Farmers Retirement Insurance

Transcription

1 Farmers Retirement Insurance This pension is intended as a replacement for earned income lost due to retirement, dependent on the term and amount of the insurance policy and thus to ensure pensioners livelihoods. The Farmers Retirement Insurance also ensures financial security if income is lost due to illness and for surviving relatives. Certain developments (such as increasing life expectancy while the birthrate declines, as well as, to an extent, retirement below statutory retirement age) have made adjustment of the present pension scheme inevitable, to keep it secure and financeable for the future. Hubert VanRoy Pixelio 57 The pension reforms of the past year were an attempt to curb increase of disbursements by raising the premature pension age, introducing deductions upon premature retirement and extending the timeframe for calculation, among other things.

2 58 The scheme was also made clear and integrative by the pension harmonisation completed in 2005 and the introduction of the pension account. The Austrian General Pensions Act [ Allgemeines Pensionsgesetz APG] created a uniform legal situation valid for all working people born 1 January 1955 or later, thus replacing the pension entitlements historically influenced by professional status. In order to take all times and claim entitlements into consideration, a transitional law was in effect until 31 December 2013 which called for a parallel accounting when calculating pension entitlements; as of 1 January 2014, pension accounts will be the only basis for calculation. The new law does not apply to those born before APG General Pension Act ASVGinsured selfemployed public servant farmer This section provides an overview of the harmonised General Pensions Act (APG), calculation of the pension amount, types of pensions and the particularities for farmers.

3 Austrian General Pensions Act (APG) as of 1 January 2005 The Austrian General Pensions Act (APG), the new harmonised law, applies to all persons born on or after 1 January It entered into force on 1 January 2005, aligned with the principle that all employed persons shall receive a pension in the amount of 80% of their average lifelong income after 45 years of being insured/making contributions, provided that they retire upon attaining the regulated retirement age of 65 years. For this purpose, a personal pension account is set up for every insured person at the Main Association of Austrian Social Insurers which an insured person can read, either in the form of an account notification or online using their citizen card. This account shows the paid-in contributions and the benefit entitlements (credit balances) acquired. 59 All times acquired are included as insured times. There is no longer any distinction between times of compulsory insurance and substitute periods. Insured times include all those which show a contribution basis. A legally fixed contribution basis is applied for times of child-raising, for example. Basically, the general retirement age for all insured persons is 65. As of 1 January 2004, the general retirement age for women will be increased stepwise from 60 to 65 by 31 December In addition, a corridor is being set up which allows retirement as of age 62 (with deductions, however) and later (with supplements).

4 First Account Credit In 2014, the first account credit heralded the transfer of all pension entitlements acquired by 2013 by insured persons born before January 1st, 1955 to their pension accounts. This means that from now on, all insureds born in 1955 or later will be subject to uniform pension calculation. Pension Amounts 60 According to the accumulated times of insurance, a partial credit is deposited in the pension account, thus constantly updating the account. This partial credit is calculated on the basis of the contribution basis founded on the times of insurance multiplied by the account percentage rate of 1.78% as established by law. Upon retirement, the total of all partial credits is used to calculate the aggregate credit; this aggregate credit is then divided by 14, yielding the eventual monthly pension amount.

5 Calculation According to the Old Law All persons born on or before January 31, 1954 will be subject to the old legislation. For pension calculation purposes (assessment basis), the average of the income earned within a certain number of years will be used. The amount of the pension is calculated by multiplying the total assessment basis by a specific percentage rate (augmentation amount). In 2017, the best 29 years (stepwise expansion of the calculation period to 40 years by 2028) are applied to determine the assessment basis augmentation points of the total assessment basis are provided for every 12 insured months. The remaining number of months under 12 are to be aliquoted accordingly. The augmentation amount thus determined and therefore the pension may not exceed 80% of the highest applicable assessment basis. 61 Supplements and Deductions In a case of retirement prior to the general retirement age (60/65), the amount of the pension is to be reduced (deduction). Insured persons who do not claim an old-age pension until they have reached general retirement age receive an increase of 4.2% of the pension for every 12 calendar months of later claim; a maximum amount applies here as well.

6 Details on Types of Pensions in Farmers Retirement Insurance: Insurance Case: Age Old-Age Pension 62 Occurrence of the Insured Event: Men: age 65 Women: age 60 (as of 1 January 2014, stepwise increase to age 65 by 31 December 2033) Prerequisite for entitlement: according to old law: Minimum insurance period: 180 insured months of which at least 84 insured months must have accrued from gainful occupation; according to the old law. 180 insured months in the past 360 calendar months (framework period) prior to the effective date or

7 180 months of contribution to compulsory insurance and/or voluntary insurance or 300 insured months by the effective date, whereby substitute months do not count until 1 January 1956 or later. Corridor Pension Occurrence of the Insured Event: Upon attainment of age 62 Prerequisite for entitlement: of the insured months to be taken into consideration for benefits and no compulsory insurance in the public pension scheme

8 Heavy Labour Pension Occurrence of the Insured Event: Upon attainment of age 60 General Conditions for Entitlement: 540 insured months, of which at least 120 must have been months of heavy labour within the last 240 calendar months prior to the effective date and 64 no compulsory insurance in the public pension scheme Premature Old-age Pension at Long-term Insurance Coverage This type of pension was discontinued on 31 December 2003; it can now only be claimed till 2017 under certain conditions.

9 Insured Event: Incapacity to Work Retirement in Case of Incapacity to Work Incapacity to Work: Incapacity to work applies, if the insured person, as a result of physical or mental illness, is incapable of pursuing a regular self-employed or remunerative occupation (not bound to a specific job). From the age of 60, a higher level of work protection ( Tätigkeitsschutz ) is provided for farmers, too. The age-limit for this enhanced occupational protection measure is being increased stepwise until 2017 to 60 years. This means that a farmer is considered incapable to work, if he/ she, due to physical or mental illness, is incapable of pursuing the job in the entity he/she has pursued during the last 180 calendar months prior to reporting date for a minimum period of 120 calendar months. 65 Occurrence of the Insured Event: Incapacity to work, presumably for six months

10 General Conditions for Entitlement: 180 contributory months of compulsory insurance or voluntary insurance or 300 insurance months (fictitious qualifying months considered only when after January 1, 1956) Prior to the age of 50: 60 insurance months within the last 120 calendar months 66 After having reached the age of 50: From the age of 50, one further insurance month is required for every further month up to a maximum of 180 insurance months. The time frame increases by two calendar months for every further month. Special Conditions for Entitlement: The claimant must neither be entitled to old-age retirement nor to early retirement after an extra-long period of insurance.

11 Insured Event: Death Widow s/widower s Pension or Pension for the Surviving Registered Partner The widow s/widower s pension or pension for the surviving registered partner is equal to between zero and 60 percent of the retirement benefit which was or would have been payable to the deceased. Calculation of the relevant percentage rate is based on the gross income (including supplementary grants, if any) earned by the deceased and the widow/widower or surviving registered partner in the two calendar years preceding death. 67 Orphan s Pension For every child having lost one parent, orphan s pension accounts for 40 percent of the widow s/ widower s pension (assessed with 60 percent) and 60 percent for every child having lost both parents. Orphans are entitled to a pension until the age of 18. After that, such benefits can only be claimed provided that certain conditions are met.

12 Widow s/widower s/surviving Registered Partner s Pension for Continued Operation of the Entity 68 If the survivor continues to run the deceased spouse s or registered partner s business after his/ her death for at least three years (ceases to apply in the case of joint management or pursuance of a regular occupation), insurance periods acquired by the deceased spouse or registered partner under the farmers retirement insurance scheme during the marriage or registered partnership are added to the widow s/widower s/surviving registered partner s insurance periods for the purpose of the widow s/widower s/surviving registered partner s claim to retirement benefits in his/her own right. Adding the insurance periods acquired by the deceased spouse or registered partner is, however, excluded, if widow s/widower s pension or pension for the surviving registered partner is claimed. Additionally, insurance periods will not or just partially be added, if and to the extent, the survivor has acquired insurance periods of his/her own during marriage or registered partnership (child-care periods excepted).

13 Additional Benefits along with the Pension In addition to retirement benefits, the following benefits are payable by the farmers retirement insurance fund: Children s Supplement For each child under the age of 18 or beyond, if certain conditions are met a children s supplement is paid in addition to retirement benefits in their own right. Only one retiree can claim per child. Compensatory Supplement In retirement insurance, there is provision for the recipients of small retirement benefits who have no or little other income, to obtain a compensatory supplement in addition to their retirement benefits (legal residence within Austria). 69 A guideline figure for own-right benefits and for survivors benefits is determined annually which should guarantee a minimum income. If the sum of the benefits, other creditable net income and maintenance benefits (total income) does not amount to this figure, the difference is compensated for by a compensatory supplement. Earnings from a continued agricultural/forestry activity are fed into the computation of net income by way of lump-sum amounts. If an agricultural/forestry entity has already been handed over or leased out, a lump-sum amount (fiktives Ausgedinge/notional lease ~ a flat rate income imputed to retiring farmers upon transfer of their estates) will be credited in the assessment of the compensatory supplement corresponding to the assessed value of the property given

14 away. The compensatory supplement is diminished by this credited amount. In 2016, retired farmers received a compensatory supplement. Compensatory Supplement A Minimum Income Guaranteed compensatory supplement = amount missing to reach guideline figure 70 fiktives Ausgedinge (national lease) other net income (also spouse s) guideline figure = minimum income retirement benefits

15 Care Benefit Care benefit aims at a uniform cash compensation for additional care-related efforts in order to assure as good as possible that those affected will get the required care and help and, thus, enabling them to lead a more independent life geared to their specific needs. Care benefit (available in a graduated scheme, 7 classes) is payable, if the care requirement will presumably persist for at least six months. There is also the possibility of a limited grant of care benefit if at the time of decision (granting or increasing of the benefit) a ceasing of the claim can be expected. In 2016, retired farmers received care benefits. Overview of Care Benefit Classes class Time needed for permanent care care benefit in 1 more than 65 hours per month 157,30 2 more than 95 hours per month 290,00 As a rule, classes 3 and 4 are granted, if the person requiring care is blind, bed-ridden or in constant need of a wheelchair. 3 more than 120 hours per month 451,80 4 more than 160 hours per month 677,60 Classes 5 to 7 are provided for the severely and totally disabled. 5 more than 180 hours per month (+ exceptional level of care required) 920,30 6 more than 180 hours per month and appointments for care-giving activities that are impossible to coordinate, scheduled regularly throughout the day as well as at night, or 1.285,20 permanent presence of a caregiver throughout the day as well as at night due to likelihood of a cared-for person becoming a danger to himself/herself or others 7 more than 180 hours per month and if no focussed movement of all four extremities including functional achievements is possible, or any equivalent condition ,90 71

16 Special Regulations for Farmers Splitting of Retirement Benefits between Spouses/ Registered Partners 72 Half of the own-right retirement benefits payable to the entitled person can, upon application, be paid out to his/her spouse/registered partner, provided that the following conditions are met: The spouse/registered partner must have run or pursued a regular occupation in the agricultural/forestry entity together with the insured person entitled to the retirement benefits on joint account and at joint risk for at least 120 calendar months (in the case of receipt of a work incapacity benefit: 60 calendar months). The spouse/registered partner of the retiree must not pursue any self-employed or remunerative activity, nor must he/she be covered by compulsory insurance in retirement insurance and the spouse/registered partner must not draw retirement benefits of his/her own right. What is being split are the net effective retirement benefits (including children s supplement and, possibly, compensatory supplement). This means that the retirement benefits will be diminished by statutory deductions (e.g.: health insurance contributions) before being split.

17 Retirement Benefits for Women Farmers Since January 1, 1992, both spouses have been able to acquire insurance periods in famers retirement insurance provided that they are jointly managing the entity. Up to this date, only one spouse, in most cases the husband, could do so. SVB The contributions needed hereto are each calculated on the basis of 50 percent of the assessed value of the agricultural/forestry entity to avoid imposing additional financial burden on the farm. 73 This system has the advantage of both spouses eventually being able to acquire retirement claims of their own, which is particularly important if one spouse falls ill. Additionally, this regulation improved the legal status of women farmers.