points multiplied by the point value in

force at the date of retirement; see old-age pension, above),

according to three degrees of disability.

Constant-attendance supplement: A lump sum for a firstdegree disability.

Benefit adjustment: Benefits are adjusted according to

inflation.

Workers’ Medical Benefits

Medical services are provided directly to patients by local

health insurance funds. Medical benefits include general and

specialist care, hospitalization, medicines, appliances,

maternity care, transport, and other services.

Survivor Benefits

Survivor pension: One survivor receives 50% of the old-age

pension paid or payable to the insured or, if the deceased was

ineligible for the old-age pension, 50% of the first-degree

disability pension; two survivors, 75% of insured’s pension;

three or more survivors, 100% of insured’s pension; full

orphans are entitled to a pension for each insured parent.

Benefit adjustment: Benefits are adjusted according to

inflation.

Funeral grant: Awarded on the death of the insured or the

insured’s dependent. For the death of a dependent, the grant

is reduced by 50%.

Administrative Organization

Ministry of Labor and Social Protection provides general

supervision.
188 ♦ SSPTW: Europe, 2004

Romania

County Directorates of Labor and Social Protection administer

the program.

Temporary disability benefits are paid directly by enterprises.

Unemployment

Regulatory Framework

First law: 1991.

Current laws: 1991 and 1997.

Type of program: Social insurance system.

Coverage

Unemployment benefit: Persons whose individual labor

contracts have expired or who have lost membership in a craft

cooperative; job seekers over age 18; newly discharged

military personnel; or persons newly graduated from school or

university who cannot find suitable employment.

Professional insertion allowance: Young adults, aged 18 or

older, who have no independent income and have not found

employment in the 60 days following the completion of their

studies (30 days following the completion of military service).

Youths aged 16 to 17 without financial support who have

finished full-time education. Disabled persons without

employment and receiving specialized training.

Source of Funds

Insured person: 1% of gross earnings; the self-employed

contribute 5% of declared income.

Employer: 5% of payroll.

Government: Any deficit.

Qualifying Conditions

Unemployment benefit: Six months of contributions in the

last 12 months (12 months of contributions in the last

24 months for certain categories). Registered at the local labor

office.

Unemployment Benefits

Unemployment benefit: 50% of average earnings over the

last 3 months with up to 5 years of contributions; 55% with

more than 5 years of contributions. The benefit is payable for

up to 270 days.

The minimum benefit is 23% of the national minimum wage if

the insured has less than 5 years of contributions; 25% if more

than 5 years of contributions.

Maintenance allowance: Unemployment benefit is paid for

270 days; thereafter, an unemployment maintenance allowance

is paid for up to 18 months at 60% of the minimum wage.

Professional insertion allowance: An allowance of 18% of

the national minimum wage is paid to first-time job seekers after

leaving secondary school (20% for university graduates).

Administrative Organization

National Office of Employment and Vocational Training

provides general supervision.

Local offices administer the program.

Family Allowances

Regulatory Framework

First law: 1944.

Current laws: 1993, 1995, 1997, and 1998.

Type of program: Universal system.

Coverage

All resident children.

Source of Funds

Insured person: None.

Employer: None.

Government: Total cost.

Qualifying Conditions

Family allowances: The child must be under age 16 (age 18 if

disabled or in full-time education or professional training).

Supplementary allowance for families with more than one child:

Paid as a family allowance supplement to households with

more than one child.

Social allowance: Paid to single-person or low-income

households.

Birth grant: Paid to women after the birth of second and

subsequent children.

Child foster allowance: Paid to a family or an institution

responsible for the upbringing of a minor placed in their

charge.

Military conscript supplementary allowance: Paid for the

spouse of low-income military conscripts in cases in which the

spouse is disabled or has entered the fourth month of

pregnancy.

Family Allowance Benefits

Family allowances: 130,000 lei a month for each child.

Supplementary allowance for families with more than one child:

50,000 lei a month for families with two children; 100,000 lei a

month for three children; 125,000 lei a month for four or more

children.
SSPTW: Europe, 2004 ♦ 189

Romania

Social allowance: Paid at between 166,500 lei and 625,300 lei a

month according to family size. Families with more than five

persons receive a supplement of 92,700 lei for each additional

member.

Birth grant: 387,317 lei.

Child foster allowance: 347,906 lei a month.

Military conscript supplementary allowance: 48,836 lei a

month.

Administrative Organization

Ministry of Labor and Social Protection provides general

supervision.

Local offices of labor and social protection, local councils, and

other institutions administer the benefits.
190 ♦ SSPTW: Europe, 2004

Russia

Russia

Exchange rate: US$1.00 equals 29.23 rubles.

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1922.

Current laws: 1995, 1996, and 2001 (state pension security,

labor pensions, and mandatory pension insurance).

Type of program: Social insurance and notional and

individual accounts system.

Coverage

Employed citizens, self-employed persons, and independent

farmers. (The individual account covers those born in 1967 or

later.)

Special schemes for civil servants, military personnel, police

officers, war veterans, and other specified groups.

Source of Funds

Insured person: None.

Self-employed person: The self-employed and independent

farmers contribute a fixed monthly amount of 150 rubles.

Employer: 28% of payroll, which is part of the Single Social

Tax (SST); half of the employer contribution finances the

basic part of the labor pension and the other half finances the

notional and individual accounts. Agricultural enterprises pay

20.6% of payroll. Organizations for the disabled and for

pensioners are exempted from the SST but pay contributions

for mandatory pension insurance.

The overall 35.6% of payroll SST finances pensions provided

under the State Pension Security law as well as the basic part

of the labor pension, sickness and maternity benefits, and

medical care benefits. The employer’s contribution noted

above is included in this rate. The contribution rate is

lowered on annual income exceeding 100,000 rubles.

Employers can provide supplementary benefits out of their

own budgets.

Government: Total cost of social pensions and of service

pensions for state employees, military personnel, police

officers, and other specified groups. Republics and local

authorities can provide supplementary benefits out of their

own budgets.

Qualifying Conditions

Old-age pension

Old-age labor pension: Age 60 (men) or age 55 (women) with

a minimum 5 years of insurance coverage.

Full qualifying conditions are reduced for persons who have

worked in the far-north region or in hazardous or dangerous

work, to mothers who have five or more children or disabled

children, and to some specified professional categories.

Age 50 with 20 years of work (men) or age 45 with 15 years of

work (women), including 10 years (men) or 7.5 years (women)

working in an unhealthy working environment, underground,

or in hot workshops.

Age 55 with 25 years of work (men) or age 50 with 20 years of

work (women), including 12.5 years (men) or 10 years (women)

in an unhealthy working environment, in geological work, in

the railway service, as drivers in mines, dock workers, sailors,

or as aircraft ground crew.

There is no lower age limit for teachers who have worked with

children for 25 years and for medical workers employed in

health care institutions in cities for 30 years; villages for

25 years.

State length-of-service pension: A supplement to the old-age

labor pension to state employees, military personnel, and

police officers with 15 years of service.

State social pension: Disabled citizens or those meeting the

age requirement of age 65 (men) or age 60 (women).

A working pensioner may receive both the salary and pensions

in full.

Disability pension

Disability labor pension: Previously employed. The value of

the pension depends on the assessed degree of disability,

according to three groups: Group I, 100% incapable of work

and requiring constant attendance; Group II, 100% incapable

of work but not in need of constant attendance; Group III, 50%

incapable of work but not in need of constant attendance.

State disability pension: There is no minimum period-ofservice requirement for persons under age 20 who became

disabled due to a general illness or for a disability resulting

from a severe work injury, occupational disease, or military

service.

Survivor pension

Survivor labor pension: The insured’s length of service and

insurance coverage are not considered.

Eligible survivors are widows over age 55 (widowers over

age 60) or unemployed and caring for children younger than

age 14 or disabled; children up to age 18 (age 23 if a student,

no limit if disabled before age 18); brothers and sisters up to

age 18; and grandfathers aged 61 or older and grandmothers

aged 56 or older.

Social survivor pension: The pension is provided if the insured

did not have insurance coverage.
SSPTW: Europe, 2004 ♦ 191

Russia

Old-Age Benefits

Old-age pension

Old-age labor pension: The benefit is calculated as the sum of

three components:

• a basic flat rate according to different categories of

beneficiaries;

• a benefit based on the notional account; and

• a benefit based on the value of the individual account

(contributions plus interest) to be paid beginning in

2013.

There is no officially stated minimum or maximum monthly

pension, but the total amount of all three components should

not be less than 660 rubles.

State length-of-service pension: The benefit is calculated

according to the length of state service and the value of wages

earned.

State social pension: The amount of the social pension is a

percentage of the basic part of the labor pension.

Retirement is not necessary.

Benefit adjustment: Benefits are adjusted according to the

rate of inflation and increases in the average wage.

Permanent Disability Benefits

Disability pension

Disability labor pension: The benefit is awarded according to

three assessed groups of disability. The benefit is calculated

as the sum of three components:

• a basic flat rate according to different categories of

beneficiaries (and increased according to the number of

dependents);

• a benefit based on the notional account; and

• a benefit based on the value of the individual account

(contributions plus interest) to be paid beginning in 2013.

State disability pension: Benefits are set by the government

according to categories of beneficiaries (and increased

according to the number of dependents).

Benefit adjustment: Benefits are adjusted according to the

rate of inflation and increases in the average wage.

Survivor Benefits

Survivor pension

Survivor labor pension: The benefit is calculated as the sum of

two components:

• a basic flat rate according to different categories of

survivor; and

• a benefit based on the notional account and on the

number of eligible survivors. The pension is divided

equally between all eligible survivors. The pension does

not cease on the remarriage of a widow.

Social survivor pension: The pension is set by the

government according to different categories of beneficiaries.

The pension is divided equally among all eligible survivors.

Benefit adjustment: Benefits are adjusted according to the rate

of inflation and increases in the average wage.

Administrative Organization

Pension Fund of the Russian Federation and its regional

bodies administer benefit awards and payments.

Ministry of Labor and Social Development of the Russian

Federation is responsible for policy development.

Sickness and Maternity

Regulatory Framework

First law: 1912.

Current laws: 1984, 1993, 1995, 1999 (mandatory social

insurance), 2001; and 1991, 1992, and 1993 (medical care).

Type of program: Social insurance (cash benefits) and

universal (medical care) system.

Coverage

Cash benefits: Employed citizens.

Medical benefits: All citizens and refugees.

Source of Funds

Insured person

Cash benefits: None.

Medical insurance: None. (The insured may contribute to

voluntary supplementary medical insurance. The contribution

rates for voluntary supplementary medical insurance vary by

plan.)

Employer

Cash benefits: 4% of payroll, included in the overall SST.

See source of funds under Old Age, Disability, and Survivors,

above.

Medical insurance: 3.6% of payroll, included in the overall

SST. See source of funds under Old Age, Disability, and

Survivors, above. (Rates for voluntary supplementary medical

insurance vary by plan.)

Government: Federal government and local governments

provide partial funding for medical care.

Qualifying Conditions

Cash and medical benefits: There is no minimum qualifying

period. For the childbirth grant, the claimant must register with

a medical establishment at the beginning of pregnancy.
192 ♦ SSPTW: Europe, 2004

Russia

Sickness and Maternity Benefits

Sickness benefit: 60% of current earnings with less than

5 years of coverage; 80% with 5 years to 8 years of coverage;

100% with over 8 years of coverage (or if the insured has

three or more dependent children).

The minimum benefit is 100% of the minimum wage

(600 rubles in 2003).

The maximum benefit is 85 times the minimum wage.

Note: The value of the minimum wage used for the

calculation of cash benefits varies according to the benefit

type.

Parental care leave: To provide care for a sick child under

age 7, benefit is provided for the total period of sickness; for

a child under age 15, benefit is provided for 15 calendar days;

for a family member over age 15, benefit is provided for

7 calendar days.

Funeral grant: A lump sum of between 1,000 rubles and

2,000 rubles, depending on local financial resources.

Maternity benefit: 100% of the insured’s gross earnings in

the last month is payable for 70 days before the expected date

of childbirth and 70 days after childbirth; may be increased by

an additional 14 or 40 days in certain cases. (After maternity

benefit ceases, a monthly child care leave allowance of

500 rubles; 70 rubles for unemployed workers, is paid until

the child is age 18 months under the Family Allowances

program.)

The maximum benefit is 11,700 rubles.

Childbirth grant: A lump sum of 4,500 rubles, and an extra sum

paid by the local authorities.

Pregnancy registration supplement: 300 rubles, paid when

the pregnancy is registered with the local authorities.

Adoption grant: A lump sum of 4,500 rubles, and an extra sum

paid by the local authorities.

Workers’ Medical Benefits

Compulsory medical insurance covers medical services

provided directly to patients by public and private health

providers. Services provided include general, preventive, and

emergency care; hospitalization; laboratory services; dental

care; maternity care; vaccination; and transportation.

Cost sharing: Medicines prescribed during hospitalization

are provided free, or at reduced rates, to persons with certain

categories of illness, to the disabled, and to war veterans.

Voluntary medical insurance covers specialized care,

expensive medicines, and appliances.

Dependents’ Medical Benefits

Compulsory medical insurance covers medical services

provided directly to patients by public and private health

providers. Services provided include general, preventive, and

emergency care; hospitalization; laboratory services; dental

care; maternity care; vaccination; and transportation.

Cost sharing: Medicines prescribed during hospitalization are

provided free, or at reduced rates, to persons with certain

categories of illness, to the disabled, and to war veterans.

Voluntary medical insurance covers specialized care, expensive

medicines, and appliances.

Administrative Organization

Cash benefits: Social Insurance Fund of the Russian

Federation and regional social insurance funds administer

sickness and maternity cash benefits.

Enterprises and employers administer and pay benefits to

their own employees.

Regional departments of social protection administer

maternity benefits for the unemployed and other nonworking

citizens.

Medical benefits: Ministry of Health of the Russian

Federation and regional health departments implement state

health care policy and develop health care programs.

Medical services are provided through clinics, hospitals,

maternity homes, and other medical facilities, including

private health care providers.

The implementation of medical insurance is the responsibility

of regional governments.

Work Injury

Regulatory Framework

First law: 1903.

Current laws: 1998, implemented in January 2000 (work injury

and occupational disease); 1999 (mandatory social insurance);

2001 (labor code); and 2002 (insurance tariffs).

Type of program: Social insurance system.

Coverage

Employed citizens, employed convicted persons, persons

employed on the basis of a civil or legal agreement if under

such an agreement the employer is obliged to pay

contributions to the Social Insurance Fund of the Russian

Federation for mandatory social insurance against work injury

and occupational disease.

Medical care is available to all citizens.

Source of Funds

Insured person: None.

Employer: Varying contributions (between 0.2% and 8.5% of

payroll) according to 22 classes of professional risk related

to 22 categories of industry. Employers can provide

supplementary benefits out of their own budgets.

Government: None. Republics and local authorities can

provide supplementary benefits out of their own budgets.
SSPTW: Europe, 2004 ♦ 193

Russia

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

The Medical and Social Assessment Office assesses the

degree of disability annually; more frequently in certain cases.

Temporary Disability Benefits

100% of average gross earnings before the certification of the

degree of disability. The benefit is payable from the first day of

incapacity until the insured is fully rehabilitated.

Lump-sum compensation: A lump sum of up to 27,000 rubles,

calculated in proportion to the percentage of lost work

capacity, is also paid to insured workers.

In the case of a sustained loss in work capacity, a monthly

benefit equal to the average wage for the last 12-month

period, calculated in proportion to the percentage of lost

work capacity.

Permanent Disability Benefits

Permanent disability pension: The pension is calculated

according to three degrees of disability. Groups I and II

receive 75% of average gross earnings, and Group III receives

30% of average gross earnings.

The minimum level of disability is from 10% to 15%.

The maximum benefit is set annually by the Social Insurance

Fund (27,000 rubles per month in 2003).

Constant-attendance allowance: Twice the minimum wage per

month is provided for those needing outpatient special medical

care; 50% of the minimum wage for everyday attendance. (The

minimum wage is 600 rubles in October 2003.)

Workers’ Medical Benefits

Compulsory medical insurance covers medical services

provided directly to patients by public and private health

providers. Services provided include general, preventive, and

emergency care; hospitalization; laboratory services; dental

care; transportation; free appliances and medicines; and the

cost of professional rehabilitation. Specialized care is

possible under the terms of voluntary supplementary

insurance coverage offered by the employer.

Survivor Benefits

Survivor pension: Payable on the death of the insured as the

result of a work injury or an occupational disease. The

benefit is calculated as the sum of two components:

• a basic flat rate according to different categories of

survivor; and

• a benefit based on the notional account and on the

number of eligible survivors.

Lump-sum compensation: In addition to the pension, a lump

sum of 27,000 rubles (in 2003) is divided equally among all

entitled survivors.

Death grant: A lump sum of up to 1,000 rubles. (The employer

may pay an extra benefit.)

Administrative Organization

Temporary disability benefits are administered by the Social

Insurance Fund of the Russian Federation and regional funds.

Enterprises and employers pay benefits to employees.

Pension Fund of the Russian Federation is responsible for the

administration of permanent disability pensions.

Ministry of Health of the Russian Federation is responsible

for the provision of medical services through clinics,

hospitals, maternity homes, and other medical facilities,

including private health care providers.

State health care policies and programs are implemented and

administered by the Ministry of Health of the Russian

Federation and regional health departments.

Unemployment

Regulatory Framework

First law: 1921.

Current laws: 1991 (employment in the Russian

Federation), with 2003 amendment; 1993; 1996; 1997; and 2001

(labor code).

Type of program: Social insurance system.

Coverage

Citizens between ages 16 and 59 (men) or ages 16 and 54

(women).

Source of Funds

Insured person: None.

Employer: None.

Government: Financed from federal and local budgets.

Republic and local governments may provide supplementary

benefits for unemployed persons and their dependents out of

their own budgets.

Qualifying Conditions

Unemployment benefit: Registered at the employment

office, has 26 weeks of full-time employment in the last

12 months (or the 26-week equivalent for part-time

employment), and is able and willing to work. Benefits may be

reduced, postponed, suspended, or terminated if the worker is

discharged for violating work discipline, leaving employment

without good cause, violating conditions for job placement or

vocational training, or filing fraudulent claims.
194 ♦ SSPTW: Europe, 2004

Russia

Unemployment Benefits

A severance payment equal to twice the insured’s average

monthly wage is paid by the employer.

Unemployment benefits as a percentage of previous average

wages are paid by the local state employment service for

12 months. The benefits decrease over time: 75% of the

previous average monthly wage in the first 3 months; 60% for

the next 4 months; and 45% for the last 5 months.

The minimum monthly benefit must not be less than 30% of

the local minimum subsistence level.

For a second period of 12 months, the monthly benefit is 30%

of the local minimum subsistence level.

For unemployed persons who do not meet the prior work

conditions or for persons who have never worked, the benefit

is 30% of the regional minimum subsistence level for the

first 6 months and 20% of the regional minimum subsistence

level for the next 6 months.

Dependent supplement: The benefit is increased by 10% of

the regional minimum subsistence level, up to a maximum of

30%. If both parents are unemployed, they are both entitled

to claim a supplement for the same dependent.

Supplement for victims of radiation: 10% of the regional

minimum subsistence level but not less 50 rubles.

Supplement for persons living in radiation-contaminated zones:

10% of the regional minimum subsistence level but not less

than 100 rubles.

Early pension: Payable to unemployed older workers between

ages 58 and 59 (men) or ages 53 and 54 (women). (The benefit

is the same as the old-age labor pension.)

Administrative Organization

Ministry of Labor and Social Development of the Russian

Federation provides general supervision, control, and partial

financing.

Regional employment services administer and finance the

program.

Family Allowances

Regulatory Framework

First law: 1944.

Current law: 1995 (state benefits for citizens with children),

with 1999, 2000, and 2002 amendments; 1995 (regulations

for state benefits for citizens with children); and 2003

(budget of the social insurance fund).

Type of program: Social insurance and social assistance

system.

Coverage

Children under age 16 (or until the completion of general

education up to age 18).

Source of Funds

Insured person: None.

Employer: Contributions are included in SST contribution.

See source of funds under Old Age, Disability, and Survivors,

above. (Employers can provide supplementary benefits out of

their own budgets.)

Government: Federal and local budgets pay for remainder of

benefits. Republics and local authorities can provide

supplementary benefits out of their own budgets.

Qualifying Conditions

Child allowances: Granted to families with income below

the locally determined minimum subsistence level. The child

must be resident.

Child care leave allowance: Employees, students in

vocational courses, and military personnel.

Family Allowance Benefits

Child allowances: 70 rubles for each child from 18 months

to age 16 (or until the completion of general education);

105 rubles if a parent is evading alimony payments. Single

parents receive twice the child allowance.

Child care leave allowance: 500 rubles is paid a month

(70 rubles for unemployed workers) until the child is age 18

months; until age 7 if the child is ill (outpatient treatment);

age 15 (inpatient treatment). If providing care for a sick child,

60% to 100% of wages for the first 7 days of illness; thereafter,

30% of wages (50% for single mothers) until recovery.

Administrative Organization

Ministry of Labor and Social Development of the Russian

Federation provides general oversight of the program.

Regional and local departments of social protection award

benefits and make payments to nonworking parents.
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San Marino

San Marino

Exchange rate: US$1.00 equals 0.80 euros (€).

Old Age, Disability, and Survivors

Regulatory Framework

First and current laws: 1965 (old age), with 2001 amendment;

1965 (disability); and 1965 (survivors).

Type of program: Social insurance system.

Coverage

Employed and self-employed persons.

Source of Funds

Insured person: 1.9% of earnings.

Self-employed person: Contribution rates vary between 10%

and 19.5% of earnings, according to the category of selfemployment.

Employer: 10% of payroll.

Government: Contributes an amount equal to 10% of total

contributions; may rise to 25% to cover any deficit. Higher

contributions are made on behalf of agricultural workers.

All of the above contributions also finance work injury

benefits.

Qualifying Conditions

Old-age pension: Age 60 for men and women (age 65 for

agricultural and industrial workers) with at least 15 years of

contributions. (For new entrants to the labor force from

January 1, 2002, the pensionable age will be age 65 for men and

women.)

Deferred pension: A deferred pension is possible.

Disability pension: A loss of working capacity of at least 65%

and 7 years of contributions.

Survivor pension: Fifteen years of contributions or 7 years of

contributions with at least 1 year in the 5 years preceding the

insured’s death. The pension is payable to a widow or an

unemployed widower. The pension ceases on remarriage.

Old-Age Benefits

Old-age pension: 3% of average earnings during the last

5 years for each of the first 15 years of coverage, plus 2% of

the average earnings during the last 5 years for each year of

coverage beyond 15.

Deferred pension: An increase of 3% for each year of

employment after age 60.

Benefit adjustment: Pensions are adjusted according to

changes in the cost of living.

Permanent Disability Benefits

Disability pension: The pension amount is not affected by

the assessed degree of disability.

The maximum pension is 86% of the average salary of the last

5 years of work.

Benefit adjustment: Pensions are adjusted according to

changes in the cost of living.

Survivor Benefits

Survivor pension: The percentage of the insured’s pension

payable varies depending on the number of eligible survivors.

For a spouse with one child, 70%; with two children, 75%; with

three children, 90%; with more than three children, 100%.

Administrative Organization

National Social Security Institute administers the program.

Sickness and Maternity

Regulatory Framework

First law: 1955.

Current laws: 1955 (medical benefits), 1965 (welfare), 1967

(cash benefits), and 1968 (self-employed).

Type of program: Social insurance (cash benefits) and

universal (medical benefits) system.

Coverage

Cash benefits: Employed and self-employed persons.

Medical benefits: All residents.

Source of Funds

Insured person: 3.5% of earnings.

Employer: 5% of payroll.

Government: None (cash benefits); 50% of direct taxes

collected by the state (medical benefits).

Qualifying Conditions

Cash sickness benefits: There is no qualifying period.

Cash maternity benefits: There is no qualifying period.

Medical benefits: There is no qualifying period.

Sickness and Maternity Benefits

Sickness benefit: 86% of monthly earnings for the first

15 days, 100% until the end of the sixth month, and 86% until

the end of the twelfth month. The benefit is payable for
196 ♦ SSPTW: Europe, 2004

San Marino

365 days for workers with permanent employment contracts; to

the end of employment contract for workers with short-term

employment contracts.

Maternity benefit: 100% of earnings during the 5 months of

maternity leave (2 months before and 3 months after the

expected date of childbirth); thereafter, during the following

13 months, mothers can remain on leave and receive a benefit

equal to 30% of earnings for 7 months and 20% of earnings for

6 months or they can return to work and take up to 2 hours a

day of leave on full pay.

Workers’ Medical Benefits

Services are provided by doctors of the National Social

Security Institute and state hospitals. Benefits include all

medical services, hospitalization, maternity care, and

pharmaceuticals.

Dental care is provided free for tooth extractions and for the

first course of treatment. There is a fee for subsequent

treatment (dental services are free for children up to age 14 and

for pensioners).

There is no cost sharing.

There is no limit to duration.

Dependents’ Medical Benefits

Same as for the insured.

Administrative Organization

National Social Security Institute administers the program.

Work Injury

Regulatory Framework

First and current law: 1965.

Type of program: Social insurance system.

Coverage

Employed and self-employed persons.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Self-employed person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: See source of funds under Old Age, Disability,

and Survivors, above.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

100% of earnings.

Permanent Disability Benefits

The monthly benefit is calculated according to the assessed

degree of disability and the value of the old-age pension that

would be paid with 30 years of contributions.

The minimum assessed degree of disability for entitlement is

15%.

Workers’ Medical Benefits

All necessary services are provided free of charge.

Survivor Benefits

Survivor pension: The percentage of the insured’s pension

payable varies depending on the number of eligible survivors.

For a spouse with one child, 70%; with two children, 75%; with

three children, 90%; with more than three children, 100%.

Administrative Organization

National Social Security Institute administers the program.

State hospitals, or government-approved establishments,

deliver medical services.

Unemployment

Regulatory Framework

First and current laws: 1967 (unemployment), 1977

(temporary unemployment), and 1980 (special economic

benefit).

Type of program: Social insurance system.

Coverage

Unemployment: Salaried employees.

Exclusions: Civil servants.

Temporary unemployment: Industrial and business

employees and tradesmen.

Source of Funds

Unemployment

Insured person: 0.5% of earnings.

Employer: 1.5% of payroll.

Government: None.
SSPTW: Europe, 2004 ♦ 197

San Marino

Temporary unemployment

Insured person: None.

Employer: 2% or 4% of payroll.

Government: None.

Qualifying Conditions

Unemployment benefit: Payable to unemployed insured

employees.

Special economic benefit: Payable in cases of mass

unemployment or the closure of the place of employment.

Temporary unemployment benefit: Payable for temporary

unemployment resulting from unforeseen circumstances,

restructuring, or a short-term market downturn.

Unemployment Benefits

Unemployment benefit: 50% of the average wage in the

3 months before unemployment is payable for up to 100 days a

year for permanent contract workers; 25% for up to 50 days for

temporary contract workers.

Special economic benefit: 75% of earnings for the first

6 months and 65% of earnings for a maximum of a further

6 months.

Temporary unemployment benefit: 86% of earnings payable

for a maximum of 9 months.

Administrative Organization

National Social Security Institute administers the

unemployment and temporary unemployment programs.

Family Allowances

Regulatory Framework

There is no information available on the family benefits

program in San Marino.
198 ♦ SSPTW: Europe, 2004

Serbia

Serbia

Exchange rate: US$1.00 equals 54.64 dinars.

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1922, implemented in 1937.

Current law: 2003.

Type of program: Social insurance system.

Coverage

Employees in industry, commerce, and agriculture; publicsector employees; and members of handicraft and fishery

cooperatives.

Special systems for various categories of self-employed

workers including craftsmen, artists, and farmers.

Source of Funds

Insured person: 16% of earnings.

Employer: 16% of payroll.

Government: Guarantees cash benefits.

The minimum earnings for contribution purposes range from

37% of the national average wage for employees with the

lowest level of education to 155% of the national average

wage for employees with the highest level of education.

The maximum earnings for contribution purposes are five

times the national average wage.

Qualifying Conditions

Old-age pension: Men, age 63 with 20 years of insurance;

age 65 with 15 years of insurance; or age 53 with 40 years of

insurance. Women, age 58 with 20 years of insurance; age 60

with 15 years of insurance; or age 53 with 35 years of

insurance.

Retirement from insured employment is necessary.

The pension is payable abroad if there is a reciprocal

agreement.

Disability pension: Incapacity for all work (total disability).

The insured must not be of retirement age and have at least

5 years of insurance.

If younger than age 30, the insured must have at least 1 year

of service if the onset of disability was before age 20; at least

2 years of service if the onset of disability was before age 25;

at least 3 years of service if the onset of disability was before

age 30.

Survivor pension: The deceased was a pensioner or had

5 years of insurance coverage or was eligible for a disability

pension.

Old-Age Benefits

Old-age pension: The value of personal points (a personal

coefficient multiplied by the number of years of service)

multiplied by the value of the general point.

The personal coefficient is equal to the sum of annual

personal coefficients divided by the period for which they are

calculated. The annual personal coefficient is the ratio

between an individual wage and the average wage in the

Republic for the same calendar year.

The value of the general point is 242.07 dinars (2003).

The maximum pension is 85% of average earnings.

Benefit adjustment: Benefits are adjusted every quarter. The

adjustment is based equally on the increase in the cost of

living and on the increase in average net wages.

Permanent Disability Benefits

Disability pension: The value of personal points (a personal

coefficient multiplied by the number of years of service)

multiplied by the value of the general point.

The personal coefficient is equal to the sum of annual

personal coefficients divided by the period for which they are

calculated. The annual personal coefficient is the ratio

between an individual wage and the average wage in the

Republic for the same calendar year.

The value of the general point is 242.07 dinars (2003).

Projected years of service are calculated as 2/3 of the period

between the onset of disability and age 53 and 1/2 of the

period between age 53 and age 58 (women) or age 63 (men).

Constant-attendance allowance: An allowance is provided

where necessary.

Benefit adjustment: Benefits are adjusted every quarter. The

adjustment is based equally on the increase in the cost of

living and on the increase in average net wages.

Survivor Benefits

Survivor pension: 70% of the pension paid or accrued to the

insured for one survivor; 80% for two survivors; 90% for

three survivors; or 100% for four or more survivors.

Eligible survivors include a widow aged 45 or older (a

widower aged 53 or older), or disabled, or caring for a child

under age 15 (age 26 if a student, no limit if disabled); a

dependent mother aged 58 or older, or disabled; a dependent

father aged 63 or older, or disabled; and dependent

grandchildren, brothers, or sisters.

Funeral grant: 1.5 times the average pension in the quarter

before the insured’s death.

Benefit adjustment: Benefits are adjusted every quarter. The

adjustment is based equally on the increase in the cost of

living and on the increase in average net wages.
SSPTW: Europe, 2004 ♦ 199

Serbia

Administrative Organization

Social Security Institute provides general supervision.

Pension and disability funds administer the programs at the

local level.

Sickness and Maternity

Regulatory Framework

First law: 1922.

Current laws: 1992 and 1999 (health insurance for

foreigners).

Type of program: Social insurance system.

Note: This information is from 1999.

Coverage

Employees in industry, commerce, and agriculture; publicsector employees; members of handicraft and fishery

cooperatives; students; artists; self-employed workers; and

farmers. Foreign citizens including persons without

citizenship, those with refugee status, or those granted

asylum. Pensioners are covered for medical benefits.

Source of Funds

Insured person: Contribution rates vary according to

profession, up to a maximum of 9.7% of earnings.

Employer: Contribution rates vary, up to a maximum of 9.7%

of payroll.

Government: None.

Regional pension and disability associations and employment

associations pay contributions for beneficiaries’ health

coverage.

Qualifying Conditions

Sickness and maternity benefits: Coverage for

12 continuous months or for 18 months during the last

2 years.

Medical benefits: There is no minimum qualifying period.

Sickness and Maternity Benefits

Sickness benefit: The employer pays for the first 60 days.

The benefit is payable from the first day of incapacity until

recovery or until the award of a disability pension.

The minimum benefit is 50% of average earnings.

The maximum benefit is 75% of average earnings for the first

60 days and 95% from the 61st day if the qualifying period is

met; 90% if it is not.

Maternity benefit: 100% of earnings if the qualifying period

is met; 80% if it is not.

Maternity grant: The grant is determined by the health

insurance association.

Workers’ Medical Benefits

Medical services are provided directly to patients through the

facilities of the government health service on the basis of

contracts with local health insurance associations.

Dependents’ Medical Benefits

Same as for the insured person. The wife or another female

dependent of the insured receives the same maternity benefits

as an insured woman.

Administrative Organization

Health insurance funds administer the program at the local

level.

National Committee provides general coordination of

regional funds and associations.

Work Injury

Regulatory Framework

First law: 1922.

Current laws: 1983, 1992, 1999 (health insurance for

foreign citizens), and 2003.

Type of program: Social insurance system.

Coverage

Employees in industry, commerce, and agriculture; publicsector employees; members of handicraft and fishery

cooperatives; students; artists; self-employed workers; and

farmers. Foreign citizens including persons without

citizenship, those with refugee status, or those granted

asylum.

Source of Funds

Insured person: None.

Employer: See source of funds under Sickness and

Maternity, above.

Government: None.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying

period.
200 ♦ SSPTW: Europe, 2004

Serbia

Temporary Disability Benefits

100% of earnings. The benefit is payable from the first day of

incapacity until recovery or the award of a permanent disability

pension.

Permanent Disability Benefits

Permanent disability pension: The value of personal points

(a personal coefficient multiplied by 40) multiplied by the

value of the general point.

The personal coefficient is equal to the sum of annual

personal coefficients divided by 40. The annual personal

coefficient is the ratio between an individual wage and the

average wage in the Republic for the same calendar year.

The value of the general point is 242.07 dinars (2003).

For a disability caused by a work injury or an occupational

disease, the calculation of personal points is always based on

40 years of projected service.

Constant-attendance allowance: An allowance is provided

where necessary.

Benefit adjustment: Benefits are adjusted every quarter. The

adjustment is based equally on the increase in the cost of

living and on the increase in average net wages.

Workers’ Medical Benefits

Medical services are provided directly to patients through the

facilities of the government health service on the basis of

contracts with local health insurance associations.

Survivor Benefits

Survivor pension: 70% of the pension paid or accrued to the

insured for one survivor; 80% for two survivors; 90% for

three survivors; or 100% for four or more survivors.

Eligible survivors include a widow aged 45 or older (a

widower aged 53 or older), or disabled, or caring for a child

under age 15 (age 26 if a student, no limit if disabled); a

dependent mother aged 58 or older, or disabled; a dependent

father aged 63 or older, or disabled; and dependent

grandchildren, brothers, or sisters.

Funeral grant: The cost of the funeral.

Administrative Organization

Social Security Institute provides general supervision.

Pension and disability funds administer the programs at the

local level.

Union of Pension and Disability Associations coordinates and

administers short-term cash benefits.

Unemployment

Regulatory Framework

First law: 1927.

Current law: 1992.

Type of program: Social insurance system.

Note: This information is from 1999.

Coverage

Employed persons.

Source of Funds

Insured person: Contribution rates vary, up to a maximum of

0.9% of earnings.

Employer: Contribution rates vary, up to a maximum of 0.9%

of the employee’s earnings.

Government: None.

Qualifying Conditions

Unemployment benefit: Employed for the last 9 months or

12 of the last 18 months. Total household income from

employment should not exceed a specified monthly amount.

Unemployment Benefits

Unemployment benefit (income-tested): 70% of average

earnings in the last 3 months is payable for up to 3 months;

may be extended up to 30 months for workers with 30 years

of previous employment.

Administrative Organization

Unemployment funds coordinate and administer the program.

Family Allowances

Regulatory Framework

First law: 1949.

Current law: 1990.

Type of program: Employment-related system.

Note: This information is from 1999.

Coverage

Employees; some categories of self-employed persons; artists;

social insurance beneficiaries; and nonworking, low-income,

single mothers with one or more children.
SSPTW: Europe, 2004 ♦ 201

Serbia

Source of Funds

Insured person: Contribution rates vary.

Employer: Private-sector employers pay the total contribution

on behalf of their employees.

Government: None.

Qualifying Conditions

Family allowances: Child must be under age 15 (age 26 if a

student, no limit if disabled). Taxable household income

must be below the specified monthly amount, which is

adjusted periodically for changes in the cost of living. Most

laws also require 12 months of coverage.

Family Allowance Benefits

Family allowances (income-tested): The allowance varies

according to the number of children in the family.

Benefit adjustment: Allowances are adjusted periodically for

changes in the cost of living.

Administrative Organization

National Committee provides general coordination of the

regional funds and associations.

Self-governing regional associations administer programs.
202 ♦ SSPTW: Europe, 2004

Slovak Republic

Slovak Republic

Exchange rate: US$1.00 equals 33.16 koruna (SK).

Old Age, Disability, and Survivors

Regulatory Framework

First laws: 1906 (salaried employees) and 1924 (wage earners).

Current law: 2003 (social insurance act), implemented in 2004.

Type of program: Social insurance system.

Note: Beginning January 1, 2005, a new system consisting of

first-pillar mandatory social insurance and second-pillar

mandatory individual accounts will be implemented. All new

entrants to the workforce will be required to join the new twopillar system, but current workers will have until June 2006 to

choose whether to join the new system or stay in the old one.

Coverage

Employees, the self-employed, and voluntarily insured

persons.

Source of Funds

Insured person: 4% of earnings for old-age and survivor

pensions and 3% of earnings for disability and survivor

pensions; 26% for voluntary contributors.

Self-employed person: 26% of earnings.

Employer: 19% of payroll.

Government: 26% of the general assessment basis.

The general assessment basis is 12 times the national average

monthly wage in the relevant calendar year.

Qualifying Conditions

Old-age pension: Age 62 (men and women) with at least

10 years of insurance.

Early pension: A reduced pension is paid with at least

10 years of insurance. The early pension must be equal to at

least 1.2 times the adult subsistence income level

(5,502 SK).

Deferred pension: A deferred pension is possible.

Disability pension: At least a 40% loss of working capacity.

Survivor pension: The deceased met the pension

requirements for an old-age or disability pension or was a

pensioner at the time of death.

Old-Age Benefits

Old-age pension: The pension is equal to the product of

average personal wage points (the personal assessment basis

divided by the general assessment basis), the insurance

period, and the current pension value (183.58 SK).

The personal assessment basis is total earnings in the relevant

calendar year on which contributions were paid.

The general assessment basis is 12 times the national average

monthly wage in the relevant calendar year.

The pension value is adjusted annually on January 1 according

to changes in the national average wage.

Early pension: Same as the old-age pension, except the current

pension value is reduced by 0.5% for each 30-day period

before retirement age that the pension is awarded.

Deferred pension: Same as the old-age pension, except the

current pension value is increased by 0.5% for each 30-day

period after retirement age that the pension is awarded.

There is no officially stated minimum or maximum monthly

pension.

Benefit adjustment: Benefits are adjusted periodically

according to changes in consumer prices and the national

average wage.

Permanent Disability Benefits

Disability pension: The pension is paid with a minimum

insured period of at least 1 year if aged 22 or younger;

2 years if aged 23 to 24; 3 years if aged 24 to 26; 5 years if

aged 27 to 28; and at least 5 years if older than age 28.

With at least a 70% loss of working capacity, the pension is

based on average personal wage points (the personal

assessment basis divided by the general assessment basis),

the total projected insurance period up to retirement age, and

the current pension value.

With less than a 70% loss of working capacity, the pension is

based on the percentage loss of working capacity, average

personal wage points (the personal assessment basis divided

by the general assessment basis), the total projected

insurance period up to retirement age, and the current pension

value.

The personal assessment basis is total earnings in the relevant

calendar year on which contributions were paid.

The general assessment basis is 12 times the national average

monthly wage in the relevant calendar year.

The pension value is adjusted annually on January 1 according

to changes in the national average wage.

There is no officially stated minimum or maximum monthly

pension.

Benefit adjustment: Benefits are adjusted periodically

according to changes in consumer prices and the national

average wage.
SSPTW: Europe, 2004 ♦ 203

Slovak Republic

Survivor Benefits

Survivor pension: 60% of the insured’s pension is paid to a

widow(er). The pension ceases on remarriage.

Orphan’s pension: 30% of the insured’s pension until the end

of compulsory education (age 26 if a student or disabled).

There is no minimum survivor pension.

The maximum survivor pension is 100% of the insured’s

pension.

Benefit adjustment: Benefits are adjusted periodically

according to changes in consumer prices and the national

average wage.

Administrative Organization

Ministry of Labor, Social Affairs, and Family provides

supervision.

Social Insurance Agency, consisting of headquarters and

38 branch offices, administers the program.

Sickness and Maternity

Regulatory Framework

First law: 1888.

Current law: 2003 (social insurance act), implemented in 2004.

Type of program: Social insurance system.

Coverage

Employees, the self-employed, and voluntarily insured

persons.

Source of Funds

Insured person: 1.4% of earnings; voluntarily insured

persons contribute 4.4% of earnings.

Self-employed person: 4.4% of earnings.

Employer: 1.4% of payroll.

Government: None.

Qualifying Conditions

Cash sickness and medical benefits: Temporary incapacity

for work due to a sickness or an accident; the voluntarily

insured must also have at least 270 days of insurance in the

2 years before the onset of the incapacity.

Cash maternity benefits: 270 days of insurance in the

2 years before the expected date of childbirth.

Compensation allowance: Paid to women who are exempt

from some types of work while pregnant and who are

redeployed by their employer to another job paying lower

wages.

Sickness and Maternity Benefits

Sickness benefit: For the first 3 days, 25% of the daily

assessment basis; thereafter, 55% of the daily assessment

basis. The employer pays the first 10 days. (The Social

Insurance Agency pays benefits for the self-employed and

voluntarily insured from the first day of incapacity.) The

benefit is payable for up to 1 year.

The daily assessment basis is based on the value of earnings

on which contributions for sickness benefits have been paid

in the calendar year preceding the year of the onset of

incapacity.

Attendance care benefit: 55% of the daily assessment basis

to provide care for a sick child.

The daily assessment basis is based on the value of earnings

on which contributions for sickness benefits have been paid

in the calendar year preceding the year of the onset of

incapacity.

Maternity benefit: 55% of the daily assessment basis. The

benefit is payable for 28 weeks (37 weeks for a single mother

and for multiple births) including at least 6 weeks before the

expected date of childbirth.

The benefit is also paid for 22 weeks for fostering a child.

The daily assessment basis is based on the value of earnings

on which contributions for sickness benefits have been paid

in the calendar year preceding the year of the onset of

incapacity.

Compensation allowance: The benefit is 55% of the

difference between the monthly assessment basis for

compensation allowance (30.4167 times the daily assessment

basis) and the assessment basis on which contributions for

sickness benefit are paid. The benefit is paid for 1 calendar

month.

Workers’ Medical Benefits

Medical services are provided directly to patients through

General Health Insurance Agency facilities. Services include

medical treatment, hospitalization, medicines, dental care (with

limited cost sharing), maternity care, appliances, travel

expenses, sanatorium, and spa treatment.

Dependents’ Medical Benefits

Same as for family head. Medical services are provided

directly to patients through the General Health Insurance

Agency facilities. Services include medical treatment,

hospitalization, medicines, dental care (with limited cost

sharing), maternity care, appliances, travel expenses,

sanatorium, and spa treatment.

Administrative Organization

Ministry of Labor, Social Affairs, and Family provides

supervision.
204 ♦ SSPTW: Europe, 2004

Slovak Republic

Social Insurance Agency, consisting of headquarters and 38

branch offices, administers the program.

Ministry of Health and General Health Insurance Agency

administer medical services provided through health centers

and clinics.

Work Injury

Regulatory Framework

First law: 1887.

Current law: 2003 (social insurance act), implemented in

2004.

Type of program: Social insurance system.

Coverage

Employees.

Source of Funds

Insured person: None.

Employer: Contributions vary according to the assessed

degree of risk. The average contribution is 1.2% of payroll.

Government: None.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying

period.

Temporary Disability Benefits

Temporary disability benefit (injuries bonus): The benefit is

paid for a work injury or occupational disease. The benefit is

62% of the daily assessment basis for 3 days of incapacity or

25% of the daily assessment basis for 4 days of incapacity.

The daily assessment basis is based on the value of earnings

on which contributions for sickness benefits have been paid

in the calendar year preceding the year of the onset of

incapacity.

Rehabilitation benefit: 80% of the daily assessment basis.

Retraining allowance: 80% of the daily assessment basis.

Permanent Disability Benefits

Permanent disability benefit: With at least a 70% loss of

working capacity, the pension is based on average personal

wage points (the personal assessment basis divided by the

general assessment basis), the total projected insurance

period up to retirement age, and the current pension value.

With less than a 70% loss of working capacity, the pension is

based on the percentage loss of working capacity, average

personal wage points (the personal assessment basis divided

by the general assessment basis), the total projected

insurance period up to retirement age, and the current pension

value.

The personal assessment basis is total earnings in the relevant

calendar year on which contributions were paid.

The general assessment basis is 12 times the national average

monthly wage in the relevant calendar year.

The pension value is adjusted annually on January 1 according

to changes in the national average wage.

There is no officially stated minimum or maximum monthly

pension.

Injury annuity: The benefit is paid for a loss of 40% or more

of working capacity as a result of a work injury or

occupational disease. The benefit cannot be paid at the same

time as the injuries bonus or while receiving rehabilitation

benefits or retraining allowances. The monthly benefit is

based on 80% of the assessment basis (30.4167 times the daily

assessment basis) and the percentage loss of working

capacity.

The daily assessment basis is based on the value of earnings

on which contributions for sickness benefits have been paid

in the calendar year preceding the year of the onset of

incapacity.

Injury settlement: The lump sum is paid for a loss of at least

10% but not more than 40% of working capacity as a result of

a work injury or occupational disease. The lump sum is based

on the assessment basis (365 times the daily assessment basis)

and the percentage loss of working capacity.

The daily assessment basis is based on the value of earnings

on which contributions for sickness benefits have been paid

in the calendar year preceding the year of the onset of

incapacity.

Workers’ Medical Benefits

Same as for the medical benefits shown under sickness benefit,

above, plus the cost of specialist medical treatment (up to

500,000 SK) and rehabilitation.

Survivor Benefits

Survivor pension: 60% of the insured’s pension is paid to a

widow(er). The pension ceases on remarriage.

Orphan’s pension: 30% of the insured’s pension until the end

of compulsory education (age 26 if a student or disabled).

There is no minimum survivor pension.

The maximum survivor pension is 100% of the insured’s

pension.

Benefit adjustment: Benefits are adjusted periodically

according to changes in consumer prices and the national

average wage.

Death benefit: A lump sum is payable to the spouse or child

of a person who died of a work injury or an industrial disease.

The maximum benefit for a spouse must not exceed
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Slovak Republic

1,000,000 SK. The maximum benefit for one child is 50% of the

benefit paid to the spouse; the total maximum benefit for

children must not exceed 1,000,000 SK.

Benefit adjustment: The death benefit is adjusted in July

according to changes to the old-age pension.

Funeral benefit: The cost of the funeral of a person who died

of a work injury or an industrial disease. The pension is paid

to the person who met the cost of the funeral, up to a

maximum.

Administrative Organization

Ministry of Labor, Social Affairs, and Family provides

supervision.

Social Insurance Agency, consisting of headquarters and 38

branch offices, administers the program.

Ministry of Health and General Health Insurance Agency

administer medical services provided through health centers

and clinics.

Unemployment

Regulatory Framework

First law: 1991.

Current law: 2003 (social insurance act), implemented in

2004.

Type of program: Social insurance system.

Coverage

Unemployed job seekers.

Source of Funds

Insured person: 1% of earnings; voluntary contributors, 2%.

Employer: 1% of payroll.

Government: None.

Qualifying Conditions

Unemployment benefit: Registered with a labor office,

looking for work, and younger than age 62. Unemployment

insurance contributions were paid for at least 3 of the last

4 years.

Unemployment Benefits

50% of the daily assessment basis is paid for up to 6 months.

The daily assessment basis is based on the value of earnings

on which contributions have been paid in the 3 calendar years

preceding unemployment.

Administrative Organization

Ministry of Labor, Social Affairs, and Family provides

supervision.

Social Insurance Agency, consisting of headquarters and 38

branch offices, administers the program.

Family Allowances

Regulatory Framework

First law: 1945.

Current laws: 1994, 1995, 1996, 1997, 1998, 1999, and 2001.

Type of program: Universal system.

Coverage

Residents; noncitizens must have at least 1 year’s residence.

Source of Funds

Insured person: None.

Employer: None.

Government: Total cost.

Qualifying Conditions

Family allowances (child allowances): Until the completion

of compulsory education; age 25 if a student or disabled.

Parental allowance: For a parent taking daily care of a child

under age 4; under age 7 if the child has special health care

needs.

National service allowance: Awarded to the spouse and

dependent children of a person performing military or

civilian national service duties.

Birth grant (layette): A grant for the purchase of clothing and

other necessities for a newborn child whose father, mother,

or guardian has permanent residence in the Slovak Republic.

Multiple birth allowance: An annual allowance paid to parents

to care for the birth of triplets or more children or the birth

of two sets of twins within a 2-year period. The family must

be resident in the Slovak Republic and have at least three

children younger than age 15.

Foster parent grant: Paid to a foster caregiver without the

means to provide necessary care.

Foster care allowance: Paid for children in foster care.

Funeral allowance: A lump-sum social benefit.

Family Allowance Benefits

Family allowances (child allowances): 500 SK a month for

each child. The allowance is paid regardless of family

income.
206 ♦ SSPTW: Europe, 2004

Slovak Republic

Parental allowance: 3,790 SK a month; 1,200 SK if the parent

is gainfully employed or receiving sickness benefits.

National service allowance: 800 SK a month for a dependent

child and 1,050 SK a month for a spouse or other dependent.

Birth grant (layette): 4,000 SK; the grant is increased by 50%

for the birth of triplets or more children.

Multiple birth allowance: For a child up to age 6, the

allowance is equal to 2,160 SK a month; aged 6 to 15,

2,660 SK; older than age 15, 2,840 SK.

Foster parent grant: For a child up to age 6, the lump-sum

grant is 5,400 SK; aged 6 to 15, 6,640 SK; older than age 15,

7,080 SK.

A lump sum of 7,080 SK is payable on the termination of

foster care.

Foster care allowance: For a child up to age 6, the monthly

allowance is 2,160 SK; aged 6 to 15, 2,660 SK; older than

age 15, 2,840 SK.

Funeral allowance: 2,100 SK.

Administrative Organization

Ministry of Labor, Social Affairs, and Family provides

supervision.

Social Insurance Agency, consisting of headquarters and 38

branch offices, administers the program.
SSPTW: Europe, 2004 ♦ 207

Slovenia

Slovenia

Exchange rate: US$1.00 equals 190.87 tolar.

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1922.

Current laws: 1999, with 2000, 2001, 2002, and 2003

amendments.

Type of program: Social insurance system.

Coverage

Employed persons in industry, commerce, and agriculture;

public-sector employees; members of handicraft and fishery

cooperatives; and self-employed workers including

craftsmen, liberal professions, artists, and farmers.

Source of Funds

Insured person: The contribution rate varies. The average

contribution rate is 15.5% of earnings.

Employer: The contribution rate varies. The average

contribution rate is 8.85% of payroll.

Government: Covers the cost for veterans and certain groups

of insured (policemen, ex-active army officers) and makes up

the deficit in the event of an unforeseen decline in

contributions.

Qualifying Conditions

Old-age pension

Men: Age 58 with 40 years of contributions; age 63 with

20 years of contributions; or age 65 with 15 years of

contributions.

Women: Age 54 and 8 months with 35 years and 9 months of

contributions (in 2005, age 55 with 36 years of contributions);

age 59 and 8 months with 20 years of contributions (in 2005,

age 60 with 20 years of contributions); or age 61 and 8 months

with 15 years of contributions (in 2005, age 62 with 15 years of

contributions).

For both men and women, retirement from insured employment

is necessary.

Payment abroad is permitted under reciprocal agreement.

The full pensionable age for both men and women will increase

gradually to age 63 (men) and age 61 (women), with the

contribution period increasing to 40 years and 38 years,

respectively.

Early pension: An early pension is possible.

Deferred pension: A deferred pension is possible.

Disability pension: Loss of working capacity (total disability)

or greatly reduced capacity for regular or equivalent work

(partial disability). A coverage period of at least 1/3 of the

years after age 20 (1/4 if younger than age 30; 1/4 after age 21

and younger than age 30; insured or 3 months of insurance

before age 20).

Survivor pension: The deceased had completed a 5-year

insurance period, had 5 years of pension contributions, or was

receiving or had fulfilled the conditions for an old-age

pension or disability pension.

Old-Age Benefits

A minimum of 35% (men) or 38% (women) of average earnings

during the 14 highest paid consecutive years (15 in 2005) of the

insured period since 1970 (pension rating base). Past earnings

are revalued for changes in average wages and pensions. An

increment of 1.5% of earnings is awarded for each year of

insurance from 2000. An additional increment of 2% is awarded

for each year before 2000 if the total number of years of

insurance coverage exceeds 15, with the exception of women,

who are awarded 3% for each year before 2000 if coverage

exceeds 20.

The pension rating base is the insured’s monthly average

earnings/income on which contributions were paid during the

14 highest paid consecutive years of the insured period since

1970.

Partial pension: A reduced pension is paid with less than

40 years (men) or 38 years (women) of service.

Early pension: A reduced pension is paid if retirement is

prior to the full pensionable age.

Deferred pension: An increased pension is paid if retirement

is after the full pensionable age.

The maximum pension varies according to the length of the

qualifying period but is no more than four times the minimum

pension.

Benefit adjustment: Benefits are adjusted on an ad hoc basis

twice a year according to the growth of average salaries and

pensions in a prescribed period.

Permanent Disability Benefits

Disability pension: A minimum of 45% (men) or 48%

(women) of average earnings during the 14 highest paid

consecutive years (15 in 2005) of the insured period from

1970 (pension rating base) if the onset of disability is before

age 63 (men) or age 61 (women); otherwise, 35% (men) or

38% (women) of average earnings during the 14 highest paid

consecutive years (15 in 2005) of the insured period from

1970. Past earnings are revalued for changes in average wages

and pensions. An increment of 1.5% of earnings is awarded for

each year of insurance from 2000. An additional increment of

2% is awarded for each year before 2000 if the total number of

years of insurance coverage exceeds 15, with the exception of

women, who are awarded 3% for each year before 2000 if

coverage exceeds 20.
208 ♦ SSPTW: Europe, 2004

Slovenia

The pension rating base is the insured’s monthly average

earnings/income on which contributions were paid during the

14 highest paid consecutive years of the insured period since

1970.

The pension calculation period covers years of insurance

coverage and projected years. Projected years are calculated

as 2/3 of the period between the onset of disability and

age 58 and 1/2 of the period between age 58 and age 63

(men) or age 61 (women).

The maximum pension varies according to the length of the

qualifying period but is no more than four times the minimum

pension.

Partial disability: The minimum benefit is 35% of the minimum

pension rating base. The maximum benefit is 80% of the

disability pension.

Benefit adjustment: Disability pensions are adjusted on an ad

hoc basis twice a year according to the growth of average

salaries and pensions in a prescribed period.

Constant-attendance allowance: Provided where necessary.

Benefit adjustment: The allowance is adjusted twice a year

according to growth of average salaries.

Survivor Benefits

Survivor pension: Age 52 and 6 months for a widow (age 53

in 2005) or age 53 for a widower.

The minimum survivor pension is 70% of the pension

awarded or accrued to the insured if there is one survivor; a

combined total of 80% for two survivors; 90% for three

survivors; 100% for four or more survivors.

Eligible survivors: A widow(er); children under age 15 (age 26

if a student); a dependent mother age 52 and 6 months (age 53

in 2005) and a dependent father age 57 and 6 months (age 58 in

2005) or disabled; dependent grandchildren, brothers, and

sisters.

Benefit adjustment: Pensions are adjusted on an ad hoc basis

twice a year according to the growth of average salaries.

Administrative Organization

Institute for Pension and Invalidity Insurance of Slovenia,

including nine regional units, administers the program.

Sickness and Maternity

Regulatory Framework

First laws: 1922 (sickness) and 1949 (maternity).

Current laws: 1992 (sickness), with 2001 amendment; and

2001 (maternity).

Type of program: Social insurance system.

Coverage

Sickness benefits: Employed persons, self-employed

persons, and farmers (if insured).

Maternity benefits: Persons insured for parental leave and

eligible for maternity benefit (mothers, fathers, and third

persons caring for the child during leave from work).

Source of Funds

Insured person

Sickness benefits: 6.36% of gross salary.

Maternity benefits: Employees contribute 0.1% of their gross

salary; self-employed persons and farmers (if insured)

contribute 0.2% of the insurance base for Old Age, Disability,

and Survivors (see above).

Employer

Sickness benefits: 6.36% of gross payroll.

Maternity benefits: 0.1% of gross payroll.

Government

Sickness and maternity; benefits in kind: Contributions are

credited on behalf of certain groups of insured. Government

pays for the health care of military personnel, refugees, and

prisoners. Government also pays for the collection of blood,

organs, and tissues for transplantation.

Sickness and maternity; cash benefits: Contributions are

credited on behalf of certain groups of insured. Government

finances 92% of the cost of maternity benefits from general

taxation.

Qualifying Conditions

Sickness benefit: There is no minimum qualifying period.

Maternity benefit: The mother must be covered by parental

leave insurance prior to the first day of compulsory maternity

leave. The father of the child, the adoptive parent, or any

other person who cares for the child must have the right to

maternity leave and coverage for parental leave.

Sickness and Maternity Benefits

Sickness benefit: 80% to 100% of average wages in the

previous year, depending on the cause of absence. The

benefit cannot be lower than the minimum wage. The employer

pays the benefit for the first 30 days.

Maternity benefit: 100% of earnings is payable during

maternity leave (105 calendar days, 28 of which are taken

before the expected date of childbirth) and during child-care

leave (260 calendar days), for 365 calendar days in total. The

father is entitled to paternity leave to the same extent as the

mother for maternity leave, minus the number of days already

used by the mother. The minimum duration of paternity leave
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taken by the father must not be less than 28 days. If the father

cares for the child instead of the mother, he can also be entitled

to up to 260 days of child-care leave.

Maternity and child-care leave may be prolonged in instances

of multiple births, premature births, the birth of a child with

physical or mental impairment, or if the parents are already

rearing at least two other children under age 8.

Workers’ Medical Benefits

Provided through public health facilities on the basis of

separate contracts between contractors and the insurance

institute. Insured individuals contribute a portion of the cost

of fees that vary with the type and complexity of the service

provided.

Dependents’ Medical Benefits

Provided through public health facilities on the basis of

separate contracts between contractors and the insurance

institute. Insured individuals contribute toward the cost of

fees that vary with the type and complexity of the service

provided.

Administrative Organization

Sickness benefit: Institute of Health Insurance of Slovenia,

including 10 regional units, administers the program.

Maternity benefit: Sixty-two social work centers administer

the program.

Ministry of Labor, Family, and Social Affairs pays benefits.

Work Injury

Regulatory Framework

First law: 1922.

Current laws: 1992, 1993, 1996, 1998, 1999, and 2001 (health

insurance), with amendments; and 1999 (pension and

invalidity), with 2000, 2001, 2002, and 2003 amendments.

Type of program: Social insurance system.

Coverage

Employees, self-employed persons, farmers, and other

persons insured under the pension and disability scheme,

including students in secondary and postsecondary education

in a work placement program, professional excursions, or paid

work; physically and mentally disabled individuals in

professional training, work placements, or practical training;

unemployed persons performing public work; volunteers; and

prisoners.

Source of Funds

Insured person: The contributions for temporary and

permanent disability benefits are taken from the insured’s

combined contribution for Old Age, Disability, and Survivors

and Sickness (see above). Self-employed persons and

farmers pay 0.53% of the insurance base for Old Age,

Disability, and Survivors (if covered) for temporary disability,

and the contribution for permanent disability is taken from

the insured’s combined contribution for Old Age, Disability,

and Survivors and Sickness (see above).

Employer: The contribution for temporary disability is 0.53%

of payroll. The contribution for permanent disability is taken

from the combined contribution for Old Age, Disability, and

Survivors and Sickness (see above).

Government: The government makes up any deficit caused

by a decline in contribution rates for permanent disability

benefits.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying

period.

Temporary Disability Benefits

100% of base earnings for a temporary absence from work

due to an occupational disease or work injury. The benefit is

paid from the first day of incapacity until recovery or

certification with a permanent disability.

Base earnings are calculated as the average monthly gross

wage received in the calendar year preceding the year in

which the temporary disability occurred.

Permanent Disability Benefits

Permanent disability pension: Paid at a minimum of 82.5%

of the pension rating base (82% in 2005). The benefit

calculation is the same as that made for permanent disability

pension under Old Age, Disability, and Survivors, above.

The pension rating base is the insured’s monthly average

earnings/income on which contributions were paid during the

14 highest paid consecutive years of the insured period since

1970.

The minimum benefit will be reduced by 0.5% of the pension

rating base each calendar year until 2025 (men) and 2023

(women).

Benefit adjustment: The allowance is adjusted twice a year

according to growth of average salaries.

Survivor Benefits

Survivor pension: 70% of the pension awarded or accrued to

the insured is paid for one survivor; a combined total of 80%

for two survivors; 90% for three survivors; 100% for four or

more survivors.

Eligible survivors: Widow(er); children under age 15 (age 26 if

a student); a dependent mother age 52 and 6 months (age 53 in

2005) and a dependent father age 57 and 6 months (age 58 in

2005) or disabled; dependent grandchildren, brothers, and

sisters.
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Slovenia

Benefit adjustment: Benefits are adjusted on an ad hoc basis

twice a year according to the growth of average salaries.

Administrative Organization

Institute for Pension and Invalidity Insurance of Slovenia and

Institute of Health Insurance of Slovenia administer the

program.

Unemployment

Regulatory Framework

First law: 1927.

Current laws: 1991, 1992, 1993, 1994, 1998, and 2000.

Type of program: Social insurance system.

Coverage

Employed persons in industry, commerce, and agriculture;

public employees; and members of handicraft and fishery

cooperatives.

Source of Funds

Insured person: 0.14% of gross wage.

Employer: 0.06% of payroll.

Government: The government provides subsidies.

Qualifying Conditions

Unemployment benefit: Employed full-time with the same or

different employers during 12 months in the last 18 months

prior to becoming involuntarily unemployed and registered

with the Employment Service within 30 days of the termination

of employment; seasonal workers employed for a definite

period must have 12 months of insurance in the last 18 months

after the conversion of their working hours into the full-time

equivalent. Individuals must be capable of, available for, and

actively seeking employment.

Unemployment Benefits

70% of the base for the first 3 months; thereafter, 60%.

The base is calculated as the average monthly earnings in the

12 months prior to the termination of employment.

The duration of benefit is related to the length of the

contribution period: 3 months of benefit for an insurance

period of 1 to 5 years; 6 months of benefit for 5 to 15 years;

9 months of benefit for 15 to 25 years; 12 months of benefit

for 25 years; 18 months of benefit for insured persons over

age 50 with an insurance period of more than 25 years;

24 months of benefit for insured persons over age 55 with an

insurance period of more than 25 years.

Administrative Organization

Employment Service of Slovenia, including 10 regional units,

administers the program.

Family Allowances

Regulatory Framework

First law: 1949.

Current law: 1993.

Type of program: Universal system.

Coverage

Families with children residing permanently in Slovenia.

Source of Funds

Insured person: None.

Employer: None.

Government: Total cost.

Qualifying Conditions

Family allowances: Paid to a parent or a third person if the

child is under age 18 (age 26 if a student, in training, or with a

serious infirmity), a citizen, or any person entitled under the

conditions of international law.

Family Allowance Benefits

Child benefit: The benefit is awarded according to eight

income categories ranging from a maximum for those earning

15% or less of the average monthly national wage in the

calendar year prior to the application down to a minimum

level for those earning between 75% and 99%. Higher rates

are awarded for the second and third child; thereafter, the

benefit for each subsequent child is paid at the same rate as

the third child.

Special child-care allowance: 20,170 tolar (40,330 tolar for

a child in need of 24-hour care) is paid monthly. Paid to

families with a child up to age 17 (age 26 if a student) with a

need for special medical care.

Birth grant (layette): A lump sum of 56,010 tolar for the

purchase of clothing and other necessities for a newborn

child whose father or mother has permanent residence in

Slovenia.

Large family allowance: An annual benefit of 78,420 tolar

paid to families with several children.

Parent income supplement: Paid to one parent who has

ceased or reduced work to care for a child with a severe

physical or mental disability. The monthly benefit is the

national minimum wage on which contributions are paid. The

benefit is paid until the child is age 18.
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Slovenia

Benefit adjustment: Benefits are adjusted periodically

according to the growth in prices of basic necessities.

Administrative Organization

Sixty-two social work centers administer the program.

Ministry of Labor, Family, and Social Affairs pays benefits.
212 ♦ SSPTW: Europe, 2004

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Spain

Exchange rate: US$1.00 equals 0.80 euros (€).

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1919.

Current law: 1994.

Type of program: Social insurance system.

Coverage

Employees in industry and services (classified according to

11 occupational classes).

Special systems for agricultural workers and small farmers,

domestic servants, the self-employed, seamen, and coal

miners.

Source of Funds

Insured person: 4.7% of covered earnings based on wage

classes that vary according to 11 occupational classes.

Employer: 23.6% of earnings according to 11 occupational

classes.

Government: Annual subsidy.

The maximum earnings for contribution and benefit purposes

are €2,731.50 a month for occupational classes 1 to 7 and a

maximum daily base of €91.05 for occupational classes 8 to

11.

Qualifying Conditions

Old-age pension: Age 65 (age 64 if the position of the retiring

worker is to be taken by a person registered as unemployed)

with 15 years of contributions, including 2 years of

contributions in the last 15 years. Retirement from employment

is necessary.

The retirement age is lower for difficult, dangerous, or

unhealthy work.

Early pension: Age 61 with 30 years of contributions if the

insured is involuntarily unemployed and registered as a job

seeker for at least 6 months before applying for the pension.

The pension is paid at a reduced rate.

Under transitional provisions, entitlement to a reduced

pension at age 60 (legislation before January 1, 1967) is also

still in effect.

The pension is payable abroad if reciprocity exists.

Disability pension: The loss of normal earning capacity. If

under age 26, the insured must have contributed for 1/2 of the

period between age 16 and the onset of disability; if over

age 26, the insured must have contributed for 1/4 of the

period from age 20 to the onset of disability, with at least

5 years of contributions and at least 1/5 of the required

contributions in the last 10 years.

Survivor pension: The insured had 500 days of contributions

in the last 5 years and died from a common illness, was a

pensioner at the time of death, or had at least 15 years of

contributions.

Old-Age Benefits

Old-age pension: 50% of the benefit base for the first

15 years of contributions, plus 3% for each year between 16

and 25 years of contributions and 2% for each year beginning

with the 26th year, up to a maximum of 100%. Since

January 1, 2002, the pension amount may exceed 100% for

those who retire at age 65 or older and who have at least

35 years of credited contributions. The value of 2% of the

benefit base is added for each deferred year. The benefit

amount cannot exceed the maximum public pension benefit in

effect.

The minimum pension at age 65 is €411.76 a month; €484.89

with a dependent spouse.

Early pension: A reduced pension is payable if under age 65.

Early pensions are reduced by 8% for each year the pension

is taken before age 65 for persons with 30 years of

contributions, by 7.5% with 31 to 34 years of contributions,

7% with 35 to 37 years of contributions, by 6.5% with 38 to

39 years of contributions, or by 6% if 40 years or more of

contributions.

The minimum early pension is €386.66; €453.16 with a

dependent spouse.

Schedule of payments: Fourteen payments a year.

Benefit adjustment: Periodic adjustment of pensions each

year according to the anticipated changes in the consumer

price index for that year.

Permanent Disability Benefits

Disability pension: For permanent total (all work) disability,

the pension is 100% of the benefit base. For permanent total

(occupational) disability (100% loss of working capacity in

the insured’s trade or profession), the award is 55% of the

benefit base, plus 20% if aged 55 or older and not employed.

Permanent total disability (all work): The minimum award, if

age 65, is €411.76 a month; €484.89 with a dependent

spouse.

Permanent total disability (occupational): The minimum

award, if age 65, is €411.76 a month; €484.89 with a

dependent spouse.

Permanent total disability (third-person assistance): The

minimum award is €617.64 a month; €727.34 with a

dependent spouse.

Eligibility for a permanent disability benefit caused by a work

injury or an occupational disease occurring at age 65,

according to the assessed degree of disability, is possible.
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Spain

If the disability is not caused by a work injury or an

occupational disease occurring at age 65 or older and the

person does not meet the old-age pension qualifying

conditions, the pension benefit is calculated subject to the

assessed degree of disability and 50% of the benefit base.

Constant-attendance allowance: 50% of the value of the

pension.

Schedule of payments: Fourteen payments a year.

Permanent partial disability: A lump-sum award equal to

24 times the monthly benefit base for a temporary disability

that may result in a permanent disability.

Schedule of payments: Fourteen payments a year.

Benefit adjustment: Periodic adjustment of pensions each

year according to anticipated changes in the consumer price

index for that year.

Survivor Benefits

Survivor pension: 52% of either the survivor’s or the

insured’s benefit base. For survivors with income below a

government-set level, the pension is 50% of income (70% of

the benefit base with dependents). The pension is payable to a

widow(er).

A widow(er) or a surviving former spouse who remarries is not

eligible unless the beneficiary is aged 61 or older at the time

of remarriage, receives a permanent disability pension (all

work or third-person assistance), or is at least 65% disabled;

the survivor pension represents 75% of the pensioner’s total

income; or the newly married couple’s income does not

exceed twice the minimum wage (if the income exceeds this

level, the amount of the pension will be decreased

proportionately).

The minimum survivor pension is €306.15 a month for

persons younger than age 60 without dependent children;

€383.66 for persons with dependents. For survivors aged 60

to 64, €383.66; aged 65 or older, €411.76.

Orphan’s pension: 20% of the insured’s benefit base for each

orphan under age 18 or disabled. If not disabled or working

but annual income is less than 75% of the minimum wage, the

pension is paid up to age 22 with one surviving parent; up to

age 24 for a full orphan. The same rules apply to grandchildren

and siblings.

The minimum orphan’s pension is €124.46 a month for each

orphan. If there is only one full orphan, €430.65 a month; if

there are other surviving children, the individual pension is

increased by €306.15 and divided by the number of orphans.

Other eligible survivors: Dependent parents and

grandparents; minor or disabled siblings or grandchildren;

children or siblings over age 45; and single, widowed,

separated, or divorced spouses, under certain circumstances.

Entitlement is 20% of the insured’s benefit base, which can

be increased by the widow’s pension if there is no surviving

spouse or eligible surviving children.

The minimum pension for other eligible survivors is €124.96

a month. If there is no surviving spouse or eligible surviving

children, a single beneficiary receives €320.44 a month (over

age 65) or €301.71 a month (under age 65). If there are

several beneficiaries, a monthly sum of €181.69 is divided

among all eligible survivors.

The maximum total survivor pension is 100% of the benefit

base.

Funeral grant: €30.05.

Administrative Organization

Ministry of Labor and Social Affairs provides general

supervision.

General Treasury of Social Security administers the

economic resources of the social security system.

National Institute of Social Security administers and pays

cash benefits.

Institute of Migration and Social Services administers

benefits in kind.

Sickness and Maternity

Regulatory Framework

First laws: 1929 (maternity) and 1942 (sickness).

Current law: 1994.

Type of program: Social insurance system. Cash and

medical benefits.

Coverage

Sickness and maternity cash benefits: Employees in

industry, commerce, and services.

Medical benefits: Pensioners and employees in industry,

commerce, and services.

Special systems for agricultural workers and small farmers,

domestic servants, the self-employed, seamen, and coal

miners.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability,

and Survivors, above.

Government: An annual subsidy.

The maximum earnings for contribution and benefit purposes

are €2,731.50 a month for occupational classes 1 to 7 and a

daily maximum base of €91.05 for occupational classes 8 to

11.

Qualifying Conditions

Cash sickness benefits: Must have 180 days of

contributions during the last 5 years.
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Spain

Cash maternity benefits: Must have 180 days of

contributions during the 5 years before childbirth or the

official date of the fostering (or the adoption) of the child.

Medical benefits: Currently insured, a pensioner, or a

recipient of periodic social security benefits. There is no

minimum qualifying period.

Sickness and Maternity Benefits

Sickness benefit: 60% of the benefit base is payable for the

4th to the 20th day (the employer pays from the first through

to the 15th day); thereafter, 75% of the benefit base for up to

12 months (may be extended to 18 months; 30 months in

special cases).

Maternity benefit: 100% of benefit base is payable for

16 weeks; 18 weeks for each child in the case of multiple

births. For the adoption or foster care of a child under age 6

(or older if disabled and in other exceptional circumstances),

benefit is payable for 16 weeks (plus 2 weeks for a second and

subsequent adopted or fostered children). If the mother does

not meet the qualifying conditions, the benefit is payable to

the father for 6 fewer weeks. If both parents are employed, the

benefit can be shared between the mother and father and the

leave period may also be taken on a part-time basis. The timing

of the payment period can be adjusted in cases of premature

birth and the extended hospitalization of the child.

Workers’ Medical Benefits

Medical services are provided to patients directly through the

facilities of the National Health Institute, the regional

autonomous health services, or by contracted doctors and

hospitals. Benefits include general and specialist care,

hospitalization, medicines, dental care, maternity care,

laboratory services, appliances, and transportation.

Cost sharing: The patient generally pays 40% of the cost of

medicines prescribed for outpatient treatment. Medicines

are free for pensioners and when dispensed by social security

facilities. In the case of some specific and chronic listed

diseases, the beneficiary pays 10% of the cost up to a

maximum of €2.64. When the cost of the prescribed

medicine is higher than the reference cost, the beneficiary

pays the difference.

There may be a limit to duration in certain cases.

Dependents’ Medical Benefits

Medical services are provided to patients directly through the

facilities of the National Health Institute, the regional

autonomous health services, or by contracted doctors and

hospitals. Benefits include general and specialist care,

hospitalization, medicines, dental care, maternity care,

laboratory services, appliances, and transportation.

Cost sharing: The patient generally pays 40% of the cost of

medicines prescribed for outpatient treatment. Medicines

are free for pensioners and when dispensed by social security

facilities. In the case of some specific and chronic listed

diseases, the beneficiary pays 10% of the cost up to a

maximum of €2.64. When the cost of the prescribed medicine is

higher than the reference cost, the beneficiary pays the

difference.

There may be a limit to duration in certain cases.

Administrative Organization

Ministry of Labor and Social Affairs and Ministry of Health

and Consumers provide general supervision.

National Institute of Social Security administers and pays cash

benefits.

General Treasury of Social Security administers the resources

of the social security system.

Ministry of Health and Consumers, through the National

Health Institute, operates its own medical centers.

Regional autonomous communities provide benefits through

their health services.

Work Injury

Regulatory Framework

First law: 1900.

Current law: 1994.

Type of program: Social insurance system.

Coverage

Employed persons.

Special systems for some categories of worker.

Source of Funds

Insured person: None.

Employer: 0.81% to 16.20% of payroll, according to the

assessed degree of risk. The average contribution rate is

1.98%.

Government: None.

The maximum monthly earnings for contribution and benefit

purposes are €2,731.50.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period,

even for those who sustained a work injury or who were

diagnosed with an occupational disease at age 65.

Temporary Disability Benefits

75% of the benefit base. The calculation of the benefit base

also includes the extra number of hours worked during the

12 months prior to the work injury. The benefit is payable

from the day following the work injury for up to 12 months
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(may be extended to 18 months; 30 months in exceptional

cases).

Permanent Disability Benefits

Permanent disability pension: For all assessed degrees of

disability, the award is calculated according to the insured’s

wage at the time the disability occurred.

Constant-attendance allowance: 50% of the value of the

pension.

Workers’ Medical Benefits

All necessary care, medicine, appliances, and rehabilitation.

There is no limit to duration.

Survivor Benefits

Survivor pension: 52% of either the survivor’s or the

insured’s benefit base. For survivors with income below a

government-set level, the benefit is 50% of income (70% of

the benefit base with dependents). The pension is payable to a

widow(er).

A widow(er) or a surviving former spouse who remarries is not

eligible unless the beneficiary is aged 61 or older at the time

of remarriage, receives a permanent disability pension (all

work or third-person assistance), or is at least 65% disabled;

the survivor pension represents 75% of the pensioner’s total

income; or the newly married couple’s income does not

exceed twice the minimum wage (if the income exceeds this

level, the amount of the pension will be decreased

proportionately).

The minimum pension is €306.15 a month for persons

younger than age 60 without dependent children; €383.66 for

persons with dependents. For survivors aged 60 to 64,

€383.66; aged 65 or older, €411.76.

Orphan’s pension: 20% of the insured’s benefit base for each

orphan under age 18 or disabled. If not disabled or working

but annual income is less than 75% of the minimum wage, the

pension is paid up to age 22 with one surviving parent; up to

age 24 for a full orphan. The same rules apply to grandchildren

and siblings.

The minimum orphan’s pension is €124.46 a month for each

orphan. If there is only one full orphan, €430.65 a month; if

there are other surviving children, the individual pension is

increased by €306.15 and divided by the number of orphans.

Other eligible survivors: Dependent parents and

grandparents; minor or disabled siblings or grandchildren;

children or siblings over age 45; and single, widowed,

separated, or divorced spouses, under certain circumstances.

Entitlement is 20% of the insured’s benefit base, which can

be increased by the widow’s pension if there is no surviving

spouse or eligible surviving children.

The minimum pension for other eligible survivors is €24.96 a

month. If there is no surviving spouse or eligible surviving

children, a single beneficiary receives €320.44 a month (over

age 65) or €301.71 (under age 65). If there are several

beneficiaries, a monthly sum of €181.69 is divided among all

eligible survivors.

Lump-sum benefits: Lump sums are provided for needy

dependent parents who are not entitled to a pension.

Funeral grant: €30.05.

Administrative Organization

Ministry of Labor and Social Affairs and Ministry of Health

and Consumers provide general supervision.

National Institute of Social Security pays benefits.

Unemployment

Regulatory Framework

First law: 1919.

Current law: 1994.

Type of program: Social insurance and social assistance

system.

Coverage

Employees in industry and services, railway employees,

miners, and seamen.

Exclusions: The self-employed and other specified groups.

Special systems for agricultural workers and members of

cooperatives.

Source of Funds

Insured person: 1.55% of the contribution base if the

insured has a permanent employment contract; 1.60% with a

fixed-term contract, regardless of occupational class.

Employer: 6% of payroll per employee if the employment

contract is permanent; for fixed-term contracts, the

contribution is 6.7% for full-time work or 7.7% for part-time

work (7.7% for full-time or part-time employment provided

through an agency specializing in temporary work contracts).

Contribution rates apply to all employees regardless of their

occupational class.

Government: Variable subsidies.

The maximum earnings for contribution and benefit purposes

are €2,731.50 for occupational classes 1 to 7 and a maximum

daily base of €91.05 for classes 8 to 11.

Qualifying Conditions

Unemployment benefit: The insured must have 12 months of

contributions during the last 6 years, be registered at the

employment office, and unemployment must not be due to

the refusal of a suitable job offer or training. The duration of
216 ♦ SSPTW: Europe, 2004

Spain

the benefit varies with the number of days of contributions.

The maximum duration of benefit is 720 days with 2,160 days or

more of contributions.

Unemployment assistance: Provided to workers who have

exhausted their contributory benefit entitlement or who are

not covered.

Unemployment Benefits

Unemployment benefit: 70% of average covered earnings

during the last 6 months for up to 180 days; 60% after

180 days.

The minimum benefit is 75% of the minimum wage or 100% of

the minimum interprofessional salary if the insured has at least

one dependent child.

The maximum benefit is 170% of the minimum interprofessional

salary, with a possible increase to 220% for workers with

children.

Unemployment assistance: The assistance is 75% of the

minimum interprofessional salary for 6 months (and may be

extended for two additional 6-month periods, to 18 months) if

earnings are less than 75% of the minimum interprofessional

salary.

Interprofessional salary: The minimum interprofessional

salary is €490 a month (July 2004).

Administrative Organization

Ministry of Labor and Social Affairs provides general

supervision.

National Employment Institute administers the program.

Family Allowances

Regulatory Framework

First law: 1938.

Current law: 1994, with 2003 amendment.

Type of program: Social assistance system.

Coverage

All Spanish citizens and legal residents.

Source of Funds

Insured person: None.

Employer: None.

Government: Total cost is financed from general revenue.

Qualifying Conditions

Family allowances: The child must be under age 18 (no limit

if at least 65% disabled). There is no minimum contribution

requirement.

Income-tested allowance: Family income is under €8,495.65

per year for a family with one child (the income limit is

increased by 15% for each additional child). There is no family

income limit for a family with a disabled child under age 18 who

has an assessed degree of disability of at least 33%; 65% if

aged 18 or older.

Birth or adoption grant: A lump-sum benefit is paid on the

birth or adoption of a third child. The lump sum is payable to

the mother, father, or legal guardian or custodian if family

income does not exceed the base income established for the

family allowance.

Multiple births or adoption grant: A lump-sum benefit is

payable to the mother, father, or legal guardian or custodian in

the event of multiple births or adoption. There is no income

limit.

Family Allowance Benefits

Family allowances

Income-tested allowance: For a child under age 18, the

allowance is €291.01 a year; €581.66 a year if the child is at

least 33% disabled; €3,217.08 a year if aged 18 or older and

at least 65% disabled; €4,825,68 a year if 75% or more

disabled and requires the help of another person to complete

essential routine tasks.

Birth or adoption grant: A lump-sum benefit of €450.76 is paid

on the birth of the third and subsequent children.

Multiple births or adoption grant: For the birth of twins, a lump

sum equal to four times the minimum interprofessional

salary; for the birth of triplets, a lump sum equal to eight

times the minimum interprofessional salary; for four or more

births, a lump sum equal to twelve times the minimum

interprofessional salary.

For multiple births, the lump sum can be paid at the same

time as the birth grant for third and subsequent children.

Interprofessional salary: The minimum interprofessional

salary is €490 a month (July 2004).

Administrative Organization

Ministry of Labor and Social Affairs provides general

supervision.

National Institute of Social Security and the Treasurer

General of Social Security pay benefits.
SSPTW: Europe, 2004 ♦ 217

Sweden

Sweden

Exchange rate: US$1.00 equals 7.31 kronor.

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1913.

Current laws: 1962 and 1998, implemented in 1999.

Type of program: Universal and social insurance system (old

system) and unified social insurance and individual notional

and mandatory individual accounts system (new system).

Note: In 1999, a new system of social insurance notional

accounts plus mandatory individual “premium pension”

accounts was established. There will be a gradual transition

from the old to the new system for persons born

between 1938 and 1953. Persons born in 1954 and later are

completely within the new system; those born in 1937 or

earlier will remain within the old system.

Coverage

Earnings-related pension (old system): All employed and

self-employed persons earning over 40,100 kronor a year.

Earnings-related pension (new system): All employed and

self-employed persons earning over 17,800 kronor a year.

Premium pension (new system): All employed and selfemployed persons earning over 17,800 kronor a year.

Guarantee pension (old and new system): All residents.

Source of Funds

The old and new systems have the same sources of funds.

Insured person: 7% of assessable income (up to

341,300 kronor) for old-age insurance; no contribution for the

survivor pension.

Self-employed person: 7% of assessable income (up to

341,300 kronor), plus 10.21% of assessable income for oldage insurance; 1.70% of assessable income for the survivor

pension.

Employer: 10.21% of payroll for old-age insurance, plus

1.70% of payroll for the survivor pension.

Note: The combined total of the insured person and

employer contributions (plus a small government

appropriation for government employee pension rights for

childcare years, national service, and study periods) is 16% to

the earnings-related component and 2.5% to the premium

pension component.

Government: The total cost of the guarantee pension (new

system) and permanent disability benefits. The government

pays earnings-related contributions for government civil

servants.

Qualifying Conditions

Earnings-related old-age pension (old system): Age 65 with

3 years’ coverage.

Early pension: A reduced pension is paid if aged 61 to 64.

Deferred pension: The pension can be deferred until age 70.

Earnings-related old-age pension (new system): The

retirement age is flexible beginning at age 61. The pension is

based on lifetime earnings reported to the scheme. The

insured must have years with annual earnings in excess of

17,800 kronor.

Premium pension (new system): The pension is based on

lifetime earnings reported to the scheme from age 16.

Guarantee pension (old and new systems): Age 65 and

resident in Sweden for at least 3 years.

Disability pension (sickness compensation): Work capacity

must be reduced by at least one quarter and the person must

be insured at the onset of disability. The earnings-related

sickness compensation is independent of insurance periods.

The residence-based guaranteed sickness compensation is

based on periods of residence.

Survivor pension: For the guaranteed survivor pension, the

insured was resident in Sweden for at least 3 years. The

earnings-related survivor pension is dependent on the

insured’s accrued old-age pension rights.

Note: Transitional rules introduced on January 1, 1990, apply

to the survivor pension program.

Old-Age Benefits

Earnings-related old-age pension (old system): 60% of

average income above 40,100 kronor in the 15 best years of

income. Income in years in which earnings were below

40,100 kronor is compensated at 96% for a single pensioner;

78.5% for a married pensioner.

The full pension requires 30 years of coverage. The pension is

reduced proportionally for shorter periods of coverage.

Early pension: Retirement between ages 61 and 64 results in

a permanent 0.5% reduction for each month the pension is

taken before age 65.

Deferred pension: The deferral of the pension until age 70

provides a permanent increment of 0.7% per month of

deferral.

Earnings-related old-age pension (new system): The

pension provided by the notional account is calculated using

an annual index, based on the development of average wages

(disability pension payments are counted as earnings for this

purpose), plus an annuity factor depending on average life

expectancy at the time of retirement for the appropriate age

cohort, and on a “norm” for the expected increase of average

wages in future years. The pension payments are calculated

by dividing total accrued pension assets by this factor. Life

expectancy is based on the most recent 5-year average of

unisex life expectancy statistics.
218 ♦ SSPTW: Europe, 2004

Sweden

The norm for the increase in average wages is set at 1.6%.

Benefit adjustment: The norm for the increase in average

wages is used for the annual adjustment of pensions.

Premium pension (new system): The pension is based on

contributions plus net returns converted into an individual,

joint, fixed, or variable annuity.

Guarantee pension (old and new systems): 83,709 kronor

for a single pensioner (74,670 kronor for a married pensioner)

with 40 years of residence and without an earnings-related

pension.

Old-age pensions are subject to taxation.

Benefit adjustment: Benefits are adjusted annually in relation

to the price index for the guaranteed pension. Earningsrelated pensions are adjusted annually in relation to the wage

index.

Permanent Disability Benefits

Guaranteed sickness compensation (disability pension):

94,320 kronor for an insured person with 40 years of

residence and without an earnings-related benefit. The

pension is reduced by 1/40 for each year of residence less

than 40.

Partial disability: A reduced pension is paid at 3/4, 1/2, or 1/4 of

the full pension according to the assessed degree of disability.

Constant-attendance supplement: Up to 27,117 kronor a year.

Earnings-related sickness compensation (disability

pension): 64% of the insured’s assumed future income,

calculated as an average of the 3 best income years within a

given period immediately before the year of the claim to

benefit.

Permanent disability benefits are subject to taxation.

Benefit adjustment: Benefits are adjusted annually in relation

to the price index for guaranteed sickness compensation.

Earnings-related sickness compensation is adjusted annually

in relation to the wage index.

Survivor Benefits

Guaranteed survivor pension: A pension is payable for

10 months to a widow(er) who was married to, or who

cohabited with (under certain conditions), the insured for at

least 5 years. The 10-month period may be extended if the

surviving spouse is a parent living with a child under age 18;

no limit if the child is under age 12.

The maximum pension is 83,709 kronor a year, provided the

insured had 40 years of residence in Sweden (including

assumed years of residence between the age at the time of

death and age 65) and the surviving spouse does not receive

an income-related pension.

Earnings-related survivor pension: A pension is payable to

a widow(er) for the same period of duration as the guaranteed

survivor pension. The pension is equal to 55% of the

insured’s accrued pension rights under the old-age pension

system.

Surviving child’s allowance: 15,720 kronor a year

(31,440 kronor for a full orphan) is paid to a surviving child

up to age 18 (age 20 if a student) who is not receiving an

orphan’s pension.

Orphan’s pension for a child under age 12: 35% of the

insured’s accrued right to the old-age pension. The pension is

increased by 21 percentage points per child if there is more

than one orphan.

The maximum survivor pension must not exceed 100% of the

insured’s pension.

Widows’ pension: Transitional rules apply to widows born

before 1945 who were married to the insured at the end of

1989.

Survivor benefits for dependents are subject to taxation.

Benefit adjustment: Benefits are adjusted annually according

to the price index for the guaranteed pension. Earningsrelated pensions are adjusted annually according to the wage

index.

Administrative Organization

National Social Insurance Board provides central administration and supervision.

Regional and local social insurance bodies administer the

program.

Premium Pension Agency administers mandatory individual

accounts.

Self-employed persons’ contributions are paid with income

tax. Employers’ contributions are collected by tax authorities

with employers’ income tax payments.

Sickness and Maternity

Regulatory Framework

First laws: 1891 (cash benefits) and 1931 (medical

benefits).

Current laws: 1962 and 1991 (sick pay from employer).

Type of program: Social insurance (cash benefits) and

universal (medical care) system.

Coverage

Cash benefits: Gainfully occupied persons earning

9,500 kronor or more a year.

Medical benefits: All residents.

Source of Funds

Insured person

Cash benefits: Employees make no contribution; selfemployed persons contribute 11.81% of payroll
SSPTW: Europe, 2004 ♦ 219

Sweden

(contributions may vary), plus 2.2% for parents’ cash benefits

(parental insurance).

Medical care: None.

Employer

Cash benefits: 11.08% of payroll, plus 2.2% for parents’ cash

benefits (parental insurance).

Medical care: None.

Government

Cash benefits: None.

Medical care: Total cost is met by regional county councils.

Qualifying Conditions

Cash sickness benefit: Income from employment or

involuntarily unemployed and registered with the employment

service.

Parents’ cash benefits (parental insurance): All residents

are entitled to benefits at the guaranteed and basic levels.

Each parent is entitled to benefits above a guaranteed level if

insured for cash sickness benefit above the guaranteed level

for at least 240 days before childbirth.

Pregnancy cash benefit (parental insurance): Paid to a

pregnant employee in a physically demanding job whose

employer is not able to transfer her to less demanding work.

Sickness and Maternity Benefits

Sickness benefit: 77.6% of income loss, based on an annual

income ceiling of 294,700 kronor. The benefit is payable

from the 22nd day of incapacity for the duration of the

illness. The benefit is paid for 7 days a week. Pensioners are

limited to 180 days of benefit after retirement.

Employers pay sickness benefits for days 2 to 21 at 80% of

income loss.

Self-employed persons and other qualifying nonemployees

receive 77.6% of income loss from days 2 to 21 (the number of

necessary qualifying days may vary).

The maximum daily benefit is 627 kronor.

Parents’ cash benefit for childbirth (parental insurance):

80% of income loss for 390 days (the guaranteed benefit is

180 kronor a day) and an additional 90 days at a basic level of

60 kronor a day. The total benefit duration for both parents

combined is 480 days per child until the child is age 8.

The maximum daily benefit for the 390-day period is

646 kronor.

Pregnancy cash benefit (parental insurance): 80% of

income loss. The guaranteed benefit is 180 kronor a day. The

benefit is payable for 50 days, beginning not earlier than

60 days nor later than 11 days before the expected date of

childbirth.

Temporary parents’ cash benefit (parental insurance): Paid

for the care of children under age 12 (age 16 if seriously ill,

chronically ill, or disabled; in certain cases, age 21 or age 23).

The benefit is 80% of income loss, up to an annual income

ceiling of 294,700 kronor. The total benefit duration for both

parents combined is 60 days per child a year on occasions

when the child or the child’s carer is sick. An additional

60 days per child may be paid for a sick child (but not for a sick

carer). A father is entitled to 10 extra days of benefit in

connection with the birth of his child.

Sickness and maternity cash benefits are subject to taxation.

Benefit adjustment: The minimum qualifying amounts and

maximum levels are adjusted annually according to the

consumer price index.

Workers’ Medical Benefits

Benefits include a refund of part of travel costs, free dental

care for children up to age 20, subsidies for basic and

preventive dental care, a high-cost limit for prosthetic

treatment, and free insulin.

A fee of 60 to 300 kronor is paid for each doctor’s

consultation. For inpatient treatment (including in a

maternity ward) in a public hospital, the patient pays a

maximum of 80 kronor a day (reduced for low-income

earners).

Patients pay the full cost of other medicines up to 900 kronor

in a 12-month period; thereafter, the partial cost met by

patients for other medicines must not exceed 1,800 kronor a

year. The maximum cost is 900 kronor a year for other kinds

of medical services.

Dependents’ Medical Benefits

Benefits include a refund of part of travel costs, free dental

care for children up to age 20, subsidies for basic and

preventive dental care, a high-cost limit for prosthetic

treatment, and free insulin.

A fee of 60 to 300 kronor is paid for each doctor’s

consultation. For inpatient treatment (including in a

maternity ward) in a public hospital, the patient pays a

maximum of 80 kronor a day (reduced for low-income

earners).

Patients pay the full cost of other medicines up to 900 kronor

in a 12-month period; thereafter, the partial cost met by

patients for other medicines must not exceed 1,800 kronor a

year. The maximum cost is 900 kronor a year for other kinds

of medical services.

Administrative Organization

Cash benefits: National Social Insurance Board provides

central administration and supervision.

Regional and local social insurance offices administer the

program.
220 ♦ SSPTW: Europe, 2004

Sweden

Contributions of employed and self-employed persons are paid

together with income tax. Employers’ contributions are

collected by the tax authorities with employers’ income tax

payments.

Medical care: National Board of Health and Welfare provides

central supervision.

Regional county councils administer and finance the program.

Work Injury

Regulatory Framework

First law: 1901.

Current laws: 1962 (social insurance), 1976, and 1991

(employers’ sick pay).

Type of program: Social insurance system.

Coverage

All employed and self-employed persons.

Source of Funds

Insured person: None; the self-employed contribute 0.68%

of earnings.

Employer: 0.68% of payroll.

Government: None.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying

period.

Temporary Disability Benefits

Temporary disability benefit is identical to sickness benefit

under Sickness and Maternity.

77.6% of income loss, up to an annual income ceiling of

294,700 kronor. The benefit is payable from the 22nd day of

incapacity for the duration of the illness. The benefit is paid

for 7 days a week. Pensioners are limited to 180 days of

benefit after retirement.

Employers pay temporary work injury benefits for days 2 to

21 at 80% of income loss.

The self-employed and other qualifying nonemployees

receive 77.6% of income loss from days 2 to 21.

The maximum daily benefit is 627 kronor.

Benefit adjustment: The minimum qualifying amounts and

maximum levels are adjusted annually according to the

consumer price index.

Permanent Disability Benefits

If the loss of income capacity is 100%, the benefit is 100% of

income up to a maximum of 294,700 kronor a year.

Partial disability: If the loss of income capacity is 1/15 or more,

the benefit is in proportion to the degree of lost income

capacity.

Disability benefits are coordinated with sickness compensation

(see Old age, Disability, and Survivors, above).

Work injury benefits are subject to taxation.

Benefit adjustment: Benefits are adjusted annually according

to a combined wage and price index.

Workers’ Medical Benefits

See benefits under Sickness and Maternity, above.

Survivor Benefits

Survivor pension: A pension is payable for 10 months if the

survivor was married to, or cohabited with (under certain

conditions), the deceased for at least 5 years. The 10-month

period may be extended up to a maximum of an additional

12 months if the surviving parent is living with a child under

age 18; no limit if living with a child under age 12.

The pension amount corresponds to 45% of the permanent

disability benefit the deceased was, or would have been,

entitled to; 20% if an orphan’s pension is paid at the same

time.

Orphan’s pension: Between 20% and 40% of the permanent

disability benefit the deceased was, or would have been,

entitled to for children under age 18 (under age 20 if

disabled). The pension amount depends on the number of

children entitled to an orphan’s pension.

Funeral grant: 11,790 kronor.

Survivor pensions are subject to taxation.

Benefit adjustment: Benefits are adjusted annually according

to a wage index.

Administrative Organization

National Social Insurance Board provides central

administration and supervision.

Regional and local social insurance offices administer

program.

Unemployment

Regulatory Framework

First law: 1934.

Current law: 1998.

Type of program: A subsidized program consisting of basic

insurance and a voluntary income-related insurance system.

Coverage

Voluntary program: Employed and self-employed persons

under age 65.
SSPTW: Europe, 2004 ♦ 221

Sweden

Basic program: Employees and persons seeking employment

if over age 20 and under age 65 and ineligible for the incomerelated insurance (voluntary program).

Note: Union members are usually covered by unemployment

insurance funds. All funds must be open to voluntary

affiliation for any employee in the branch of work or field of

activity concerned. Approximately 80% of all employees

belong to the unemployment insurance funds.

Source of Funds

Insured person: For the voluntary program, the insured pays

a membership fee of approximately 100 to 150 kronor a

month, according to the fund (covers about 7% of the cost);

for the basic program there is no membership fee.

Employer: Unemployment insurance is financed by

employers out of a labor market contribution calculated as a

percentage of the payroll.

Government: None.

Qualifying Conditions

Unemployment benefits: Unemployed and registered as a

jobseeker at the public employment service and able and

willing to accept a suitable job for at least 3 hours per day and

at an average of 17 hours per week. Unemployment due to

voluntary leaving, misconduct, or the refusal of a suitable job

or training results in suspension for 20 to 60 benefit days.

The worker must have been employed for a minimum of

6 months (at least 70 hours per month) or for at least

450 hours during a continuous 6-month period during the last

12 months prior to unemployment. Membership in an

unemployment fund for 12 months.

Basic unemployment benefit is available to a student who

does not fulfill the principal qualifying conditions (above),

who has finished at least 1 year of full-time study, and who

has been registered as a jobseeker for at least 90 days within

10 months of the studies having ended.

Unemployment Benefits

Basic unemployment benefit: The maximum benefit is

320 kronor a day. The benefit is payable for up to 300 days

per benefit period. The benefit is paid for 5 days a week.

Voluntary income-related benefit: 80% of previous income.

The maximum benefit is 730 kronor a day for the first

100 days of a benefit period; thereafter, 680 kronor a day.

The benefit is payable for up to 300 days per benefit period.

The benefit is paid for 5 days a week.

Unemployment benefits are subject to taxation.

Benefit adjustment: The minimum level (basic

unemployment benefit) and maximum levels are adjusted by

parliament on an ad hoc basis. Adjustments are not linked

directly to a price or salary index.

Administrative Organization

Supervised by the Swedish Unemployment Insurance Board,

there are 38 unemployment insurance funds in operation.

Family Allowances

Regulatory Framework

First laws: 1947 (child allowance) and 1964 (maintenance

advance).

Current laws: 1947 (child allowance) and 1996

(maintenance support).

Type of program: Universal system.

Coverage

Child allowance: All residents with one or more children.

Maintenance support: Children under age 18 (age 20 if a

student) living permanently with one parent. The parent does

not provide the child with support corresponding to the level

of the maintenance support.

For parental insurance benefits, see Sickness and Maternity,

above.

Source of Funds

Insured person: None.

Employer: None.

Government: Total cost. (The cost of maintenance support

is partly covered by repayments made by parents liable for

maintenance.)

Qualifying Conditions

Child allowance: The child must be under age 16 (under

age 20 if a student; age 23 if attending a school for children

with learning difficulties).

Maintenance support: The child must be under age 18

(age 20 if a student until June of the relevant year) and must

live permanently with only one of the parents. In case of

alternating residence, make-up maintenance support can be

paid to the parent with legal custody of the child.

Family Allowance Benefits

Child allowance: 950 kronor per child each month.

Supplements are payable to families with three or more

children.

Maintenance support: Full maintenance support is

1,173 kronor per child each month. If the child has income

above a maximum, the maintenance support is reduced by half

the surplus amount. Make-up maintenance support is paid in

cases in which the parent liable for maintenance pays a certain

amount directly to the child on time.
222 ♦ SSPTW: Europe, 2004

Sweden

Benefit adjustment: Benefits are adjusted by parliament on an

ad hoc basis. Adjustments are not linked directly to a price or

salary index.

Administrative Organization

National Social Insurance Board provides central administration and supervision.

Regional and local social insurance offices administer the

program.
SSPTW: Europe, 2004 ♦ 223

Switzerland

Switzerland

Exchange rate: US$1.00 equals 1.27 francs.

Old Age, Disability, and Survivors

Regulatory Framework

First and current laws: 1946 (old-age and survivor pensions),

1959 (disability pensions), 1982 (occupational pensions), and

2000 (social insurance).

Type of program: Social insurance and mandatory

occupational pension system.

Coverage

Base pension: All persons resident in Switzerland or those

who are gainfully employed there.

Voluntary insurance for Swiss citizens and citizens of European

Union (EU) countries who live in a non-EU country if they

have previously been compulsorily insured in Switzerland for

at least 5 years without interruption.

Mandatory occupational pension: Employees whose annual

earnings exceed 25,320 francs with the same employer.

Persons who were unemployed as of July 1, 1997, are insured

for disability and survivor benefits.

Voluntary insurance for self-employed persons who are not

eligible for mandatory insurance.

Source of Funds

Insured person

Base pension: 4.2% of earnings (old-age and survivors) and

0.7% of earnings (disability).

There are no maximum earnings for contribution purposes for

the base pension.

Mandatory occupational pension: Depending on age and

gender, contributions vary from 7% to 18% of income

between 25,320 francs and 75,960 francs.

Self-employed

Base pension: 7.8% of income (old-age and survivors) and

1.4% of income (disability). Contributions vary according to

a decreasing scale of contributions.

There are no maximum earnings for contribution purposes for

the base pension.

Mandatory occupational pension: Voluntary contributions.

Employer

Base pension: 4.2% of payroll (old-age and survivors) and

0.7% of payroll (disability).

There are no maximum earnings for contribution purposes for

the base pension.

Mandatory occupational pension: The contribution is at least

equal to the employee’s contribution.

Government

Base pension: Annual subsidies to the social insurance

system cover about 20% of the cost of old-age benefits

(16.36% from federal government and 3.64% from cantons)

and 50% of the cost of disability benefits (75% from federal

government and 25% from cantons).

There are no maximum earnings for contribution purposes for

the base pension.

Mandatory occupational pension: None.

Qualifying Conditions

Old-age pension

Base pension: Age 65 (men) or age 63 (women). The age

requirement for women will be 64 in 2005. A full pension

requires that contributions be made in all years from age 21.

Partial pension: A partial pension is payable for an

incomplete insurance period. A minimum of 1 year’s

contributions is required for a pension.

Special pension: For Swiss nationals who do not meet the

required minimum contribution period for an old-age base

pension.

Mandatory occupational pension: Age 65 (men) or age 62

(women). Women can remain in the occupational scheme

until they reach the base scheme retirement age if they fulfill

the eligibility conditions for a base pension.

Disability pension

Base pension: Must be assessed as at least 40% disabled. To

receive a full pension, the insured must have made

contributions in all years from age 21.

Partial pension: A partial pension is paid for an incomplete

insurance period. A minimum of 1 year’s contributions is

required for a pension.

Special pension: For Swiss nationals who do not meet the

required minimum contribution period for a disability base

pension.

Mandatory occupational pension: Must be assessed as at least

50% disabled.

Survivor pension

Base pension: For a full widow(er) pension, the insured must

have contributed in all years from age 21. The insured had a

minimum of 1 year’s contributions.

Special pension: For a Swiss national whose spouse did not

meet the required minimum contribution period for a base

pension.

Mandatory occupational pension: A pension is paid if the

widow has children or if the widow is aged 45 or older and the

marriage had lasted for at least 5 years.
224 ♦ SSPTW: Europe, 2004

Switzerland

Orphan’s pension (mandatory occupational pension): Paid to

orphans younger than age 18 (age 25 if a student).

Old-Age Benefits

Old-age pension

Base pension: If average annual income is less than or equal

to 37,080 francs, the pension is a flat-rate amount of

9,146 francs a year plus a variable amount calculated by

multiplying annual income by 13/600; if average annual income

is above 37,080 francs, a flat-rate amount of 12,854 francs a

year plus a variable amount calculated by multiplying average

annual income by 8/600.

The minimum old-age base pension is 1,030 francs a month.

The maximum old-age base pension is 2,060 francs a month.

The combined individual pensions of a couple cannot exceed

150% of the maximum old-age base pension (3,090 francs a

month).

Partial pension: A percentage of the full pension according to

the relationship between the insured’s number of years of

contributions and the number of years of contributions of

others in the insured’s age group.

Dependent supplement: 40% of the insured’s pension is paid

for each child under age 18 (age 25 if a student).

Special pension (old age): The pension is equal to the

minimum old-age base pension.

Benefit adjustment: Adjusted every 2 years for changes in

prices and wages.

Mandatory occupational pension: An annual payment equal to

7.2% of the accumulated funds in the personal account, with

interest.

Benefit adjustment: Adjusted for price increases within the

limit of the insurance institution’s financial capacity.

Permanent Disability Benefits

Disability pension

Base pension: If average annual income is less than or equal

to 37,080 francs, the pension is a flat-rate amount of

9,146 francs a year plus a variable amount calculated by

multiplying annual income by 13/600; if average annual

income is above 37,080 francs, a flat-rate amount of

12,854 francs a year plus a variable amount calculated by

multiplying average annual income by 8/600. The full

pension is paid if the insured is assessed as at least 70%

disabled; three-quarter pension if at least 60%; half pension if

at least 50% disabled; one-quarter pension if at least 40%

disabled.

Partial pension: The percentage of the full pension payable is

determined according to the relationship between the

insured’s number of years of contributions and the number of

years of contributions of those in the insured’s age group.

Dependent supplement: A child under age 18 (age 25 if a

student) receives 40% of the pension.

Special pension (disability): The pension is equal to the

minimum disability base pension.

Benefit adjustment: Adjusted every 2 years for changes in

prices and wages.

Mandatory occupational pension: The annual pension is equal

to 7.2% of the funds that would have been accumulated at

retirement age. The full pension is paid if the insured is

assessed as at least 2/3 disabled; half pension if at least 50%

disabled.

Benefit adjustment: Benefits that have been paid for more than

3 years are adjusted for price increases (at the same time as

adjustments to the base pension).

Survivor Benefits

Survivor pension

Base pension (widow(er)): 80% of the insured’s pension is

payable to a widow caring for a child; to a widow aged 45 or

older who was married for at least 5 years; regardless of age

to a widower caring for a child under age 18.

The minimum monthly benefit is 824 francs.

The maximum monthly benefit is 1,648 francs.

Base pension (orphan): 40% of the insured’s pension for each

orphan under age 18 (age 25 if a student); 40% for a full

orphan, but not more than 60% of the maximum old-age

pension.

Special pension (survivor): The pension is equal to the

minimum survivor base pension.

Benefit adjustment: Adjusted every 2 years for changes in

prices and wages.

Mandatory occupational pension (widow): 60% of the insured’s

full pension.

Mandatory occupational pension (orphan): 20% of the

insured’s full pension for each orphan.

Benefit adjustment: Benefits that have been paid for more

than 3 years are adjusted for price increases (at the same time

as adjustments to the base pension).

Administrative Organization

Base pension

Federal Department of Interior provides general supervision.

Federal Social Insurance Office supervises implementation.

Decentralized network of cantonal, industrial, and federal

compensation funds is responsible for the collection and

recording of contributions and the payment of pensions.

Central compensation office maintains a register of all

insured persons and pensioners.

Mandatory occupational pension

Federal Social Insurance Office and cantons provide general

supervision.
SSPTW: Europe, 2004 ♦ 225

Switzerland

Registered occupational pension institutes administer the

program (in 1998 there were 10,409 institutes).

Sickness and Maternity

Regulatory Framework

First law: 1911.

Current laws: 1994 (sickness insurance) and 2000 (social

insurance).

Type of program: Mandatory (medical care) and voluntary

(cash benefits) private insurance system.

Coverage

Cash benefits: All persons resident in Switzerland involved

in gainful activity and older than age 15 but younger than

age 65 can buy insurance providing daily allowances.

Medical care: All persons resident in Switzerland.

Source of Funds

Insured person

Cash benefits: Premiums vary depending on the fund,

benefits provided for the insured, age at the date of entry, and

the region.

Medical care: A single premium for funds in the same region.

Employer

Cash benefits: Contributions are not required by law, but

some collective agreements require the employer to share

employees’ membership fees.

Medical care: None.

Government

Cash benefits: None.

Medical care: Federal subsidies to cantons permit reduced

premiums paid by low-income earners. Cantons must provide

minimum additional assistance.

Qualifying Conditions

Cash sickness benefits: The benefit is payable to insured

persons after a 3-day waiting period, unless agreed otherwise.

Cash maternity benefits: Nine months (270 days) of

membership without interruption of more than 3 months.

Sickness and Maternity Benefits

Sickness benefit: The amount of the daily allowance is set

by agreement between the insurer and the insured. The

benefit is payable after a 3-day waiting period, unless agreed

otherwise, for up to at least 720 days in a period of

900 consecutive days.

Maternity benefit: The benefit is payable for up to 16 weeks,

including at least 8 weeks after childbirth.

Workers’ Medical Benefits

A comprehensive list of service benefits is set by law. Funds

can also provide additional benefits through complementary

insurance. There is no time limit on duration.

Cost sharing: The patient pays 100% of costs up to a ceiling

(standard ceiling is 300 francs) and 10% of costs above this

ceiling up to a set annual total. In addition, there is a daily

contribution of 10 francs for hospitalization costs (except for

insured persons who live with at least one member of their

family). There is no cost sharing for maternity care.

Dependents’ Medical Benefits

Medical insurance is individual. Insured persons receive

benefits in their own right.

A comprehensive list of service benefits is set by law. Funds

can also provide additional benefits through complementary

insurance. There is no time limit on duration.

Cost sharing: The patient pays 100% of costs up to a ceiling

(standard ceiling is 300 francs) and 10% of costs above this

ceiling up to a set annual total. In addition, there is a daily

contribution of 10 francs for hospitalization costs (except for

insured persons who live with at least one member of their

family). There is no cost sharing for maternity care.

Administrative Organization

Federal Office of Social Insurance supervises compliance.

Recognized funds and private insurance companies are

authorized to administer and provide health insurance. There

were 108 recognized funds in 2001.

Work Injury

Regulatory Framework

First law: 1911, implemented in 1918.

Current laws: 1981 (injury insurance) and 2000 (social

insurance).

Type of program: Mandatory insurance covering

occupational and nonoccupational accidents and occupational

diseases.

Coverage

All employees.

Voluntary coverage for the self-employed.

If working time does not exceed 8 hours a week, the insurance

covers only work-related injuries (including travel to and from

work).
226 ♦ SSPTW: Europe, 2004

Switzerland

Source of Funds

Insured person

Occupational accidents and diseases: None.

Nonoccupational accidents: Total cost.

Employer

Occupational accidents and diseases: Total cost.

Contribution rates vary from 0.04% to 17.2% of payroll

according to the assessed degree of risk.

The maximum earnings for contribution and benefit purposes

are 106,800 francs a year.

Nonoccupational accidents: None.

Government

Occupational accidents and diseases: None.

Nonoccupational accidents: None.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Benefits are payable for occupational accidents and diseases

and nonoccupational accidents.

Temporary Disability Benefits

80% of earnings if totally disabled. The benefit is payable after

a 3-day waiting period until recovery or certification of

permanent disability.

Partial disability: A reduced benefit is paid if partially

disabled.

Permanent Disability Benefits

Permanent disability pension: 80% of insured earnings if

totally disabled.

Constant-attendance supplement: Two to six times the

maximum insured daily earnings according to the assessed

degree of disability.

Partial disability: A percentage of the full pension according

to the assessed degree of disability.

Lump-sum award: For a permanent injury according to the

schedule in law. The award is paid in addition to the pension.

Benefit adjustment: Pensions are adjusted every 2 years for

changes in the cost-of-living index (at the same time as

adjustments to the old-age base pension).

Workers’ Medical Benefits

Medical, hospital, and pharmaceutical treatment; prostheses

and other necessary care; and travel expenses. There is no

limit on duration.

Survivor Benefits

Survivor pension: 40% of insured earnings is payable to a

widow(er) who has dependent children or is at least 2/3

disabled or to a widow over age 45.

Widow’s settlement: A lump sum is payable to a widow who

is ineligible for a pension. The lump sum varies according to

the duration of the marriage.

Orphan’s pension: 15% of insured earnings is payable for

each orphan under age 18 (age 25 if a student); 25% if a full

orphan.

Other eligible survivors: A surviving divorced spouse

receives up to 20% of insured earnings if he or she had been

eligible for alimony.

The maximum survivor pension is 70% of insured earnings. If

benefits are payable to both the current and the divorced

spouse, the maximum total pension is 90%.

Funeral grant: A lump sum of up to 2,051 francs.

Benefit adjustment: Pensions are adjusted every 2 years for

changes in the cost-of-living index (at the same time as

adjustment to old-age base pension).

Administrative Organization

Federal Social Insurance Office provides general supervision.

Public accident insurance funds and approved sickness

insurance funds manage the program.

Private insurance companies manage the program for

employers who are subject to compulsory insurance.

Swiss National Accident Insurance Fund manages the program

for accidents.

Unemployment

Regulatory Framework

First law: 1924.

Current laws: 1982 (unemployment insurance) and 2000

(social insurance).

Type of program: Social insurance system.

Coverage

Employed persons.

Source of Funds

Insured person: 1% of earnings.

The maximum monthly earnings for contribution and benefit

calculation purposes are 8,900 francs.

Employer: 1% of payroll.

The maximum monthly earnings for contribution and benefit

calculation purposes are 8,900 francs.
SSPTW: Europe, 2004 ♦ 227

Switzerland

Government: Federal government contributes up to 0.15% of

the insured payroll toward the cost of the employment service

and for labor market-related measures. If necessary, the federal

government provides loans at the prevailing market rate.

Qualifying Conditions

Unemployment benefit: The insured must be totally or

partially unemployed, reside in Switzerland, have completed

mandatory schooling, not be in receipt of a basic old-age

pension, have 12 months of contributions in the last 2 years

(waived for certain categories), be able and willing to work,

and satisfy any other necessary requirements.

Unemployment Benefits

80% of insured earnings; 70% if the insured has no dependent

children, is receiving a full daily benefit that exceeds

140 francs, and is not disabled. The benefit is payable after a

5-day waiting period.

The maximum duration of benefits is 400 days with at least

12 months of contributions; 520 days with at least 18 months

of contributions and aged 55 or older (the age condition is

waived if the insured is receiving a basic disability pension or a

mandatory accident insurance disability pension); 260 days for

persons who are not subject to any contribution condition.

Partial unemployment benefit: 80% of lost earnings is paid for

up to 12 months in a 2-year period for a reduction in working

hours; for up to 6 months for a reduction in working hours due

to bad weather.

Administrative Organization

Federal Office of Economy approves and supervises

unemployment funds.

Federal Social Insurance Office supervises contributions.

Cantonal and regional unemployment funds (public funds)

administer the program for cantons or regions. In addition,

some funds administer programs for certain professional

groups.

Regional placement offices assist unemployed persons in

finding employment.

Family Allowances

Regulatory Framework

First and current federal laws: 1952 (agriculture only) and

2000 (social insurance).

First and current cantonal laws: All cantons have laws,

enacted during or after 1943.

Type of program: Employment-related system (in most

cantons) and employment-related and social assistance system

(in five cantons).

Coverage

Federal program covers agricultural employees and small selfemployed farmers whose annual earnings do not exceed a fixed

amount. The beneficiary must have one or more children

(family allowances) or a spouse (housekeeping allowance).

Cantonal programs cover nonagricultural employees with one

or more children. Several cantons also cover some selfemployed persons, including farmers not covered by the

federal program.

Employers usually affiliate with family allowance funds; in

some cantons, employers may guarantee payment.

Special system for civil servants.

Source of Funds

Insured person: None (except in Valais, 0.3% of salary).

Employer

Agricultural employer: 2% of payroll (federal program).

Nonagricultural employer: From 0.1% to 5% of payroll,

according to canton and fund.

Government: Federal and cantonal governments share the

residual cost for agricultural employees and the total cost for

small self-employed farmers (2/3 by the federal government

and 1/3 by cantonal governments).

Qualifying Conditions

Family allowances: In the federal program, the child must be

under age 16 (under age 20 if unable to work and not receiving

a disability pension; under age 25 if an apprentice or a

student). In most cantonal programs, the child must be under

age 16 (under ages 18 to 20 if disabled; under age 25 if an

apprentice or a student).

Birth grants: Some cantons pay birth grants.

Vocational training allowances: Some cantons pay

vocational training allowances. When provided, vocational

training allowances replace family allowances.

Family Allowance Benefits

Family allowances: The federal program pays 170 francs a

month for each of the first two children (190 francs in

mountain regions); 175 francs a month for the third and each

subsequent child (195 francs in mountain regions). In

addition, a household allowance of 100 francs is granted for

each married worker.

The legal minimum allowance in cantonal programs is from

150 francs to 344 francs a month for each child, according to

canton. Funds often pay higher amounts than the legal

minimum.

Birth grants: 600 francs to 1,500 francs, according to canton.
228 ♦ SSPTW: Europe, 2004

Switzerland

Vocational training allowances: 190 francs to 444 francs a

month, according to canton. When provided, vocational

training allowances replace family allowances.

Administrative Organization

Federal program: Cantonal old-age and survivor insurance

funds collect contributions and pay allowances.

Cantonal programs: Supervised by cantonal governments and

administered by numerous public and approved private family

allowance funds.

Employers usually pay allowances directly with wages and

settle the remaining surplus or deficit with the respective

fund.
SSPTW: Europe, 2004 ♦ 229

Ukraine

Ukraine

Exchange rate: US$1.00 equals

5.31 hryvnias (H).

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1922.

Current law: 2003 (Compulsory State Pension Insurance),

implemented in 2004.

Type of program: Social insurance system.

Note: The 2003 law is being implemented in stages. A

supplementary mandatory individual account will be

introduced at a later date and will include additional

contributions by insured persons younger than age 50 (men)

or age 45 (women) at the implementation date.

Coverage

All employees.

Special provisions for victims of the Chernobyl catastrophe.

Source of Funds

Insured person: 1% of earnings up to H149, plus 2% for

earnings of H150 or more.

Employer: 32% of payroll.

Government: Subsidies as needed from central and local

governments.

The maximum monthly earnings for contributions purposes are

H2,660 (June 1, 2003).

Qualifying Conditions

Old-age pension: Age 60 (men) or age 55 (women) with at

least 5 years of covered employment; requirements are reduced

for those who worked for at least 5 years under arduous or

hazardous conditions, for mothers of five or more or disabled

children, for disabled veterans, and for other specified

categories.

In all cases, contributions must be paid for periods of covered

employment. Covered employment can include years spent in

higher education, the armed services, caring for disabled

persons or children under age 3, or being unemployed and

seeking a job, if contributions are paid for these periods.

Partial pension: If the insured has less than 25 years (men) or

20 years (women) of covered employment.

Early pension: An early pension is payable to unemployed

older workers (for men between ages 58 and 6 months and 60

or for women between ages 53 and 6 months and 55) who meet

the requirements for covered employment and who were

working for an enterprise that was liquidated or reorganized.

The early pension ceases if the beneficiary is reemployed.

Deferred pension: A deferred pension is possible.

Carer’s allowance: The monthly allowance is payable to a

carer of a person older than age 80. The carer must not be

employed but may receive an unemployment benefit.

Disability pension: The insured has a minimum of 2 to 5 years

of covered employment, depending on age at the onset of

disability.

Total disability (incapacity for any work): Group I disability,

requiring constant attendance; Group II disability, not

requiring constant attendance.

Partial pension for total disability: If the insured has less than

25 years (men) or 20 years (women) of covered employment.

Partial disability: Group III disability, incapacity for usual work.

Carer’s allowance: The monthly allowance is payable to a

carer of a Group I disabled child under age 16. The carer must

not be employed but may receive an unemployment benefit.

Survivor pension: The insured had up to 5 years of covered

employment. The pension is payable to surviving children

whether or not they were the insured’s dependents and to

nonworking dependents (including the spouse; either parent, if

disabled or of pensionable age; and grandparents, if no other

support is available).

Partial pension: If the deceased had less than 25 years (men)

or 20 years (women) of covered employment.

Funeral grant: Payable for the funeral of an employee, a

student, an unemployed person, or a pensioner.

Social pension: Payable to citizens who are not working and

not eligible for an old-age, disability, or survivor pension.

Old-Age Benefits

Old-age pension: 1% of the wage base for every full year of

covered employment with at least 5 years of covered

employment. The pension is payable monthly.

The minimum pension is H92.45 (20% of the national average

wage for each employment sector).

There is no maximum pension.

The minimum wage is H140 a month.

The wage base is based on 60 months of earnings before June

1, 2000, regardless of interruptions, plus all covered periods

from June 1, 2000.

Partial pension: If the insured has less than 25 years (men) or

20 years (women) of covered employment, the monthly benefit

is reduced in proportion to the number of years below the

required number of years of coverage.

Deferred pension: A supplement of 10% of the pension for

each year worked after entitlement to the full pension. The

maximum pension is 75% of average monthly earnings.

Carer’s allowance: The allowance is payable monthly.
230 ♦ SSPTW: Europe, 2004

Ukraine

Social pension: Paid to a person who has no insurance

coverage. The pension rate varies between H23.30 and H59.

Benefit adjustment: Benefits are adjusted periodically for costof-living changes.

Permanent Disability Benefits

Disability pension: The total disability pension (Group I) is

100% of the old-age pension; Group II, 90%.

Partial pension for total disability: If the insured has

insufficient years of covered employment, the monthly benefit

is reduced in proportion to the number of years below the

required number of years of coverage.

Partial disability (Group III): The monthly pension is equal to

50% of the old-age pension.

Carer’s allowance: The allowance is payable monthly.

Social pension: The pension is between 30% and 200% of the

minimum old-age pension, depending on the assessed degree

of disability.

Benefit adjustment: Benefits are adjusted periodically for costof-living changes.

Survivor Benefits

Survivor pension: The monthly pension is 50% of the

insured’s old-age pension for one dependent; 100% for two

dependents.

The minimum monthly pension is 100% of the minimum old-age

pension.

Partial pension: If the insured had an insufficient period of

covered employment, the monthly benefit is reduced in

proportion to the number of years below the required number

of years of coverage.

Funeral grant: Ten times the minimum wage for the funeral of

an employee, student, or unemployed person; 2 months’

pension or 10 times the minimum wage, whichever is higher, for

the funeral of a pensioner.

Benefit adjustment: Benefits are adjusted periodically for costof-living changes.

Administrative Organization

Ministry of Labor and Social Policy provides general

coordination.

Regional and local social protection departments administer

the program.

Sickness and Maternity

Regulatory Framework

First law: 1912.

Current law: 2001.

Type of program: Social insurance (cash benefits) and

universal (medical care) system.

Coverage

Cash benefits: Employed persons, those on leave to pursue

education and training, those unemployed as a result of

enterprise liquidation, the registered unemployed, and military

personnel.

Medical benefits: All residents. Special provisions for

victims of the Chernobyl catastrophe.

Source of Funds

Insured person: For cash benefits, 0.25% to 0.5% of earnings.

For medical benefits, none; except for voluntary medical

insurance policies.

Self-employed person: 3% of declared income.

Employer: For cash benefits, 2.5% of payroll. For medical

benefits, none.

Government: Total cost of medical benefits. The cost of

universal maternity cash benefits is met by central and local

government budgets.

Qualifying Conditions

Cash and medical benefits: There is no minimum qualifying

period.

Sickness and Maternity Benefits

Sickness benefit: 60% of average gross earnings over the

last 3 months if the insured has less than 5 years of service;

80% with 5 to 8 years of service; 100% with 8 years of service

or more, or for a person injured in the Chernobyl catastrophe, a

person caring for a child injured in the Chernobyl catastrophe,

a veteran of the Second World War, or a surviving spouse of a

war veteran or soldier killed in combat. The benefit is payable

for a maximum of 6 months or until the determination of

permanent disability.

The benefits are payable at 100% of earnings for a working

parent caring for a sick family member for up to 14 days per

case.

Maternity benefit: 100% of earnings is payable to employed

women for 70 days before and 56 days (70 days in the case of a

complicated birth or multiple births) after the expected date of

childbirth; for women on leave from education and training, the

benefit is 100% of the stipend; for women unemployed

because of enterprise liquidation, the benefit is 100% of

earnings received at the last place of work; for those registered

as unemployed for at least 10 months, the benefit is 100% of

the minimum wage.

Benefits to spouses of members of the armed forces are

payable at 100% of earnings plus in-kind benefits.
SSPTW: Europe, 2004 ♦ 231

Ukraine

Care leave: 100% of the minimum wage is paid monthly to

employed women for child care leave until the child is 3 years

old and to women on leave for education and training; 50% of

the minimum wage to eligible unemployed women until the

child is 2 years old (until the child is 3 years old if the family

income satisfies the income test).

Workers’ Medical Benefits

Medical services are provided directly to patients by

government health providers.

Benefits include preventive care, general and specialist

curative care, hospitalization, laboratory services, dental care,

maternity care, and transportation.

Cost sharing: The patient ordinarily pays part of the cost of

appliances. Medicines, if provided with hospitalization, are

free.

Medicines are also free for disabled children under age 16,

children under age 1, and pensioners receiving the minimum

pension.

Care in sanatoria and rest homes, with preference being given

to workers who may pay part of cost.

Dependents’ Medical Benefits

Same as for the household head.

Administrative Organization

Ministry of Labor and Social Policy, Ministry of Finance, and

Social Insurance Fund provide general oversight of the

program for cash benefits.

Ministry of Labor and Social Policy and social protection

departments of local governments administer benefits.

Ministry of Health and health departments of local

governments provide general supervision and coordination for

medical care.

Ministry of Health and local health departments administer the

provision of medical services through clinics, hospitals,

maternity homes, and other facilities.

Work Injury

Regulatory Framework

First law: 1912.

Current laws: 1990 (pensions), 1992 (lump-sum cash

benefits), and 1999 (mandatory social insurance for work injury

and occupational diseases).

Type of program: Social insurance (cash benefits) and

universal (medical benefits) system.

Note: This information is from 2002.

Coverage

Cash benefits: All employees.

Medical benefits: All residents.

Special provisions for victims of the Chernobyl catastrophe.

Source of Funds

Insured person: For cash benefits, see source of funds under

Old Age, Disability, and Survivors, above. For medical

benefits, see medical benefits under Sickness and Maternity,

above.

Employer: For cash benefits, see source of funds under Old

Age, Disability, and Survivors, above. For medical benefits,

see medical benefits under Sickness and Maternity, above.

Government: For cash benefits, see source of funds under

Old Age, Disability, and Survivors, above. For medical

benefits, see medical benefits under Sickness and Maternity,

above.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying

period.

Temporary Disability Benefits

100% of earnings. The benefit is payable from the first day of

incapacity until recovery or until the award of a disability

pension.

Permanent Disability Benefits

Permanent disability pension: Group I total disability

pension (incapacity for any work, requiring constant

attendance), 70% of earnings; Group II total disability pension

(incapacity for any work, not requiring constant attendance),

60% of earnings; Group III (partial disability, incapacity for

usual work), 40% of earnings.

Workers’ Medical Benefits

Medical services are provided directly to patients by

government health providers. Benefits include preventive

care, general and specialist curative care, hospitalization,

laboratory services, dental care, transportation, and the full

cost of appliances and medicines.

Survivor Benefits

Survivor pension: The monthly pension is 30% of the

insured’s wage base for each dependent.

The minimum monthly pension is 100% of the minimum old-age

pension.
232 ♦ SSPTW: Europe, 2004

Ukraine

Funeral grant: Ten times the minimum wage for the funeral of

an employee; 2 months’ pension or 10 times the minimum wage,

whichever is higher, for the funeral of a work injury pensioner.

Administrative Organization

Social Insurance Fund supervises temporary disability

benefits.

Enterprises and employers pay benefits to their own

employees.

Ministry of Labor and Social Policy and social protection

departments of local governments administer benefits.

Ministry of Health and health departments of local

governments provide general supervision and coordination for

medical care.

Ministry of Health and local health departments administer the

provision of medical services through clinics, hospitals,

maternity homes, and other facilities.

Unemployment

Regulatory Framework

First law: 1921.

Current laws: 1991 and 2001.

Type of program: Social insurance system.

Coverage

Working-age citizens.

Special provisions for victims of the Chernobyl catastrophe.

Voluntary affiliation for the self-employed.

Source of Funds

Insured person: 0.5% of earnings.

Employer: 1.9% of payroll.

Government: Subsidies as needed from central and local

governments.

Qualifying Conditions

Unemployment benefit: Registered at an employment office,

able and willing to work, and income does not exceed the

minimum wage. The benefit may be reduced, suspended, or

terminated if the worker is discharged for violating work

discipline, leaving employment without good cause, violating

conditions for job placement or vocational training, or filing a

fraudulent claim.

Unemployment Benefits

Unemployment benefit: With up to 2 years of covered

employment, the benefit is based on 50% of average earnings;

with 2 years to 6 years, 55% of average earnings; with 6 years

to 10 years, 70% of average earnings. For the first 90 calendar

days, 100% of the benefit is payable; 80% for the next 90

calendar days; 70% thereafter. The total duration of payment

is 360 days in a 2-year period. For insured persons within 2

years of retirement, the total duration of payment is 720

calendar days.

The minimum benefit is 23% of the subsistence minimum.

The maximum benefit is equal to the regional average wage in

the previous month.

Unemployment assistance: Payable to unemployed persons

who have exhausted their entitlement to unemployment

benefits if the monthly average income for each family member

does not exceed the established legal minimum. The benefit is

H80 for an active person, H110 for a nonactive person, or H115

for a disabled person. The duration of payment is up to 180

days.

Dependent supplement: Payable to unemployed persons after

360 days of unemployment benefits and 180 days of

unemployment assistance. The supplement is H80 for an

active person, H110 for a nonactive person, or H115 for a

disabled person. The supplement is payable once every 6

months.

Funeral grant: Payable to dependents, family members, or the

person undertaking funeral arrangements. The amount of the

grant equals the subsistence minimum.

Administrative Organization

Ministry of Labor and Social Policy provides general policy

coordination.

Employment Service and its local offices administer the

program.

Family Allowances

Regulatory Framework

First law: 1944.

Current law: 1993.

Type of program: Social insurance and social assistance

system.

Note: This information is from 2002.

Coverage

Families with children.

Special provisions for victims of the Chernobyl catastrophe.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors and Sickness and Maternity, above.
SSPTW: Europe, 2004 ♦ 233

Ukraine

Government: Central and local budget subsidies for

allowances for children of unemployed families and of

nonworking mothers.

Qualifying Conditions

Family allowances: Large families (three or more children),

single mothers with one or more children, and families with one

or more disabled children.

Family Allowance Benefits

Family allowances: For children under age 16 (age 18 if a

student), the allowance is 50% of the minimum wage per child.

For families with three or more children under age 16, the

monthly allowance is equal to 100% of the minimum wage;

families with four or more children, 200% of the minimum wage.

Allowances are income tested.

For single mothers, widow(er)s not receiving a survivor

pension or a social pension, and children whose father has

evaded child support, the allowance is 50% of the minimum

wage for each child under 16 (age 18 if a student). Allowances

are income tested.

For guardians of children under age 16, the allowance is 200%

of the minimum wage. The allowance is income tested.

For carers of disabled children under age 16, the allowance is

100% of the minimum wage.

Birth grant: A lump sum equal to twice the subsistence

minimum for every child; H725 (May 2004).

Administrative Organization

Ministry of Labor and Social Policy and social protection

departments of local governments administer the program for

unemployed families and nonworking mothers.

Employers make payments to employees.
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Exchange rate: US$1.00 equals 0.56 pounds (£).

Old Age, Disability, and Survivors

Regulatory Framework

First laws: 1908 (old-age pension), 1911 (disability insurance),

and 1925 (old-age and survivors’ insurance).

Current laws: 1992 (consolidated legislation), 1995

(pensions), 1999 (welfare reform and pensions), and 2000

(child support, pensions, and social security).

Type of program: Social insurance and social assistance

system.

Coverage

Employed persons aged 16 to 65 (men) or aged 16 to 60

(women) with weekly earnings of at least £77.

Self-employed persons aged 16 to 65 (men) or aged 16 to 60

(women) with annual income of at least £4,095 are covered

for all benefits except the state second pension, work injury

benefits, and contributory jobseeker’s allowance.

Voluntary contributors are covered for the basic State

Retirement Pension and survivor’s benefits only.

Beginning October 2003, the pension credit (means-tested) is

available to all residents aged 60 or older.

Source of Funds

Insured person: 11% of weekly earnings between £89.01 and

£595; certain married women and widows contribute 4.85%,

plus an additional 1% on earnings over £595.

Self-employed person: A flat-rate contribution of £2 a week if

earnings are more than £4,095. In addition, self-employed

persons with annual profits between £4,615 and £30,940 pay

an earnings-related contribution of 8%, plus 1% of any

profits above £30,490.

Voluntary contributor: A flat-rate contribution of £6.95 a

week.

Employer: 12.8% of employee’s earnings over £89 a week.

Government: Total cost of means-tested allowances and

other noncontributory benefits. Also, a treasury grant to

contributory programs up to a maximum of 17% of benefit

expenditure per year to cover shortfalls.

15% of all the above contributions is allocated to the National

Health Service toward the cost of medical benefits.

Qualifying Conditions

Basic state retirement pension (flat rate): Age 65 (men) or

age 60 (women, rising gradually to age 65 from 2010 to

2020) with 50 weeks of paid contributions before April 1975 or

contributions based on earnings of at least 50 times the lower

earnings level in the tax years April 1975 to April 1978. Since

1978, contributions have been based on earnings of 52 times

the lower earnings level. Coverage is required for approximately 90% of the years in the working life (generally 49 years

for men and 44 years for women).

The number of years needed for a full pension is reduced if the

insured is caring for a child or an elderly or disabled relative.

No pension is payable if the insured is entitled to less than

25% of the full pension. Coverage is credited for periods

covered by claims for certain benefits (such as incapacity

benefit and jobseeker’s allowance).

Partial pension: The pension is proportionately reduced with a

shorter coverage period.

Deferred pension: The pension can be deferred until age 70

(men) or age 65 (women), subject to a minimum deferral

period of 7 weeks.

Age addition: Aged 80 or older.

State second pension (S2P): Contributions paid as an

employed person on earnings between the National Insurance

lower and upper earnings level in any tax year from April 1978.

Beginning April 2003, under certain conditions, carers with

earnings below set limits (or no earnings) and people who have

a long-term illness or disability will be credited at a specified

threshold for each year they are caring or receiving an eligible

benefit.

Old-person’s pension (noncontributory retirement

pension): Aged 80 or older and ineligible for the

contributory pension or entitled to a pension of less than

£46.35 a week. Must have been resident in the UK for

10 years in any 20-year consecutive period after age 60.

Pension credit: Men and women aged 60 or older (rising

gradually to age 65 from 2010 to 2020), resident in the UK,

and whose income is below prescribed levels.

Long-term incapacity benefit: Contributions are paid on

earnings of at least 25 times the weekly lower earnings level

in one of the last 3 tax years before the benefit claim year, plus

contributions paid or credited on earnings of at least 50 times

the weekly lower earnings level in both of the last 2 tax years

before the claim starts. The benefit is payable after 52 weeks of

disability (as determined by a medical test); after 28 weeks to

those who are terminally ill or receiving the highest-rate

component of disability living allowance.

Disability living allowance (noncontributory, no means

test): Disabled before age 65 (can be paid beyond age 65).

The allowance is usually paid after 3 months of disability

(except if terminally ill). The amount is determined by care and

mobility needs.

Attendance allowance (noncontributory, no means test):

Disabled at age 65 or older. The allowance is usually paid

after 6 months of disability (except if terminally ill). The

lower or higher allowance rate is determined by care needs.
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Carer’s allowance (noncontributory, no means test): Paid

to a person who forgoes full-time work to care for a severely

disabled person (receiving certain qualifying benefits) for

35 hours or more a week. The carer must be over age 16 and

under age 65 at the time of claim and not be in full-time

education or earning over £77 a week.

Survivor benefits: The deceased met the coverage

requirements for an old-age pension or was a pensioner at the

time of death.

Widowed parent’s allowance: A widowed parent with at least

one dependent child under age 19 for whom he or she

receives child benefit.

Bereavement allowance: A weekly benefit is payable to a

surviving spouse aged 45 or older without dependent children.

The allowance is payable for 52 weeks following the date of

widowhood.

Bereavement payment: A lump sum is payable immediately

to help with costs arising on the death of a spouse.

Guardian’s allowance: For a person raising a full orphan or,

in certain cases, a child with one surviving parent.

Old-Age Benefits

Basic state retirement pension (flat rate): The maximum

pension is £77.45 a week.

Dependent supplement: £46.35 a week for a dependent adult

if the dependent’s earnings from work are below a specified

amount.

Deferred pension: An increment of 0.1428% of the pension

for each week of deferred retirement.

Age addition: £0.25 a week.

State second pension (S2P): The accrual rate applies to

earnings between the lower and upper earnings levels. For

earnings between tax years 1978/1979 and 1987/1988, the

accrual rate is 25%. The accrual rate on earnings after

April 1988 will vary depending on the level and year of

earnings and the date of retirement. The lowest earners will

have the highest accrual rate.

Old-person’s pension (noncontributory retirement

pension): £46.35 a week minus any old-age pension.

Benefit adjustment: Pensions and allowances are increased

annually according to price changes. (The amount of the

increase is calculated according to the retail price index from

the previous September.)

Pension credit: A means-tested benefit is payable depending

on personal circumstances and income (from earnings,

savings, and other pensions). Those entitled are guaranteed

£102.10 a week (single person) or £155.80 a week (couple)

including their other income. Persons aged 65 or older may

receive an additional amount if they have savings or other

nonstate pensions.

Permanent Disability Benefits

Long-term incapacity benefit: The benefit is payable starting

from the 53rd week of incapacity (or starting from the

29th week if terminally ill and disabled for at least 28 weeks)

following the payment of short-term incapacity benefit (see

Sickness and Maternity). The benefit is £72.15 a week, plus

£43.15 a week for a dependent adult caring for the claimant’s

child(ren) subject to certain conditions. A supplement is

payable if the disability began before age 45.

Disability living allowance (noncontributory, no means test):

The care component is £57.20, £38.30, or £15.15 a week

according to needs. The mobility component is £39.95 or

£15.15 a week according to needs.

Attendance allowance (noncontributory, no means test):

£38.30 or £57.20 a week according to needs.

Carer’s allowance (noncontributory, no means test): £43.15

a week plus dependent supplements, if appropriate.

Benefit adjustment: Pensions and allowances are increased

annually according to price changes. (The amount of the

increase is calculated according to the retail price index from

the previous September.)

Survivor Benefits

Widowed parent’s allowance: £77.45 a week.

Bereavement allowance: The amount varies with age at the

date of entitlement or when the widowed parent’s allowance

ends. Aged 55 or older, £77.45 a week; aged 45 to 54, a

percentage of the full rate is paid.

Bereavement payment: A lump sum of £2,000 is payable

immediately to the surviving spouse.

Guardian’s allowance: £11.55 a week per child; reduced to

£9.70 if the higher rate of child benefit is payable for the

child.

Benefit adjustment: Pensions and allowances are increased

annually according to price changes. (The amount of the

increase is calculated according to the retail price index from

the previous September.)

Administrative Organization

The Pension Service (part of the Department for Work and

Pensions) administers the state pension scheme and provides

services and support to pensioners.

Jobcentre Plus (part of the Department for Work and

Pensions) administers benefits for people of working age and

helps them find work.

Inland Revenue is responsible for the administration of the

National Insurance contribution system and for the payment of

tax credits.
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Sickness and Maternity

Regulatory Framework

First law: 1911.

Current laws: 1977 (national health service), 1992

(consolidated legislation), 1994 (incapacity benefit), and

1999 (welfare reform and pensions).

Type of program: Social insurance and social assistance

(cash benefits) system and universal (medical benefits)

system.

Coverage

Short-term incapacity benefit: All employed and selfemployed persons who satisfy certain conditions and are not

eligible for statutory sick pay. The benefit is also payable to

unemployed or nonemployed persons if they satisfy the

necessary contribution conditions.

Statutory sick pay: Paid by the employer to employees with

average weekly earnings of at least £77.

Maternity allowance: All employed and self-employed

persons who satisfy certain conditions and are not eligible for

statutory maternity pay.

Statutory maternity pay: Paid by the employer to women

employees with average weekly earnings of at least £77.

Statutory paternity pay: Paid by the employer to an

employee whose wife or partner is expecting a baby and

whose average weekly earnings are at least £77.

Statutory adoption pay: Paid by the employer to an

employee whose wife or partner is adopting a child and whose

average weekly earnings are at least £77.

Medical benefits: All residents, irrespective of nationality or

the payment of contributions or income tax.

Source of Funds

Insured person: For incapacity benefit and maternity

allowance, see source of funds under Old Age, Disability, and

Survivors, above.

Employer: For incapacity benefit and maternity allowance,

see source of funds under Old Age, Disability, and Survivors,

above. The total cost of statutory sick pay (except for certain

small employers) and 8% of statutory maternity and paternity

pay.

Government: 92% of statutory maternity and paternity pay

(100% in the case of some small employers) and a small

portion of statutory sick pay; most of the cost of medical

benefits (National Health Service). The total cost of meanstested allowances.

Medical benefits are funded mainly from general taxation,

with a small proportion from National Insurance

contributions and patients’ copayments.

Qualifying Conditions

Short-term incapacity benefit: At least 4 consecutive days

of sickness within a period of incapacity for work. Contributions must be paid on earnings of at least 25 times the lower

earnings level in one of the last 3 tax years before the benefit

claim year, plus contributions paid or credited on earnings

equal to at least 50 times the weekly lower earnings level in

both of the last 2 tax years before the claim starts.

Young people incapacitated before age 20 (age 25 if they have

been in education or training) may be able to receive

incapacity benefit without satisfying the contribution

conditions.

Statutory sick pay: At least 4 consecutive days of sickness

within a period of incapacity for work. Paid to employees

under age 65 with average weekly earnings of at least £77.

Maternity allowance: All employed and self-employed

persons must have worked for at least 26 weeks in the 66-

week period before the expected week of childbirth and have

average weekly earnings of at least £30 in a 13-week period.

The insured must not be receiving statutory maternity pay

from an employer.

Statutory maternity pay: Employed continuously for at least

26 weeks by the same employer up to and including the 15th

week before expected week of childbirth and has average

weekly earnings of at least £77.

Statutory paternity pay: Employed continuously for at least

26 weeks by the same employer up to and including the 15th

week before the expected week of childbirth.

Statutory adoption pay: Employed continuously for at least

26 weeks by the same employer up to the week of adoption.

Medical benefits: There is no minimum qualifying period.

Sickness and Maternity Benefits

Short-term incapacity benefit: The benefit is paid at a lower

and a higher rate. The lower rate is payable for up to

28 weeks at £54.40 a week, plus £33.65 a week for a

dependent adult. The lower-rate benefit is payable after a 3-

day waiting period. The higher rate is payable from week 29

to week 52 at £64.35 a week, plus £33.65 a week for a

dependent adult.

Statutory sick pay: £64.35 a week is payable for up to

28 weeks of incapacity after a 3-day waiting period.

Maternity allowance: The allowance is paid for up to

26 weeks. The 26 weeks may start at any time from the

15th week before the expected date of childbirth to the week

following childbirth. The standard rate is £100; 90% of average

weekly earnings if earnings are less than £100.

Statutory maternity pay: The benefit is payable for a total of

26 weeks. The first 6 weeks are paid at 90% of average

earnings. The remaining 20 weeks are paid at £100 a week;

90% of average weekly earnings if earnings are less than £100.
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Statutory paternity pay: Paid by the employer for 1 or

2 weeks (as chosen by the employee) at £100 a week; 90% of

average weekly earnings if earnings are less than £100.

Statutory adoption pay: Paid by the employer for up to

26 weeks at £100 a week; 90% of average weekly earnings if

earnings are less than £100.

Workers’ Medical Benefits

Medical services are provided by public hospitals and by

doctors and dentists under contract with, and paid directly by,

the National Health Service. Benefits include general

practitioner care, specialist services, hospitalization, maternity

care, dental care, medicines, appliances, home nursing, and

family planning.

Cost sharing: Patients pay 80% of the cost of any dental work

up to £372. Patients pay £6.30 for each prescription. Those

receiving means-tested benefits and their adult dependents,

children under age 16 (under age 19 if a student), pregnant

women, and nursing mothers are exempt from dental and

prescription charges. People over the state pension age and

certain other groups are exempt from prescription charges.

Exemption is also available to others with low income under the

National Health Service Low Income Scheme.

There is no limit on duration of benefits.

Dependents’ Medical Benefits

Same as for the family head.

Administrative Organization

Jobcentre Plus (part of the Department for Work and Pensions)

administers cash benefits for people of working age and helps

them find work.

Department of Health administers medical benefits and

services through the National Health Service.

Work Injury

Regulatory Framework

First law: 1897.

Current law: 1992 (consolidated legislation).

Type of program: Social insurance and social assistance

system.

Coverage

Employed persons.

Exclusion: Self-employed persons.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: See source of funds under Old Age, Disability,

and Survivors, above.

Qualifying Conditions

Industrial injuries disablement benefit: The insured must be

employed by an employer at the time of an accident that occurs

in the course of employment. The degree of disability, which

must be over 14%, is assessed by medical examination. In the

case of an industrial disease, the insured must have contracted

a prescribed disease during the course of employment.

Temporary Disability Benefits

In the first instance, the benefit is payable for 52 weeks. The

benefit is first payable after a 3-day waiting period for up to

28 weeks at £54.40 a week, plus £33.65 a week for a

dependent adult. From week 29 to week 52, the benefit is

£64.35 a week, plus £33.65 a week for a dependent adult.

Beginning the 53rd week of incapacity (or starting from the

29th week if terminally ill and disabled for at least 28 weeks),

the benefit is £72.15 a week, plus £43.15 a week for a

dependent adult caring for the claimant’s child(ren) subject to

certain conditions. A supplement is payable if the disability

began before age 45.

Benefit adjustment: Pensions and allowances are increased

annually according to price changes. (The amount of the

increase is calculated according to the retail price index from

the previous September.)

Income support (social assistance): Payable when income is

below certain levels. The amount depends on income and

circumstances. Income support is not payable if savings

exceed £8,000 or if the person is working more than

16 hours a week.

Permanent Disability Benefits

Industrial injuries disablement benefit: If assessed as 100%

disabled, £116.80 a week is payable from the 15th week after

the accident or the onset of the disease.

Reduced earnings allowance: Only payable for an

occupational accident or disease occurring before

October 1990. Up to £46.72 a week is paid if assessed as at

least 1% disabled and unable to do the same job, resulting in

loss of earnings.

Constant-attendance allowance: Payable if assessed as 100%

disabled; £23.40 or £46.80 a week depending on need;

£70.20 or £93.60 a week if needs are greater.
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Exceptionally severe disablement allowance: £46.80 a week if

receiving the top two rates of constant-attendance allowance.

Partial disability: From £23.36 a week for an assessed degree of

disability of 20% to £105.12 a week for an assessed degree of

disability of 90%.

Workers’ Medical Benefits

Provided under the National Health Service.

Survivor Benefits

Widowed parent’s allowance: £77.45 a week, paid to a

widowed parent with at least one dependent child under age 19

for whom he or she receives child benefit.

Bereavement allowance: The amount varies with age at the

date of entitlement or when the widowed parent’s allowance

ends. Aged 55 or older, £77.45 a week; aged 45 to 54, a

percentage of the full rate is paid.

Bereavement payment: A lump-sum payment of £2,000 is

payable immediately to help with costs arising on the death of

a spouse.

Guardian’s allowance: £11.55 a week per child; reduced to

£9.70 if the higher rate of child benefit is payable for the

child.

Benefit adjustment: Pensions and allowances are increased

annually according to price changes. (The amount of the

increase is calculated according to the retail price index from

the previous September.)

Administrative Organization

Jobcentre Plus (part of the Department for Work and

Pensions) administers cash benefits for people of working

age and helps them find work.

Unemployment

Regulatory Framework

First law: 1911.

Current law: 1995 (jobseekers).

Type of program: Social insurance and social assistance

system.

Coverage

All unemployed jobseekers meeting the entitlement

conditions.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: See source of funds under Old Age, Disability,

and Survivors, above. The total cost of means-tested

allowances after a 3-day waiting period (30 days for the

voluntarily insured) for 26 weeks.

Qualifying Conditions

Jobseeker’s allowance (social insurance): Must be aged 18

or older and out of work or working less than 16 hours a week

(if aged 16 or 17, may qualify only under specified

conditions). Contributions must have been paid on earnings

of at least 25 times the lower earnings level in one of the last

2 complete tax years (April to March) before the start of the

benefit year (January to December) in which the claim is made,

and contributions must have been paid or credited on earnings

of at least 50 times the weekly lower earnings level in both the

appropriate tax years. Earnings must not be higher than the

prescribed amount.

Must be registered at a job center and be capable of, available

for, and actively seeking employment and must also have a

current jobseeker’s agreement.

Jobseeker’s allowance (social assistance): Paid if the

person has no income or an income that does not exceed the

applicable amount. The person has no entitlement to the

jobseeker’s allowance (social insurance); the contributory

benefit is insufficient or has expired. The allowance is not

payable if savings exceed £8,000.

Unemployment Benefits

Jobseeker’s allowance (social insurance): A flat-rate

allowance is paid for up to 6 months at £54.65 a week if

aged 25 or older, £43.25 if aged 18 to 24, or £32.90 if under

age 18. The allowance is payable after a 3-day waiting period.

Jobseeker’s allowance (social assistance): The amount of

the allowance depends on age and on household income and

composition. A single person receives between £32.90 and

£54.65 a week depending on age.

Administrative Organization

Jobcentre Plus (part of the Department for Work and

Pensions) administers cash benefits for people of working

age and helps them find work.

Family Allowances

Regulatory Framework

First law: 1945 (child benefit).

Current laws: 1992 (consolidated legislation) and 2002 (tax

credits).

Type of program: Universal (child benefit) and tax credits

system.
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Coverage

Child benefit and child tax credit: Residents with one or

more children.

Working tax credit: Low-income workers with or without

children.

Source of Funds

Insured person: None.

Employer: None.

Government: Total cost.

Qualifying Conditions

Child benefit and child tax credit: Child must be under

age 16 (under age 19 if a student). Eligibility is also dependent

on residence and presence in the UK.

Working tax credit: Working for at least 16 hours a week.

Family Allowance Benefits

Child benefit: £16.05 a week for the eldest qualifying child and

£10.75 for each additional child.

Child tax credit: The credit depends on parents’ income. The

minimum credit of £10.40 a week is paid if gross income is

below £50,000. Higher amounts are payable for lower levels

of income and if there is more than one qualifying child. The

credit is paid in addition to child benefit and working tax

credit.

Working tax credit: The credit depends on income and family

status and can include approved childcare costs.

Administrative Organization

Inland Revenue administers the child benefit and tax credits.