Social Security Programs Throughout the World: Europe, 2008

 

Poland

Exchange rate: US$1.00 equals 2.45 zlotys.

Old Age, Disability, and Survivors

Regulatory Framework

First laws: 1927 (salaried employees) and 1933 (wage earners).

Current laws: 1990 (farmers); 1997 (pension funds); 1998 (social insurance system), implemented in 1999; 1998 (social insurance fund); 2003 (social pension); and 2004 (individual pension accounts).

Type of program: Notional defined contribution (NDC) social insurance and mandatory individual account system for old-age benefits; social insurance system for disability and survivor benefits.

Note: A system consisting of a modified social insurance first pillar (notional defined contributions) 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.

Voluntary coverage for students, Polish citizens working abroad, persons providing care for a family member, and persons previously covered on a mandatory basis.

Special systems for individual farmers, military personnel, public prosecutors, judges, and police personnel.

Source of Funds

Insured person: 2.46% of covered earnings for the first pillar old-age pension and 7.3% of covered earnings for the second pillar old-age pension (participants in the old system contribute 9.76% of covered earnings for old-age pensions) and 1.5% of covered earnings for disability and survivor pensions.

In addition, pension fund administrators may charge up to a maximum of 7% of contributions, up to 0.54% of assets, and up to an additional 0.06% of assets (depending on fund performance) for annual administrative fees.

The maximum annual earnings for contribution purposes are 30 times the average national monthly earnings set by the budget law (90,981 zlotys in 2008).

Self-employed person: 12.22% of covered earnings for the first pillar old-age pension and 7.3% of covered earnings second pillar old-age pension (participants in the old system contribute 19.52% of covered earnings for old-age pensions) and 1.5% of covered earnings for disability and survivor pensions.

In addition, pension fund administrators may charge up to a maximum of 7% of contributions, up to 0.54% of assets, and up to an additional 0.06% of assets (depending on fund performance) for annual administrative fees.

The minimum income for contribution purposes is equal to 60% of the average national monthly earnings set by the budget law.

The maximum annual income for contribution purposes is equal to 30 times the average national monthly earnings set by the budget law (90,981 zlotys in 2008).

Employer: 9.76% of covered payroll for the first pillar old-age pension and 0% of covered payroll second pillar old-age pension (9.76% of covered payroll on behalf of participants in the old system for old-age pensions) and 6.5% of covered earnings for disability and survivor pensions.

The maximum annual earnings for contribution purposes are equal to 30 times the average national monthly earnings set by the budget law (90,981 zlotys in 2008).

Government: The total cost of the guaranteed minimum pension; pays pension contributions on behalf of insured persons taking child care leave or receiving maternity allowances, for persons receiving unemployment benefits, and for unemployed graduates.

Qualifying Conditions

Old-age pension (old system): Age 65 with at least 25 years of coverage (men) or age 60 with at least 20 years of coverage (women). Noncontributory years must 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, or maritime employment.

The pensionable age is reduced by 5 years for women with at least 30 years of coverage, for war veterans, and for persons assessed as disabled.

Partial pension: A partial pension is paid if the insured does not have the required number of years of coverage at retirement age.

Nursing allowance: Paid to persons aged 75 or older.

Old-age benefits are payable abroad under reciprocal agreement.

Old-age pension (new system): Age 65 with at least 25 years of coverage (men) or age 60 with at least 20 years of coverage (women).

Guaranteed minimum pension: Paid if the total amount of the first- and second-pillar pensions (old-age pension and the annuity from the individual account) is below the legal minimum old-age pension.

Old-age benefits are payable abroad under reciprocal agreement.

Disability pension: Paid for a total disability (incapacity for any work) or partial disability (greatly impaired earning capacity or total incapacity for usual work) with at least 5 years of coverage (1 to 4 years if younger than age 30) during the last 10 years. Noncontributory years must not exceed 1/3 of contributory years. The disability began during the coverage period or within 18 months of the cessation of contributions.

Nursing allowance: Paid to persons certified as disabled.

Training pension: Paid to a person who is no longer capable of work in his or her usual job and is undergoing vocational retraining. The pension is paid for 6 months; may be paid for up to 30 months in certain cases.

Survivor pension: The deceased was a pensioner or had the required number of years of coverage for a disability or old-age pension at the time of death.

Eligible survivors are dependent children younger than 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, incapable of work, rearing a child younger than age 16 (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: The grant is equal to 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): The pension is equal to 24% of national average earnings, plus 1.3% of the insured's earnings times the number of contribution years, and 0.7% of the insured's earning times the number of noncontributory years (for example, for years spent rearing children). Noncontributory years must not exceed 1/3 of contributory years.

The insured's earnings for pension calculation purposes are equal to average monthly earnings in 10 consecutive calendar years chosen by the insured from the 20 years before the year of the claim or in 20 years selected from the total coverage period. Previous earnings are adjusted for inflation.

The maximum monthly earnings for benefit calculation purposes for each contributory year are equal to 250% of the average national monthly earnings in the previous calendar year minus social security contributions. The average national monthly earnings (minus social security contributions) are 2,381.40 zlotys.

The minimum monthly old-age pension is 636.29 zlotys.

Nursing allowance: 163.15 zlotys a month is paid.

Earnings test: The monthly pension is reduced if the insured is younger than the statutory retirement age, is gainfully employed, and receives income that is higher than 70% but lower than 130% of the average national monthly earnings. If the income received exceeds 130% of the average national monthly earnings, the pension is suspended. There is no earnings test after reaching the statutory retirement age.

The average national monthly earnings are 3,032.70 zlotys.

Benefit adjustment: Benefits are adjusted automatically according to price increases when the aggregate growth of the consumer price index exceeds 5%.

Old-age first-pillar pension (new system): The pension is based on the total value of contributions paid to the old-age insurance program (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 the first- and second-pillar pensions (old-age pension and the annuity from the individual account) is less than the legal minimum old-age pension.

Permanent Disability Benefits

Disability pension (old and new systems): If the insured is totally disabled, the pension is calculated as 24% of national average earnings, plus 1.3% of the insured's earnings times the number of contribution years, 0.7% of the insured's earnings times the number of noncontributory years, and 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 the claim up to age 60. Noncontributory years must not exceed 1/3 of contributory years.

The insured's earnings for pension calculation purposes are equal to average monthly earnings in 10 consecutive calendar years chosen by the insured from the 20 years before the year of the claim or in 20 years selected from the total coverage period. Previous earnings are adjusted for inflation.

The maximum monthly earnings for benefit calculation purposes for each contributory year are equal to 250% of the average national monthly earnings. The average national monthly earnings are 3,032.70 zlotys.

Earnings test: The pension is reduced if the insured is younger than the statutory retirement age, is gainfully employed, and receives income that is higher than 70% but lower than 130% of the average national monthly earnings. If the income received exceeds 130% of the average national monthly earnings, the pension is suspended. There is no earnings test after reaching the statutory retirement age.

The monthly minimum pension for a total disability is 636.29 zlotys.

Partial disability pension: The pension is equal to 75% of the benefit paid for a total disability.

The monthly minimum pension for a partial disability is 489.44 zlotys.

Nursing allowance: 163.15 zlotys a month is paid.

Training pension: The pension is calculated on the basis of 75% of the earnings used for calculating the insured's disability pension.

The minimum monthly training pension is equal to 100% of the minimum monthly pension for a partial disability.

Benefits are payable abroad under reciprocal agreement.

Benefit adjustment: Benefits are adjusted automatically according to price increases when the aggregate growth of the consumer price index exceeds 5%.

Survivor Benefits

Survivor pension (old and new systems): The pension varies according to the number of survivors: one survivor receives 85% of the insured's old-age pension; two survivors, 90%; three or more survivors, 95%. If the deceased was not eligible for the old-age pension, the survivor pension is calculated on the basis of the disability pension.

Earnings test: The pension is reduced if the survivor is younger than the statutory retirement age, is gainfully employed, and receives income that is higher than 70% but lower than 130% of average national monthly earnings. If the income received exceeds 130% of average national monthly earnings, the pension is suspended. There is no earnings test after reaching the statutory retirement age.

Full orphan's supplement: 306.65 zlotys a month is paid.

The minimum monthly survivor pension is 639.29 zlotys.

Benefit adjustment: Benefits are adjusted automatically according to price increases when the aggregate growth of the consumer price index exceeds 5%.

Funeral grant: A lump sum equal to twice the average national earnings in force on the day of the insured's death is paid. The grant is 5,799.66 zlotys.

Administrative Organization

Old system: Ministry of Labor and Social Policy (http://www.mps.gov.pl) provides general supervision.

Social Insurance Institute (http://www.zus.pl), with 42 branch offices, administers the 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 laws: 1997 (rehabilitation), 1999 (sickness and maternity), 2003 (health fund), and 2004 (health benefits).

Type of program: Social insurance system.

Coverage

Cash sickness and maternity benefits: All employees.

Voluntary coverage for self-employed persons, artists, and authors.

Medical benefits: All employees, self-employed persons, artists, authors, pensioners, unemployment allowance beneficiaries, persons undergoing professional rehabilitation, students, and the insured's dependent family members.

Voluntary coverage is possible.

Special systems for individual farmers, military personnel, and police personnel.

Source of Funds

Insured person

Cash benefits: 2.45% of gross earnings.

Medical benefits: 8.75% of gross earnings.

There are no maximum earnings for contribution purposes.

Self-employed person

Cash benefits: 2.45% of gross earnings.

Medical benefits: 8.75% of gross earnings.

The minimum earnings for contribution purposes are equal to 60% of the average national monthly earnings set by the budget law.

There are no maximum earnings for contribution purposes.

Employer: None.

Government: Subsidies for medical benefits.

Qualifying Conditions

Cash sickness and maternity benefits: Currently in insured employment with at least 30 days of continuous coverage; 180 days of continuous coverage for the voluntarily insured.

Accidents that occur while commuting to and from work are covered under sickness insurance.

Medical benefits: Must be currently insured or receiving social benefits, including persons in full-time education and unemployed persons.

Sickness and Maternity Benefits

Sickness benefit: The benefit is equal to 80% of average insured earnings (70% in the case of hospitalization) in the 6 months before the incapacity began and is paid for 90 days; thereafter, 100% of earnings. The benefit is equal to 100% of earnings from the first day of incapacity if the incapacity begins during pregnancy or is the result of an accident while commuting to or from work.

The benefit is paid 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 the sickness benefit may be followed by entitlement to the rehabilitation benefit. The benefit is equal to 75% of average insured earnings and is paid for up to 12 months.

Compensatory allowance: Paid to employees to compensate for lost earnings resulting from a loss in working capacity. The insured must undergo vocational rehabilitation for a period of up to 24 months. The benefit is equal to the difference between the insured's average earnings during the last 3 months and the earnings received during vocational rehabilitation.

Maternity benefit: The benefit is equal to 100% of average insured earnings in the last 6 months and is paid for 16 weeks for the birth of the first child; 18 weeks for all subsequent births. For multiple births, the benefit is paid for 26 weeks.

Care allowance: The benefit is equal to 80% of average insured earnings in the last 6 months and is paid for a maximum of 60 days per calendar year if the insured takes leave from work to care for a healthy child younger than age 8 or a sick child younger than age 14. A care allowance may be paid for a maximum of 14 days to care for any other sick family member. The total period of receiving the 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 under contract to the National Health Fund. Benefits include general and specialist care; hospitalization; surgeries specified by the Ministry of Health; laboratory services; dental care, including dental prostheses; ophthalmology and optician services; functional and vocational rehabilitation; free transportation; and basic prescription drugs.

Patients may choose the doctor and hospital.

There is no limit to duration if employed; if employment ceases, coverage continues for 26 weeks (may be extended to 39 weeks).

Cost sharing: There is no cost sharing for basic health care. Government provides a partial subsidy for basic prescription drugs.

Dependents' Medical Benefits

Medical services are provided directly to patients by private health care providers under contract to the National Health Fund. Benefits include general and specialist care; hospitalization; surgeries specified by the Ministry of Health; laboratory services; dental care, including dental prostheses; ophthalmology and optician services; functional and vocational rehabilitation; free transportation; and basic prescription drugs.

Patients may choose the doctor and hospital.

There is no limit to duration if employed; if employment ceases, coverage continues for 26 weeks (may be extended to 39 weeks).

Cost sharing: There is no cost sharing for basic health care. Government provides a partial subsidy for basic prescription drugs.

Administrative Organization

Ministry of Labor and Social Policy (http://www.mps.gov.pl) supervises cash benefits.

Social Insurance Institute (http://www.zus.pl) administers cash benefits.

Ministry of Health (http://www.mz.gov.pl) supervises medical benefits.

National Health Fund (http://www.nfz.gov.pl) administers public health funds and contracts medical services.

Work Injury

Regulatory Framework

First law: 1984.

Current laws: 2002 (cash benefits) and 2004 (health care benefits).

Type of program: Social insurance system.

Coverage

All economically active persons, including self-employed persons.

Special systems for individual farmers, public prosecutors, judges, military personnel, and police personnel.

Source of Funds

Insured person: None.

Self-employed person: 1.93% of earnings.

The minimum earnings for contribution purposes are equal to 60% of the average national monthly earnings set by the budget law.

Employer: From 0.90% to 3.60% 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: The benefit is equal to 100% of average earnings in the 6 months before the disability began and is paid from the first day for up to 26 weeks (may be extended to 39 weeks).

Rehabilitation allowance: If recovery is likely, entitlement to the temporary disability benefit may be followed by entitlement to the rehabilitation allowance. The allowance is equal to 100% of earnings and is paid for up to 12 months.

Permanent Disability Benefits

Permanent disability benefit: If the insured is totally disabled, the benefit is calculated as 24% of the national average earnings, plus 1.3% of the insured's earnings times the number of contribution years, 0.7% of the insured's earnings times the number of noncontributory years, and 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 the claim up to age 60. Noncontributory years must not exceed 1/3 of contributory years.

The insured's earnings for benefit calculation purposes are equal to average monthly earnings in 10 consecutive calendar years chosen by the insured from the 20 years before the year of the claim or in 20 years selected from the total coverage period. Previous earnings are adjusted.

The maximum earnings for benefit calculation purposes are equal to 250% of the average national monthly earnings. The average national monthly earnings are 3,032.70 zlotys.

The minimum benefit must not be lower than 120% of the minimum monthly old-age pension. The minimum monthly old-age pension is 636.29 zlotys.

Earnings test: The benefit is reduced if the insured is younger than the statutory retirement age, is gainfully employed, and receives income that is higher than 70% but lower than 130% of average national monthly earnings. If the income received exceeds 130% of average national monthly earnings, the pension is suspended. There is no earnings test after reaching the statutory retirement age.

Nursing allowance: 163.15 zlotys a month is paid.

Partial disability benefit: The benefit must be equal to at least 60% of the insured's earnings.

The minimum partial disability benefit must not be less than 120% of the minimum monthly old-age pension. The minimum monthly old-age pension is 636.29 zlotys.

Training benefit: The benefit is equal to 100% of the earnings used for calculating the disability benefit and is paid to a person who is no longer capable of work in his or her usual job and is undergoing vocational retraining. The pension is paid for 6 months; may be paid for up to 30 months in certain cases.

The minimum training benefit must not be less than 120% of the minimum monthly old-age pension. The monthly minimum old-age pension is 636.29 zlotys.

Lump-sum benefit: Paid for permanent or long-term health damage as the result of a work injury or an occupational disease. The benefit is equal to 20% of average monthly earnings for each percentage of assessed permanent or long-term health damage. The lump sum is increased by 3.5 times average monthly earnings if the insured person needs the constant attendance of another person.

Workers' Medical Benefits

Medical benefits: All necessary medical care is provided.

The total cost of medical services is met by the National Health Fund.

There is no limit to duration.

Survivor Benefits

Survivor pension: The pension varies according to the number of survivors: one survivor receives 85% of the insured's old-age pension; two survivors, 90%; three or more survivors, 95%.

The minimum benefit must not be less than 120% of the minimum monthly survivor pension paid under Old Age, Disability, and Survivors, above (472.57 zlotys a month).

Eligible survivors are dependent children younger than 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, incapable of work, rearing a child younger than age 16 (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 benefit for family members: The benefit is equal to 18 times the deceased's average monthly earnings for a surviving spouse or the first child, plus 3.5 times the deceased's average monthly earnings for the second and each subsequent survivor; 9 times the deceased's average monthly earnings if there is no surviving spouse or child, plus 3.5 times the deceased's average monthly earnings for the second and each subsequent survivor.

Administrative Organization

Ministry of Labor and Social Policy (http://www.mps.gov.pl) provides general supervision of cash benefits.

Social Insurance Institute (http://www.zus.pl) administers cash benefits.

Ministry of Health (http://www.mz.gov.pl) provides general supervision of medical benefits.

Unemployment

Regulatory Framework

First law: 1924.

Current laws: 2004 (employment promotion) and 2004 (early retirement).

Type of program: Social insurance system.

Coverage

Employed persons.

Source of Funds

Insured person: None.

Self-employed person: Not applicable.

Employer: 2.45% of gross payroll.

There are no maximum earnings for contribution purposes.

Government: Any deficit is met from the state budget.

Qualifying Conditions

Unemployment benefit: The insured must be older than age 18, registered with the employment bureau, able and ready to work, and involuntarily unemployed and must not have received any redundancy pay or compensation. The insured's earnings must have been at least equal to the minimum wage during at least 365 days in the 18-month period before unemployment (periods of military service, parental leave, and receipt of allowances are credited toward the 365-day period).

Preretirement benefit: The insured is unemployed, eligible to receive the unemployment benefit, and aged 63 with at least 25 years of coverage (men) or aged 58 with at least 20 years of coverage (women); involuntarily unemployed and aged 60 with at least 25 years of coverage (men) or aged 55 with at least 20 years of coverage (women); or any age and involuntarily unemployed with at least 40 contributory or noncontributory years of coverage (men) or at least 35 contributory or noncontributory years of coverage (women).

Unemployment Benefits

Unemployment benefit: The benefit is a flat-rate base amount (538.30 zlotys) for those with between 5 and 20 years of employment; 80% of the base amount is paid with less than 5 years; 120% of the base amount is paid with more than 20 years. The benefit is paid for 6 to 18 months, depending on the unemployment rate in the region.

Preretirement benefit: The benefit is equal to 90% of the old-age pension paid at age 65 (men) or age 60 (women).

Administrative Organization

Ministry of Labor and Social Policy (http://www.mps.gov.pl) provides general supervision.

Voivodships (provinces) and local labor bureaus keep registry of unemployed persons and work possibilities and pay benefits.

Social Insurance Institute (http://www.zus.pl) collects payroll contributions from enterprises.

Family Allowances

Regulatory Framework

First law: 1947.

Current law: 2003.

Type of program: Universal system.

Coverage

All persons residing in Poland.

Source of Funds

Insured person: None.

Self-employed person: None.

Employer: None.

Government: The total cost.

Qualifying Conditions

Family allowances (means-tested): The child must be younger than age 18 (age 21 if a full-time student, age 24 with a learning disability). The family's per capita average monthly income must not have exceeded 504 zlotys in the previous calendar year (583 zlotys for families with a disabled child). The allowance is paid to a mother, father, or guardian.

Childbirth supplement (means-tested): The family must be eligible for family allowances. The supplement is paid to a mother, father, or guardian for each child born after April 30, 2004.

Parental leave supplement (means-tested): The family must be eligible for family allowances. The leave period is to provide care for a child younger than age 4 (age 18 if disabled). The supplement is paid 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 the unemployment benefit. The child must be younger than age 7. The supplement is paid 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 younger than age 18 (age 21 if a student, age 24 with a learning disability). The supplement is paid to a mother, father, or guardian.

Education and rehabilitation supplement (means-tested): Paid for up to 12 months to cover part of the cost of the rehabilitation or education of a disabled child younger than age 16 (age 24 if moderately or severely disabled). The supplement is paid to a mother, father, or guardian.

Beginning of school year supplement (means-tested): Paid in September each year for children entitled to family allowances. The supplement is paid to a mother, father, or guardian.

School travel and board supplement (means-tested): Paid for 10 months (from September to June) for 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 paid to a mother, father, or guardian.

Nursing allowance (means-tested): Paid to persons incapable of living independently, disabled children younger than age 16 (age 16 or older 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 cease work to care for a disabled child younger than age 16 or an older, severely disabled person. The supplement is paid to a mother, father, or guardian.

Family Allowance Benefits

Family allowances (means-tested): The amount paid depends on the child's age.

Childbirth supplement (means-tested): A lump sum of 1,000 zlotys is paid for each child.

Parental leave supplement (means-tested): 400 zlotys is paid a month for up to 24 months for one child; 36 months for multiple births; 72 months for a disabled child.

Single parent's young child supplement (means-tested): 400 zlotys a month is paid.

Single parent's child supplement (means-tested): 170 zlotys a month is paid 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): 60 zlotys a month is paid for a child younger than age 5; 80 zlotys for a child aged 5 to 24.

Beginning of school year supplement (means-tested): A lump sum of 100 zlotys is paid.

School travel and board supplement (means-tested): 90 zlotys a month (50 zlotys for children who commute) is paid.

Nursing allowance (means-tested): A lump sum of 153 zlotys is paid.

Nursing benefit (means-tested): 420 zlotys a month is paid.

Administrative Organization

Ministry of Labor and Social Policy (http://www.mps.gov.pl) provides general supervision.

Social Insurance Institute (http://www.zus.pl) and the Agricultural Social Security Fund (http://www.krus.gov.pl) administer the program through 51 branch offices.