Social insurance is derived from economic insurance and has common features with it, such as: contribution, common fund, designated risk, damage, loss coverage (benefit). The burden of the loss is shared by all those who participate in the creation of the fund to cover the loss of the person paying the contribution who is affected by the accident (principle of reciprocity).
The amount of benefits depends on the contribution made, i.e., the amount of premiums paid and the time of their payment. The essence of social insurance is its universality resulting in the obligation to be subject to such insurance. This compulsion makes social insurance of public, administrative and legal character, in contrast to voluntary economic insurance based on civil law.
The conclusion of an employment contract imposes an obligation to register for social insurance and pay contributions. Both the employee and the employer have no right to waive those contributions, even if the employee is already insured due to the fact that he has already concluded an employment contract with another employer. Every person who is obligatorily insured for pension and disability insurance must be reported for social insurance within seven days from the date when the obligation to insure arises. In addition to reporting, the payer is also obliged to calculate, deduct from the insurance income, settle and timely pay the due Social Insurance contributions for each calendar month in accordance with the applicable regulations.
Types of social insurance
Under social insurance system, the following types of insurance are distinguished:
Pension insurance, which is the most important part of the system, in case of inability to work due to old age. Pension insurance is the most important part of the system in case of inability to work due to old age. The contributors of such insurance provide their income after reaching the so-called retirement age, which is 60 years for women and 65 years for men. An exception to the retirement age is made for those employed in the industries listed in the Act.
Disability insurance guarantees benefits in the event of a “permanent” loss of earning capacity, in which case we commonly refer to a disability pension, or due to the death of the breadwinner, in which case we refer to a survivor pension. The disability pension is granted to an insured person who fulfils all of the following conditions: he/she is unable to work, has the required contribution and non-contribution period and the inability to work occurred during employment or no later than within 18 months from its termination.
Sickness insurance is a benefit paid to an employee for “temporary” inability to work due to illness or the need to go on maternity leave.
In addition to the two previous ones, there are also benefits such as rehabilitation benefits, care benefits and compensatory benefits. Sickness benefit is a type of benefit to which an insured person is entitled after the expiry of 30 days of continuous sickness insurance (if they are compulsorily insured, in the latter case after 90 days). Rehabilitation benefit is intended for an insured person who after exhaustion of sickness benefit is still unable to work and whose treatment and rehabilitation give hope for return to work ability.
Accident insurance paid for the possibility of some random event occurring at work, resulting in inability to perform work. While in the previous three the amount of premiums is set at the same percentage rates, in this case it depends on what kind of work one does. Moreover, it is only paid by the employer, who includes it in the cost of business. It is possible that the insured person is not entitled to benefits from accident insurance. This happens if the cause of the accident was exclusively due to the insured’s violation of the regulations concerning the protection of life and health, unintentionally or as a result of gross negligence. Moreover, the insured is not entitled to benefits if during the accident he was intoxicated or under the influence of drugs or psychotropic substances.
Contributory and non-contributory periods play an important role in determining the right to a pension and in calculating its amount. Retirement and disability insurance is obligatory for, among others, natural persons who are employees, entrepreneurs running non-agricultural businesses and persons in cooperative employment relationships. Obligatory sickness insurance covers, among others, persons in employment relationships and members of agricultural production cooperatives. Accident insurance is compulsory for persons covered by retirement and disability insurance, with exceptions.