of a Self-employed Person Adriana Járošiová & Marianna Csetnekyová Social Protection of a Self-employed Person Adriana Járošiová & Marianna Csetnekyová Ministry of Labour, Social Affairs and Family of the Slovak Republic MISSOC Network Meeting, Bratislava, 10-11 November 2016

self-employed person Who is considered a Self-employed Person? an entrepreneur who conducts business as a natural person (individual), i.e. in his/her own name and on his/her own responsibility For the purposes of social and public health insurance, a self-employed person is one of the possible types of contribution payers. Who provides social and public health insurance to a Self-employed person? social insurance → Sociálna poisťovňa (Social Insurance Agency) health insurance → Všeobecná zdravotná poisťovňa, a.s.; Union zdravotná poisťovňa, a.s.; Dôvera zdravotná poisťovňa, a.s. MISSOC Network Meeting, Bratislava, 10-11 November 2016 MISSOC Network Meeting, Bratislava, 10-11 November 2016

of a Self-employed Person Social INSURANCE of a Self-employed Person Definition of the self-employed person for the purposes of social insurance a person who has reached 18 years of age and  generated income from business and other self-employment in the previous calendar year Scope of social insurance sickness insurance pension insurance MISSOC Network Meeting, Bratislava, 10-11 November 2016 MISSOC Network Meeting, Bratislava, 10-11 November 2016

Inception of sickness and pension insurance as of 1 July of the calendar year following the calendar year for which the income from business and other self-employment was higher than the statutory limit (12 times the amount of the minimum assessment base) Cessation of sickness and pension insurance as of 30 July of the calendar year following the calendar year for which the income from business and other self-employment was not higher than the statutory limit (12 times the amount of the minimum assessment base) as of the date of termination of the licence to conduct business as of the date from which a self-employed person (artist) does not conduct this activity based on his/her affidavit as of the date of death or when pronounced dead MISSOC Network Meeting, Bratislava, 10-11 November 2016 MISSOC Network Meeting, Bratislava, 10-11 November 2016

Obligations of the Social Insurance Agency as of 1 January 2015 the Social Insurance Agency notifies in writing a self- employed person of both the inception and cessation of social insurance, the assessment base, the amount of his/her social insurance contribution, due date of the social insurance contribution, and data relating to the payment of the social insurance contribution to refund social insurance contributions to a self-employed person who paid them on no legal grounds MISSOC Network Meeting, Bratislava, 10-11 November 2016 MISSOC Network Meeting, Bratislava, 10-11 November 2016

Obligations of a self-employed person to notify the Social Insurance Agency of the change of name, surname, permanent residence, and cancellation of the permit for permanent residence or the permit for temporary residence and interruption of sickness and pension insurance income and expenditure of a self-employed person, commencement and termination of the licence to conduct business of a self-employed person, or to make an affidavit of the commencement and termination of conduct of business activity which he/she conducts without licence – applicable to foreign self-employed persons These obligations are completed in a form the contents of which are determined by the Social Insurance Agency. to pay social insurance contributions – by wire transfer, money order or in cash at the Social Insurance Agency; to identify payments MISSOC Network Meeting, Bratislava, 10-11 November 2016 MISSOC Network Meeting, Bratislava, 10-11 November 2016

Rates of contributions to social insurance to sickness insurance: 4.4 % of the assessment base to pension insurance, i.e. to old-age insurance: 18 % of the assessment base disability insurance:6 % of the assessment base to the Reserve Fund of Solidarity: 4.75 % of the assessment base   MISSOC Network Meeting, Bratislava, 10-11 November 2016 MISSOC Network Meeting, Bratislava, 10-11 November 2016

Exemptions from the payment of social insurance contributions contributions to disability insurance are not paid by a self-employed person who is entitled to old-age pension or early old-age pension, or who is a recipient of pension for years of service and has reached the retirement age in the period during which he/she receives maternity benefits in the period of personal and all-day care for a relative in the period during which a self-employed person is recognised as temporarily incapable to work or is under orders to comply with quarantine measure MISSOC Network Meeting, Bratislava, 10-11 November 2016 MISSOC Network Meeting, Bratislava, 10-11 November 2016

Assessment base The assessment base of a self-employed person is determined as follows: Partial tax base: coefficient of 1.486 : 12 In this calculation, the partial tax base is not reduced by the contributions paid to compulsory public health insurance and contributions to compulsory social insurance of a self-employed person. MISSOC Network Meeting, Bratislava, 10-11 November 2016 MISSOC Network Meeting, Bratislava, 10-11 November 2016

Compulsory Public Health Insurance of a Self-employed Person Definition of the self-employed person for the purposes of health insurance a person who has reached 18 years of age and  who is authorised to conduct or operate a business activity which leads to generating income from business and other self-employment. Inception of health insurance Unless a natural person has been involved in the health insurance system (e.g. unless such person is a permanent resident in the Slovak Republic) the involvement in the Slovak public health insurance system starts as of the date of commencement of self-employment in the Slovak Republic MISSOC Network Meeting, Bratislava, 10-11 November 2016 MISSOC Network Meeting, Bratislava, 10-11 November 2016

Obligations of a self-employed person reporting of insurance contributions payment of insurance contributions Rates of contributions to health insurance 14 % of the assessment base in case of a person with disabilities: 7 % of the assessment base MISSOC Network Meeting, Bratislava, 10-11 November 2016 MISSOC Network Meeting, Bratislava, 10-11 November 2016

Assessment base of a self-employed person assessment base amounts to the ratio of the tax base on personal income from the self- employed person’s business, generated in the decisive period which is not reduced by the contributions paid to compulsory public health insurance, contributions paid to compulsory sickness insurance, contributions paid to compulsory pension insurance and compulsory contributions paid to old-age pension saving which are paid along with contributions to compulsory pension insurance, contributions paid to the Reserve Fund of Solidarity of a self-employed person with compulsory pension insurance, and the coefficient of 1.486 Determination of the amount of health insurance contributions by the amount of income the minimum amount of an advance payment and the minimum amount of an insurance contribution (at least from the base determined as 50% of the average monthly wage applicable two years ago) the maximum amount of an advance payment and the maximum amount of an insurance contribution (at least from the base determined as five times the amount of the average monthly wage applicable two years ago) MISSOC Network Meeting, Bratislava, 10-11 November 2016 MISSOC Network Meeting, Bratislava, 10-11 November 2016

Rights of a self-employed person right to receive health care to the same extent as any other person involved in the Slovak public health insurance system (regardless of the determined amount of contributions to the system – the Slovak health insurance system is designed as a fully solidary system) MISSOC Network Meeting, Bratislava, 10-11 November 2016 MISSOC Network Meeting, Bratislava, 10-11 November 2016

SOCIAL INSURANCE benefits provided under the Social Insurance Act and of a self-employed person Pension insurance - old-age pension, early old-age pension, disability pension, widow’s/widower’s pension, orphan’s pension Sickness insurance - sickness, maternity, nursing, equalization benefits Unemployment insurance - unemployment benefit Accident insurance - accident annuity, lump-sum settlement, work rehabilitation and rehabilitation benefit, job retraining and retraining benefit, reversionary (survivor) accident annuity, lump-sum compensation, compensation for pain and compensation for reduced social opportunities, compensation for funeral expenses Guarantee insurance - guarantee insurance benefit MISSOC Network Meeting, Bratislava, 10-11 November 2016 MISSOC Network Meeting, Bratislava, 10-11 November 2016

Social insurance benefits to which a self-employed person is not entitled Equalisation benefit a sickness benefit paid to female workers during their pregnancy or maternity if they have been reassigned to another job Unemployment benefit exception: possible inception of entitlement to benefit if there was voluntary insurance – only in case of a self-employed person with compulsory sickness and compulsory pension insurance Accident insurance benefits and guarantee insurance benefit employer insurance + Compensation for income in case of temporary incapacity to work a benefit paid by an employer to an employee during no more than the first 10 days of temporary incapacity to work under Act No. 462/2003 Coll. MISSOC Network Meeting, Bratislava, 10-11 November 2016 MISSOC Network Meeting, Bratislava, 10-11 November 2016

SELF-EMPLOYED PERSON VS. AN EMPLOYEE DIFFERENCES MONITORING OF PAYMENT OF INSURANCE CONTRIBUTIONS FOR A SELF-EMPLOYED PERSON Pension benefits – reckoning of a pension insurance period in entitlement to the benefit as of the day the whole outstanding amount of contributions to pension insurance was paid. Sickness benefits – payment requirement shall be deemed fulfilled if the amount outstanding < EUR 5.00. Unemployment benefit – it is reckoned in entitlement to the benefit if the amount outstanding < EUR 5.00 in the period considered. INCEPTION OF ENTITLEMENT TO BENEFIT The first inception of the compulsory pension insurance and compulsory sickness insurance no earlier than 1 July of the following calendar year - coverage through benefits is postponed. The possibility of paying voluntary insurance. MISSOC Network Meeting, Bratislava, 10-11 November 2016 MISSOC Network Meeting, Bratislava, 10-11 November 2016

OLD-AGE PENSIONS EMPLOYEE/SELF-EMPLOYED PERSON Average personal wage point old-age pensions 2015 2014 2013 Employee 0.9865 0.9797 1.0215 Self-employed person 0.8793 0.8626 0.8837 Pension insurance period 2015 2014 2013 Employee 42.24 41.65 41.83 Self-employed person 44.62 43.96 44.18 Average pension 2015 2014 2013 Employee €411.40 €409.80 €390.90 Self-employed person €401.20 €387.10 €378.40 MISSOC Network Meeting, Bratislava, 10-11 November 2016 MISSOC Network Meeting, Bratislava, 10-11 November 2016

IMPORTANT MEASURES 2012 Efforts to raise the level of pension insurance of self-employed persons with compulsory pension insurance - their assessment base for the payment of social insurance contributions which substantially affects the amount of pension was increased (became more realistic). Change of the assessment base and the minimum assessment base from 44.2% to 50% of the average wage applicable two years ago - justified by higher demands of self-employed persons in social insurance. 2015 Minimum pension - improvement of the living standard of pensioners with low pensions so that when retiring as an individual the insured person is not dependent on assistance in material need. The entitlement is granted to an insured person who: - obtains at least 30 qualifying years of pension insurance; - qualifies for, i.e. meets conditions for entitlement to old-age and disability pensions from the compulsory pension system in the Slovak Republic; - reaches retirement age. The basic pension entitlement increases up to the minimum pension amount. In case of 30 qualifying years of pension insurance the minimum pension amounts to EUR 269.50. The average increase in old-age pension or disability pension after reaching the retirement age up to the minimum pension amount was equal to ca. EUR 29.00 as at 31 August 2016. MISSOC Network Meeting, Bratislava, 10-11 November 2016 MISSOC Network Meeting, Bratislava, 10-11 November 2016

SICKNESS INSURANCE BENEFITS EMPLOYEE/SELF-EMPLOYED PERSON 1) Including persons working under work performance agreements and contract works. 2) A self-employed person. The average amounts of the sickness benefits paid to employees are higher than those of the benefits paid to sole traders. The higher level of benefits is mainly caused by a higher assessment base used to calculate the amounts of individual sickness insurance benefits MISSOC Network Meeting, Bratislava, 10-11 November 2016 MISSOC Network Meeting, Bratislava, 10-11 November 2016

SOCIAL PROTECTION OF A SELF-EMPLOYED PERSON AND SOCIAL INSURANCE BENEFITS The principle of equality between self-employed persons and employees - access to benefits Differences in the extent of providing benefits result from the special status of a self-employed person The possibility of optimising taxes and insurance contributions and the impact on providing benefits A self-employed person vs. the state (the degree of responsibility of a self-employed person vs. legislative measures) MISSOC Network Meeting, Bratislava, 10-11 November 2016 MISSOC Network Meeting, Bratislava, 10-11 November 2016

STATE SOCIAL SUPPORT - FAMILY BENEFITS The objective is to financially support parents and contribute to their expenses associated with the birth of a child or more children born simultaneously and with the provision of care for dependent children, their education and nourishment. No exceptions in their application, i. e. meeting the conditions of entitlement (qualifying conditions) applies to any applicant without exception and regardless of his/her social status. The foregoing applies even if a self-employed person is the applicant for the benefit. Families with children are financially supported by the state through the following targeted contributions: Childbirth allowance Allowance for more children born simultaneously Parental allowance Child benefit Supplement to child benefit Childcare allowance Allowances to support alternative child care Maintenance payments Coordination of family benefits MISSOC Network Meeting, Bratislava, 10-11 November 2016 MISSOC Network Meeting, Bratislava, 10-11 November 2016

ASSISTANCE IN MATERIAL NEED additional assistance that may apply after exhausting available system options (from insurance system, within labour claims and maintenance obligations) a procedure similar to the one applied in providing family benefits The Act on Assistance in Material Need allows to provide households in material need with assistance in material need, a special allowance, and a lump-sum benefit. Assistance in material need consists of a social assistance benefit in material need and four allowances: protection allowance, activation allowance, dependent child allowance, and  housing allowance. The social assistance benefit in material need is provided depending on the number and composition of the household members. It is intended to ensure basic living conditions. The social assistance benefit in material need is EUR 61.60 per month if intended for an individual. The provision of assistance in material need and a special allowance falls within the subject- matter competence of offices of labour, social affairs and family. A lump-sum benefit is provided by the competent municipality. MISSOC Network Meeting, Bratislava, 10-11 November 2016 MISSOC Network Meeting, Bratislava, 10-11 November 2016

Thank you for your attention ! Járošiová Adriana adriana.jarosiova@employment.gov.sk and Marianna Csetnekyova marianna.csetnekyova@employment.gov.sk Social Insurance Benefits Department Ministry of Labour, Social Affairs and Family of the Slovak Republic