Coordination of Social Security Systems

Republic of Serbia Bilateral Screening Chapter 2 Freedom of movement for workers Coordination of Social Security Systems Brussels, 25.3.2014

Coordination of the Social Security in the EU Legal Basis Article 48 TFEU Strongest legal instrument: Regulation (directly applicable) from 1 May 2010: new Regulations 883/2004 (Basic Regulation) and 987/2009 (Implementing Regulation)

Social Security in Serbia The social security in Serbia comprises: 1. Social insurance Pension and disability insurance Health insurance Unemployment insurance 2. Family benefits 3. Social welfare system 3

Social Security Coordination Bilateral agreements on social security First international agreement on social insurance dates back to 1950 (with the French Republic) 28 agreements in force Among them 19 agreements concluded with the EU member states still no agreement with Greece, Latvia, Lithuania, Estonia, Finland, Spain, Portugal, Ireland and Malta 4

Bilateral Agreements in Force Agreements in force: 1. Complete (comprise all branches of social security) 2. Incomplete Agreements based on the following principles: Determination of applicable legislation Maintenance of aquired rights Equal treatment Export of benefits 5

Bilateral Agreements not yet in Force New agreements signed but still not applied: Canada Amended agreements, the application of which has not started yet: Hungary, Luxembourg, Belgium, Romania and Switzerland Negotiations in progress with France, Greece, Russian Federation and Ukraine 6

Administrative Capacities Ministry of Labour, Employment and Social Policy competent authority for pension and disability insurance, unemployment insurance, family benefits and social welfare www.minrzs.gov.rs Ministry of Health competent authority for health insurance www.zdravlje.gov.rs Institute for Social Insurance liaison body for all branches of the social security www.zso.gov.rs Competent Institutions: Republic Fund for Pension and Disability Insurance www.pio.rs Republic Fund for Health Insurance www.rfzo.rs National Employment Office www.nsz.gov.rs 7

Administrative Capacities Implementation of the coordination within the country in cooperation with the competent ministries, the liaison body and the competent institutions Long tradition and rich experience of the competent institutions in the application of the social security agreements Further strengthening of the capacities needed 8

Pension Insurance Pension Insurance Coordination 9

Pension Insurance The Pension system in Serbia comprises: 1. Mandatory pension and disability insurance 2. The system of voluntary pension funds and pension plans 10

History and Legal Basis Beginings of the mandatory pension and disability insurance date back to the second half of the 19th century First comprehensive pension insurance law The Law on Workers Insurance enacted in 1922 Legal basis article 70. of the Constitution of the Republic of Serbia ( Official Gazette of the Republic of Serbia, No. 98/06) 11

Mandatory Pension and Disability Insurance Regulated by the Law on Pension and Disability Insurance ( Official Gazette of the Republic of Serbia, No. 34/03, 64/04, 84/04, 85/05, 101/05, 63/06, 5/09, 107/09, 101/10, 93/12, 62/13 and 108/13) Based on Bismarckian social insurance system Financed on PAYG principle, from contributions paid by insured persons and employers Calculation of the benefits based on point system 12

Insured Persons Mandatory insurance: 1. Employees, comprising civil servants and those employed in army, policy and security agencies 2. Self-employed 3. Farmers 4. Persons included in insurance on a voluntary basis Citizenship is not a condition to be insured and entitled to right Equal treatment principle 13

Risks and Benefits Risks covered and rights provided by mandatory insurance: 1. In case of old-age Old age pension 2. In case of disability Disability pension 3. In case of death Survivor s pension and Cash compensation of funeral expenses 4. In case of body impairment caused by work injury or occupational disease Cash compensation for body impairment 5. In case of need for assistance and care from other person - Cash compensation for the assistance and care from other person 14

Pension Insurance Coordination Almost all agreements in force regulate pension and disability insurance Equal treatment of insured persons, regardless of the citizenship Applicable legislation based on lex loci laboris principle exemptions posted workers, members of the diplomatic missions or consular posts, travelling personnel etc. 15

Pension Insurance Coordination Maintenance of acquired rights principle Export of benefits with no limits regarding type of benefit and with no deductions Exemptions republics of ex - SFR Yugoslavia 16

Pension and Disability Insurance Adminstrative Capacities Export of the benefits 64.445 pensions paid abroad 35.538 to EU member states 28.521 to the republics of ex SFR Yugoslavia Montenegro, Bosnia and Herzegovina and Macedonia 386 to other states No particular problems expected regarding applying of the EU Regulations on the coordination of the pension insurance Further capacity building needed, particularly in regard to electronic data exchange 17

Voluntary Pension Funds and Pension Plans System established in 2006 Based on the following principles: Voluntary nature of membership Distribution of investment risks Equality of members Publicity of operations Accumulations of funds Pension plans 18

Voluntary Pension Funds and Pension Plans 4 Pension companies, managing 6 funds Accumulation phase Assets 18 billions of RSD (0,5% of the GDP in 2013) 180.669 members 132 beneficiaries in payment phase 19

Voluntary Pension Funds and Pension Plans Equal treatment regarding assets management In case of living abroad for up to one year residential status Indipendency in making decisions on contribution payments 20

Health Insurance Coordination of the Health Insurance 21

The Legal Framework The Constitution of the Republic of Serbia (art. 66, 68. and 97.) - ( Official Gazette of the Republic of Serbia, No. 98/06) The Law on Health Insurance - ( Official Gazette of the Republic of Serbia, No. 107/05, 109/05-corrected, 57/11, 110/12-US, 119/12) The Law on Health Care (art. 238-242) - ( Official Gazette of the Republic of Serbia, No. 107/05, 72/09-other law, 88/10, 99/10, 57/11, 119/12, 45/13-other law) Law on Exercise of Right to Health Care of Children, Pregnant Women and Nursing Mothers - ( Official Gazette of the Republic of Serbia, No. 104/13) Regulation on Voluntary Health Insurance - ( Official Gazette of the Republic of Serbia, No. 108/08 and 49/09) Regulation on conditions and manner of referring of insured persons for treatment abroad - ( Official Gazette of the Republic of Serbia, No. 14/07, 65/08, 36/09, 32/10, 50/10, 75/13 and 110/13) 22

Types of Health Insurance 1. Compulsory Health Insurance the holder is the Republic Health Insurance Fund insurance in case of illness or injury unrelated to work insurance in case of injuries and occupational diseases 2. Voluntary Health Insurance the holder are the Republic Health Insurance Fund and Insurance Companies parallel supplementary private 23

The Law on Health Insurance 1. Principles of Compulsory Health Insurance: The Principle of compulsiveness The Principle of solidarity and reciprocity The Principle of publicity The Principle of protection of the rights of insured persons and the protection of public interest The Principle of continuous Improvement of the quality of Compulsory Health Care The Principle of sustainability and efficiency of Health Care 24

The Law on Health Insurance 2. Personal application: Insured Persons for whom the insurance is paid by the central budget Insured persons insured and members of their family Other persons insured for specific events Voluntary joined Compulsory Health Insurance The citizenship is not a requirement for obtaining the status of the Insured, i.e. the insured person the Principle of equal treatment 25

The Law on Health Insurance 3. Rights form Compulsory Health Insurance two categories of benefits: benefits in kind: the right to health care protection benefits in cash: the right to remuneration for the period of temporary incapacity for work the right to reimbursement of transport costs related to health care The above rights shall be exercised in scope and content, in manner and procedure, unique to all persons covered by the Compulsory Health Insurance 26

Health Care of Insured Persons Abroad 1. During a temporary stay On the basis of an international agreement the principle of insurance the principle of reciprocity The right to use medical emergency services when there is no international agreement sent to work abroad, including self-employed persons employed in household of a domestic citizen in service abroad sent for education, vocational training and specialization on a business trip private stay abroad 27

Health Care of Insured Persons Abroad 2. Reference of Insured persons for treatment abroad Regulated by the general act of the Republic Health Insurance Fund medical indications procedure special committee of the Republic Health Insurance Fund * Regulation on conditions and manner of referring of insured persons for treatment abroad 28

Health Care of Foreigners in the Republic of Serbia Provided in the manner the Health Care is provided to the citizens of the Republic of Serbia Legal framework: 1. On the basis of the Law on Health Insurance the Insured 2. On the basis of an International Agreement regulated scope of Health Care and reimbursement of costs 3. On the Basis of the Law on Health Care (art. 238. tо 242.) right to medical emergency services a sole bearer of costs budget of the Republic of Serbia in specified cases 29

Coordination of Health Insurance Based on the following principles: equal treatment export of benefits (payment of benefits abroad) maintenance of acquired rights previous insurance period determination of the applicable legislation International agreements: Health Care in scope and content determined by the agreement included in 16 of 19 bilateral social security agreements with EU Member States Long tradition and experience in the application of international agreements 30

Planned activities Harmonization of legislation with the EU acquis communautaire Problems in regard with the application of EU rules on coordination in the field of health insurance are not expected Strengthening of the administrative capacity Improvement of information capacities in order to establish a unified informational Health System electronic data exchange 31

Unemployment Insurance Unemployment Insurance Coordination 32

National Employment Service National Employment Service (NES) continues its century-long tradition of being a specialized Service providing job matching, financial assistance and other types of support to the unemployed NES (former Job Mediation Service) was established as a statutory body one century ago; its institutional organization was set up 90 years ago 33

Legal Framework Law on Employment and Unemployment Insurance ( Official Gazette of the Republic of Serbia, No. 36/09, 88/10) Law on Keeping Records in the Area of Employment ( Official Gazette of the FRY No. 46/96 and Official Gazette of the Republic of Serbia, No. 101/05, 36/09) Law on the Conditions for Employment of Foreign Citizens ( Official Gazette of the SFRY No. 11/78, 64/89, Official Gazette of the FRY No. 42/92, 24/94 28/96 and Official Gazette of the Republic of Serbia, No. 101/05) Bilateral agreements on social security 34

Rights of Unemployed Persons Based on Unemployment Insurance Purpose: Provision of adequate level of social security of unemployed persons based on unemployment insurance Right to unemployment benefit Right to health insurance Right to pension and disability insurance 35

Unemployment Benefit Unemployment benefit is a personal entitlement based on the mandatory unemployment insurance and can be exercised by unemployed person upon the termination of his/her insurance An individual is entitled to unemployment benefit provided that he/she was insured against unemployment for at least 12 months continuously, or intermittently within the past 18 months 36

Unemployment Benefit Requirements for Entitlement Grounds for termination of employment/unemployment insurance An unemployed person shall be entitled to unemployment benefit in case of termination of his/her employment contract/mandatory social insurance on the grounds of: 1) termination of the employment contract by the employer in accordance with labour regulations, 2) expiry of the fixed-term employment contract, contract on temporary and casual work, probation period; 3) termination of public office of the elected, appointed and nominated persons, unless the right to administrative leave or salary reimbursement has been exercised, in accordance with the law; 37

Unemployment Benefit Requirements for entitlement 4) Transfer of ownership rights of the company owner or member; 5) Commencement of the bankruptcy or liquidation procedure, as well as other cases of winding up of the employer, in conformity with the law; 6) Relocation of the spouse, in accordance with specific regulations; 7) Termination of the employment contract abroad, in accordance with the law or international agreement. 38

Unemployment Benefit Deadline for applying for the benefit An unemployed person is entitled to unemployment benefit from the first day of termination of mandatory insurance, if he/she registers with and submits the application to the NES within 30 days from the day of termination of employment contract/insurance 39

The Basis for Calculation and Amount of Unemployment Benefit The basis used for calculating the amount of the unemployment benefit is the average salary or wage, or salary reimbursement of the unemployed person, as appropriate, in conformity with the law, in the past six months prior to the month in which his/her employment contract or insurance was terminated Unemployment benefit amout is equal to 50% of the basis used for calculation Unemployment benefit amount may not be higher than 160% or lower than 80% of the minimum national wage, determined pursuant to labour regulations for the month in which the unemployment benefit is paid 40

Duration of the Entitlement to Unemployment Benefit Unemployment benefit is paid to an unemployed person: For the period of: If the person was insured: 3 months 1-5 years 6 months 5-15 years 9 months 15-25 years 12 months over 25 years Exception: 24 months (if the unemployed person needs up to two years to fulfil the nearest retirement requirement, in accordance with regulations governing pension and disability insurance) 41

Termination of the Entitlement to Unemployment Benefit The beneficiary s entitlement to unemployment benefit is terminated if: 1) he/she is removed from the registry 2) records on him/her in the Registry are no longer kept 3) he/she fails to notify NES within five days of any change in circumstances which constitute a requirement or grounds for gaining, exercising or terminating the entitlement to unemployment benefit 4) the competent authority ascertains that he/she works in dependent employment without an employment contract or contract on temporary and casual work 5) he/she files an application for termination of the entitlement 42

Right to Health Insurance and Pension and Disability Insurance Unemployment benefit recipient is entitled to health insurance and pension and disability insurance during the period in which he/she receives unemployment benefit The basis for which the contributions are paid is equal to the amount of unemployment benefit Members of the unemployment benefit recipient s family are entitled to health insurance, unless they are already insured on some other grounds 43

Implementation of Bilateral Agreements on Social Security As stipulated by the Law on Employment and Unemployment Insurance, an unemployed person whose employment contract abroad has been terminated shall be entitled to unemployment benefit in accordance with the international agreement National Employment Service is responsible for carrying out the activities and tasks related to the exercise of unemployment insurance rights under bilateral agreements on social security 44

Implementation of Bilateral Agreements on Social Security The entitlement to unemployment benefit under bilateral agreements on social security is subject to the fulfillment of the requirements related to: insurance span the most recent employment (application of the principle of lex loci laboris) place of residence 45

Statistical Data 2013 Monthly average number of unemployment benefit recipients: 67,874 Min net amount of unemployment benefit: RSD 12,558.84 (gross amount: RSD 19,715.61) Max net amount of unemployment benefit: RSD 29,130.51 (gross amount: RSD 45,730.78) 46

Family Benefits Family Benefits Coordination 47

Family Benefits Legal framework Law on Financial Support for Family with Children ( Official Gazette of RS, 16/02, 115/05 and 107/09) 48

Family Benefits Law on Financial Support for Family with Children Support to childbirth and responsible parenting (Population policy measure) Support to financially vulnerable families with children (Population policy measure) Special support to vulnerable groups of children 49

Family Benefits Population Policy Measures Wage compensation during maternity leave, leave from work for child care, and leave from work for special child care Employees and self-employed One year for the birth of the first and second child respectively Two years for the birth of the third and any subsequent child For a child with developmental disability up to 5 years of age of the child At the amount of 30%, 60% or 100% of the contracted earnings 36,500 beneficiaries on average per month About EUR 230,7 mil. (Allocations in the 2014 State Budget) 50

Parental allowance Family Benefits Population Policy Measures For mother for the first four children For father under special conditions The amount increases with every subsequent child For the 1 st born about EUR 317 (one-off) For the 2 nd child about EUR 1240 (in 24 instalments) For the 3 rd child about EUR 2230 (in 24 instalments) For the 4 th child about EUR 2974 (in 24 instalments) 62,000 children recipients on average per month About EUR 59 mil.(allocations in the 2014 State Budget) 51

Family Benefits Social Policy Measures Child Allowance Recipients families of poorer financial status, for the first four children The amount is the same for every child, regardless of sequence of birth (about EUR 22) More favourable conditions, and child allowance increased for 30% for children: With mental and physical developmental disability Of single parents Without parental care (under guardianship and in foster care) 400,000 children recipients on average per month About EUR 117,5 mil. (Allocations in the 2014 State Budget) 52

Family Benefits Social Policy Measures Special focus to vulnerable groups of children Compensation of the costs of pre-school care for children without parental care Compensation of the costs of pre-school care for children with developmental disability Both the benefits are conditioned by accumulation criteria of eligibility they are to be previously entitled to child allowance 350 children recipients on average per month EUR 207,000 (allocations in the 2014 State Budget) 53

Family Benefits All the benefits are funded from the State Budget Foreseen allocations in the State Budget for 2014 for disbursement of all the benefits under the Law on Financial Support for Families with Children amount to EUR 407,5 mil. 54

Family Benefits at Local Level Funding of the costs of pre-school care for children from financially vulnerable families Units of local governments: Set eligibility criteria Fund the benefits 55

Family Benefits Administrative Capacities Ministry of Labour, Employment and Social Policy Family Care and Social Welfare Department Provincial Secretariat for Healthcare, Social Policy and Demography Child care services in units of local governments For maternity benefits according to the employer s registry office For all other benefits according to the recipient s place of residence Further administrative and technical capacity building needed 56

Family Benefits Coordination Of 19 bilateral social security agreements with EU Member States in application, almost all include maternity protection and right to child allowance Exercise of all the rights, except maternity, is conditioned by nationality, which is why harmonization is required to ensure application of the principle of equality of the EU citizens. Other conditions are subject to principle of coordination 57

THANK YOU FOR YOUR ATTENTION 58