MANDATORY SOCIAL INSURANCE CODE

(title amend. SG/67 of 2003)

Promulgated State Gazette, issue 110/17.12.2000; Decision No 5 of the Constitutional Court of the Republic of Bulgaria of 29.06.2000 – issue 55/07.07.2000; amended and supplemented issue 64/04.08.2000; a,. issue 1/02/01.2001; am. and suppl. issue 1/04.01.2002, in force from 01.01.2002; am. and suppl. issue 10/29.01.2002, in force from 01.01.2002; am. and suppl. issue 45/30.04.2002, in force from 30.04.2002; issue 74/30.07.2002, in force from 01.01.2003., suppl. issue 112 of November 29th 2002, amended and supplemented, issue 119 of December 27th 2002, in force from January 1st 2003, suppl., issue 120 of December 2002, amended and supplemented, issue 8 of January 28th 2003, in force form March 1st 2003, suppl. issue 42 of may 9th 2003, amended and supplemented, issue 67 of July 29th 2003

Subject

Article 1. (suppl. SG 1/2002, amended, issue 67 of 2003) This Code shall regulate the public relations concerning:

1. public social insurance for general sickness, work injury, occupational sickness, maternity, unemployment, old age and death;

2. supplementary social insurance, which includes:

а) supplementary mandatory pension insurance for old age and death;

b) supplementary voluntary pension insurance for old age, disability and death;

c) supplementary voluntary insurance for unemployment and/or professional training.

mandatory public social insurance which shall include public social insurance for general sickness, work injury, occupational sickness, maternity, unemployment, old age, and death, as well as supplementary mandatory pension insurance.

PART ONE

PUBLIC SOCIAL INSURANCE

(Title amended – SG 67/2003)

CHAPTER ONE

GENERAL PROVISIONS

Scope of Social Insurance

Article 2. Public social insurance shall provide benefits, assistance and pensions in the following cases:

  1. temporary incapacity;
  2. temporarily reduced working capacity;
  3. disability;
  4. maternity;
  5. (new - SG 1/2002) unemployment;
  6. (previous item 5 – SG, issue 1 of 2002) old age;
  7. (previous item 5 – SG, issue 1 of 2002) death.

Social Insurance Principles

Article 3. Public social insurance shall be performed on the basis of the following principles:

1. mandatory participation and comprehensiveness of the insurance;

2. solidarity of the insured persons;

3. equality of the insured persons;

4. social dialogue in the management of the social insurance system;

5. fund organization of insurance funds.

Insured Persons

Article 4. /1/ The following persons shall be obliged to be insured for all social insurance risks under this code:

  1. (amended, issue 119 of 2002) workers and employees hired for more than five working days, or 40 hours, in one calendar month, regardless of the nature of the work, the way of payment, and the source of funding. Persons included in the program From Social Assistance to Employment shall not be insured for unemployment;
  2. government employees.
  3. (new – SG 74/2002) judges, prosecutors, investigators, bailiffs, recordation judges and court employees;
  4. (amended – SG 64/2000, previous item 3, issue 74 of 2002, amend., issue 119 of 2002) regular duty military staff under the Act on the Defense and Armed Forces of the Republic of Bulgaria, government employees – officers, sergeants, and civilians under the Act on the Ministry of the Interior, as well as the government employees - officers, sergeants and civil persons under the Penalty Enforcement Act;
  5. (amended – SG 1/2002, previous item 4, issue 74 of 2002) individuals employed as cooperative members compensated for their labor; cooperative members working without labor relations shall not be insured for unemployment;
  6. (previous item 5 – SG, issue 74 of 2002) individuals working under a second or additional labor contract;
  7. (previous item 6 – SG, issue 74 of 2002) individuals working under contracts for management and control of commercial companies.

/2/ (amended – SG 64/2000, 1/2002) Workers hired by one or more employers for not more than five working days (40 hours) during a calendar month shall be obliged to be insured for disability, old age and death, and for work injury and occupational sickness.

/3/ (Partially declared unconstitutional by the Constitutional Court of the Republic of Bulgaria with respect to working pensioners included in the scope of persons obliged to be insured under this provision – SG, 55/2000) The following persons shall be obliged to be insured for disability due to general sickness, for old age and death:

  1. individuals registered as freelance professionals and/or craftsmen;
  2. individuals performing economic activity as sole traders, owners of, or partners in, commercial companies;
  3. (declared unconstitutional by the Constitutional Court of the Republic of Bulgaria – SG, 55/2000) Ph.D. students if they do not have pension insurance on other premises;
  4. (amended – SG 64/2000) agricultural producers;
  5. (amended – SG 64/2000, suppl. issue 119 of 2002) persons working without labor relations and receiving monthly remuneration equal to, or higher than, one minimum monthly wage, after the allowable expenses have been deducted from it, if such persons have not been insured on other grounds during the respective month; the government employees - officers, sergeants and civil persons under the Penalty Enforcement Act individuals working without labor relations and receiving compensation equal to or exceeding one minimum wage after deduction of the allowable expenses if they are not insured on other grounds during the respective month’;
  6. (new – SG 119/2002) persons working without labor relations, who are insured on different grounds during the respective period, regardless of the amount of their remuneration.

/4/ (amended – SG, 64/2000, suppl. 1/2002) Individuals under paragraph 3, items 1, 2 and 4, may, by their own choice, be insured for allinsurance events insured social risks with the exception of work injury and occupational sickness and unemployment.

/5/ (amendedNew– SG, 64/2000, suppl. 10/2002)Individuals assigned to work abroad by a Bulgarian intermediary may be insured for general sickness disability, for old age and death, on selected insured income between the minimum and the maximum insured income determined in the Social Security Budget Act.

/6/ (new – SG, 64/2000) Persons, to whom pension has been granted, may insure themselves by their own will in the cases when they exercise activities under para 3, items 1, 2, 4 and 5 of this Code.

/7/ (new – SG, 1/2002) The procedure for social insurance of self-insured persons, persons working without a labor or official relation, and persons assigned to work abroad by a Bulgarian employer or through intermediation of a Bulgarian organization, shall be determined by the Council of Ministers upon proposal of the NSSI.

Insurers

Article 5. /1/ Insurer shall be any individual, legal entity or its branches, as well as other organizations obliged by law to make social insurance contributions for other individuals.

/2/ Self-insured persons shall be individuals obliged to make social insurance contributions entirely at their own account.

/3/ (New – SG, issue 67 of 2003) Legal entities, their branch offices, and sole traders shall be registered at the regional offices of the NSSI within 7 days following their entry in the court register or the act of their constitution. Self-insured persons shall be registered at the regional offices of the NSSI within 7 days following the commencement of their activity.

/4/ (amended – SG, 1/2002, previous para 3, issue 67 of 2003) Insurers shall be obliged to provide the National Social Security Institute with periodical information concerning insured income, public social insurance contributions, health insurance and supplementary mandatory pension insurance, social insurance payments, and length of service, separately for each worker or employee.

/45/ (previous para 4, amended – SG, issue 67 of 2003) Data under paragraph 34 above shall also be provided to the National Social Security Institute by individuals under paragraph 2.

/56/ (previous para 5, amended – SG, issue 67 of 2003) The National Social Security Institute shall issue instructions regarding the terms, content, manner, and procedures for presenting and keeping the information under paragraph 3 4.

/67/ (previous para. 6, amended – SG, issue 67 of 2003) The insurer shall be obliged, upon request by the insured person or his representative, to issue, free of charge, all required documents concerning length of participation and insured income within 14 days.

/78/ (new – SG, 1/2002, previous para 7, issue 67 of 2003) In case of liquidation, merger, acquisition, spin-off, split-up or transformation, insurers shall be obliged to notify the territorial office of the NSSI, where they are registered, prior to the submission of the request to court. The evidence of the notification shall be a condition for processing of the request by the court.

/89/ (new – SG, 1/2002, previous para 8, issue 67 of 2003) In case of opening of a bank account, the insurer shall declare such circumstance within seven days, to the territorial office of the NSSI where it is registered.

Social Insurance Contributions and Insured Income

Article 6. (Am. and suppl. SG 64/2000, am. 1/2002) /1/ Contribution rates for public social insurance funds shall be determined separately for each fund by the Public Social Security Budget Act in accordance with the covered social insurance risks.

/2/ The income for which contributions shall be owed, shall include all kinds of remuneration and income from labor. The Public Social Security Budget Act shall determine:

  1. the maximum monthly amount of the insured income during the calendar year;
  2. the minimum monthly amount of the insured income during the calendar year for self-insured individuals
  3. (new – SG 119/2002) the main economic activities and occupation groups for which minimum monthly insured income is introduced for the calendar year by activity and group of occupations, as well as the minimum insured income for them.

/3/ (am. SG 119/2002) Social insurance contributions for workers and employees and for persons under art. 4, para 1, item 7, shall be owed on the received gross monthly compensation, not less than the minimum insured income under para 2, item 3, and not more than the maximum monthly amount of the insured income. Social insurance contributions for workers and employees and for persons under art. 4, para 1, items 5 and 7, and para 3, items 5 and 6, and shall be divided between insurers and insured persons in the following ratio;

a)in 2000 – 2001 – 80:20;

b)in 2002 2004 – 75:25;

c)in 2005 – 70:30;

d)in 2006 – 65:35;

e)in 2007 – 60:40

f)in 2008 – 55:45;

g)in 2009 and after – 50:50

/4/ (am. SG 119/2002) Gross remuneration for persons under art. 4, paragraph 1, item 7 and para 3, item 5 and 6, on which insurance contributions shall be due, shall be determined after deduction of the allowable expenses.

/5/ (Am. and suppl. – SG 74/2002, suppl. SG 119/2002) Social insurance contributions for persons under art. 4, paragraph 1, items 2, 3 and 4, shall be owed on the received gross monthly compensations related to such relations, but on not more than the maximum amount of the insured income, and shall be at the expense of the state budget, the judiciary power budget, respectively.

/6/ Social insurance contributions to the Work Injury and Occupational Sickness Fund shall be paid at the accountexpense of the insurers.

/7/ Social insurance contributions for persons under art. 4, paragraph 3, items 1, 2 and 4, shall be paid at the expense of the insured persons and shall be owed in advance:

  1. for persons under art. 4, para 3, items 1 and 2 – on monthly insured income between the minimum and the maximum monthly amount of the income determined with the Public Social Insurance Budget Act for the respective year;
  2. for persons under art. 4, para 3, item 4 – on monthly insured income between 50 per cent of the minimum and the maximum monthly amount of the income determined with the Public Social Insurance Budget Act for the respective year.

/8/ (suppl. SG 119/2002) The final amount of the monthly insured income for persons under para 7 shall be determined for the period during which labor activity has been performed in the previous year, on the basis of the income declared in a schedule of the annual tax return under the Individual Income Tax Act, and may not be smaller than the minimum monthly insured income or higher than the maximum monthly insured income. The final contribution shall be owed on the annual insured income, determined as a difference between the declared income and the sum of incomes on which advance contributions have been paid. Social insurance contributions shall be paid at the expense of the insured persons in the amounts determined for the Pensions Fund.

/9/ Farmers registered in accordance with the law, whose only activity is farming, shall not determine a final amount of their insured income. Social insurance contributions for such persons may be paid from funds for aiding farmers, in accordance with terms and conditions determined by the Council of Ministers.

/10/ For persons receiving income from activities on grounds different from art. 4, contributions shall be paid on the sum of their insured incomes, but on not more than the maximum monthly amount of the insured income as follows:

  1. incomes from labor and/or official relations, from company management and control contracts and from labor activity as cooperative members;
  2. insured income as sole traders, owners of, or partners in, commercial companies, freelance professionals and/or craftsmen, and farmers;
  3. income from activity without labor relations.

/11/ Contributions in the amount established for the Pensions Fund, determined in accordance with para 3, 4, and 5, respectively, shall be charged on funds for social expenses allocated permanently or periodically to persons under para 4, item 1, in cash or in kind.

/12/ Social insurance contributions at the expense of the employer may not be deducted from the compensation of the insured persons. Such compensation may not be reduced with their amount.

/13/ Compensation elements and incomes for which contributions are paid shall be determined by an act of the Council of Ministers upon proposal of the NSSI.

/14/ (new SG 119/2002) The schedule under para 8 of the annual tax return under the Individual Income Tax Act shall be approved by the Minister of Finance and the Governor of the National Social Security Institute.

Art. 6a. (new – SG 45/2002) /1/ The tax bodies shall present to the NSSI information regarding declared income or income established by an act of the tax bodies for the taxable persons in accordance with the Individual Income Tax Act.

/2/ The NSSI shall provide the tax administration with information concerning the income under art. 6, para 2.

Terms for Payment of Social Insurance Contributions

Article 7. /1/ (am. – SG 1/2002) Contributions for public social insurance, which are paid at the accountexpense of the insurers, shall be paid simultaneously with the payment of the wage or a part thereof.

/2/ (am. – SG 1/2002) Contributions paid at the account expense of the insured person under art. 4, paragraph 1, shall be paid upon payment of the compensation due.

/3/ (am. – SG 1/2002) Contributions for self-insured persons shall be paid in person or through contribution payment centers by the 10th day of the month following the month for which they are due.

/4/ (new – SG, 64/2000, in force from 01.08.2000) Private farmers only involved in farming and insured only for general sickness disability, old age and death, may pay their contributions by March 31 of the year following the year for which they are due.

/5/ (new – SG 1/2002) Social insurance contributions for persons working without a labor relation and persons paying insurance contributions entirely at their account, as well as for all other cases, shall be paid by the insurer by the 10th day of each month following the month for which they are due.

/6/ (new – SG 1/2002) Social insurance contributions shall be paid at banks or post branches and offices in accordance with terms and provisions determined by the NSSI, to the respective accounts of public social insurance and supplementary mandatory pension insurance.

/7/ (new – SG 1/2002) Insurers shall pay social insurance contributions by means of payment orders each month separately by making transfers from their accounts to the respective account of public social insurance and supplementary mandatory pension insurance upon payment of salaries, including advance payments. In case of withdrawal of amounts for payments, termination of the insurance or leave other than the regular payment of salaries or advance payments, no separate payment order shall be issued – these amounts shall be included in the payment order for the first following payment of social insurance contributions.

/8/ (new – SG 1/2002) Banks shall allow withdrawal of money for making payments of labor remunerations, including advance payments, as well as cash benefits, and other payments from public social insurance, only after submission of a payment order for transfer of social insurance contributions and a declaration of the insurer that the contributions due on such amounts for public pension, health and supplementary pension insurance have been paid.

/9/ (new – SG 1/2002) Insurers who do not have a bank account shall pay social insurance contributions in cash at banks and post branches and offices to the respective account of the public social insurance and supplementary mandatory pension insurance.

/10/ (new – SG 1/2002) The portion of social insurance contributions which is at the expense of the insured persons pursuant to art. 6, para 3, shall be paid upon payment of their salaries and shall not be deducted from advance payments with the exception of cases when only advance payment has been made for the respective month.

Contribution Payment Centers

Article 8. /1/ (am. – SG 64/2000) Individuals under art. 4, para 3, items 1, 2 and 4, as well as legal entities, may establish contribution payment centers, which shall be registered in the regional office of the NSSI. Contribution payment centers shall perform the insurance of their members. Insurers who are members of such contribution payment centers and who have up to ten employees, may perform their social insurance, as well as the social insurance of individuals working for them without a labor relation, through such contribution payment centers.

/2/ (am. – SG 64/2000) Contribution payment centers shall perform social insurance of individuals under paragraph 1:

  1. (am. – SG 64/2000, 1/2002) by collecting contributions due for public social insurance, supplementary mandatory pension insurance, health insurance, and transferring them to the respective accounts of the National Social Security Institute.
  2. in case of occurrence of an insurance event, they shall pay benefits and assistance due to the insured persons;
  3. forming and maintaining documentation related to the social insurance of the members of the contribution payment centers.

/3/ The terms and conditions for establishment and functioning of contribution payment centers, shall be regulated by an act of the Council of Ministers upon proposal of the National Social Security Institute.

Length of Participation in the System

Article 9. (Am. and suppl. SG 64/2000, am. 1/2002) /1/. (am. SG 119/2002) Length of participation shall be calculated in days, months, and years. The following shall be considered as length of participation: