The state social insurance is carried out on the basis of the principles of obligation, solidarity, and equality of the insured persons. The principles of the insurance system in Bulgaria are regulated in the Social Insurance Code.
In this article we will introduce you to the basics of social security in Bulgaria.
What are the types of insurance
Social security is provided in the event of any of the following situations:
- temporary incapacity for work
- common disease
- occupational disease
- occupational accident
- motherhood
- unemployment
- old age, disability, and death
Persons subject to compulsory social security are…
Objects of insurance protection and receive social security contributions in their name. The insured persons form two groups.
The first group is provided for all the situations listed above. These are employees, regardless of the type of profession, the method of payment, and the source of funding. Other representatives are the members of cooperatives, practicing a profession, and receiving payment.
The second group is insured for disability due to general illness for old age and death. The main part is:
- persons exercising a free profession and/or craft activity
- persons engaged in labor activity as sole traders
- owners and partners in commercial companies
Insurance Contributions
Social security contributions are periodic monthly payments. They are a percentage of the insurance income. They are not taxes and are not taxable, and their purpose is to help an insured person in difficulty.
The smallest amount on which the social security contributions are calculated is:
- BGN 610 for workers and self-insured
- BGN 305 for the days of the persons on unpaid leave
- BGN 610 for the days of persons in temporary incapacity for work due to illness, pregnancy and childbirth and raising a small child
The max monthly amount of the insurance income is BGN 3,000.
People who can make contributions are:
- individuals – at their own expense
- employers for their employees
- assignors who are insurers – for the persons with whom a contract for assignment of management or control has been concluded;
- assignors who are insurers – for the persons with whom a contract has been concluded for performance of other labor activity without employment
Insurers pay contributions through payment orders to the respective accounts of the state social insurance for the various funds. To successfully transfer the insurance, you need a Personal Number of Foreigner (PNF), which is issued by the National Revenue Agency.
The amount of social security contributions is distributed between the insurer and the insured person in a certain ratio. The insurer has to pay 60% and the insured person the remaining 40%. Here you can find the necessary information about the amount and distribution of insurances and taxes.
In case you are a self-insured person, you must pay the full amount of the insurance. Self-insured persons are individuals who are obliged to pay social insurance contributions at their own expense.
When calculating the amount of insurance there are two cases:
- In the case of self-employed persons, the income chosen by them is used. If the person has indicated that he/she will be insured at BGN 1,800, the insurances will be accrued on this amount and not on the earned BGN 1,300, for example.
- When someone else is the insurer, the calculation is based on one of the following 3 things: the entire income from your work, the minimum monthly salary (in case you do not work), the due compensation under the employment contract
We have already mentioned that social security contributions are periodic monthly payments, but when should you pay them? Insurers must deposit the money by the 25th of the month following the month in which you worked. For example:
You worked in April and the insurances for this month must be paid by the insurer by May 25. The same rules apply to self-employed persons. The difference is that you have the option to deposit the money yourself or through an insurance fund at your expense.
The insurance contributions are accumulated in an individual account and the amount belongs to the insured or his heirs. The money is spent only on the payment of benefits and pensions, as well as on the provision of insurance services – health, prevention, and rehabilitation, etc.
Benefits
Benefits for temporary incapacity for work and employment
Persons insured for general illness and maternity are entitled to benefits for the time of leave due to temporary incapacity for work and employment. You need at least 6 months of work experience for people over 18 years of age.
The daily cash benefit for:
- temporary incapacity for work due to general illness is 80% of the average daily insurance income for the last 18 months for which insurance contributions have been paid or are due
- temporary incapacity for work due to an accident at work or an occupational disease is equal to 90% of the average daily insurance income for the last 18 months for which insurance contributions have been paid or are due
You receive the benefits from the first day of the event until recovery or determination of permanent disability.
Maternity benefits
Insured persons are entitled to cash benefits for pregnancy and childbirth. The requirement is to be insured against this risk for a period of 12 months.
Mothers who are insured for general illness and maternity receive cash benefits for a period of 410 calendar days, starting 45 days before the due date for the birth of the child. If the birth occurs before the end of 45 days after the start of receiving benefits, the rest of the 45 days can be used after birth.
Fathers can get paternity benefits for a period of 15 calendar days after birth. The condition is to be insured with the General Illness and Maternity Fund for a period of at least 12 months. When the child reaches the age of 6 months, the father can take care of it, and receive the cash benefits from the mother until the end of 410 days.
The amount of the benefit is 90% of the father’s insurance income for the last 24 months.
After the end of the maternity leave, mothers who have been insured for general illness and maternity for a period of at least 12 months can receive compensation for raising young children under the age of 2 in the amount of BGN 380.
Unemployment benefits
If your employer pays unemployment insurance contributions, you are insured against the risk of unemployment.
Persons who have paid contributions to the Unemployment Fund for a minimum of 12 months in the 18 months preceding the termination of insurance are permitted to unemployment benefits. The conditions are:
- to be registered as unemployed with the Employment Agency
- you do not receive a pension for the length of service and old age or an occupational pension for early retirement
- you are not in an employment relationship
You have the right to receive information about vacancies and help to find a suitable job. You can receive unemployment benefits and allowances. They are paid from 4 to 12 months depending on the total length of insurance:
- for insurance experience of up to 3 years, you receive benefits for a period of 4 months
- from 3 to 7 years, the period is 6 months
- from 7 years to 11 years – 8 months
- from 11 years to 15 years – 10 months
- over 15 – 12 months
The amount of the daily unemployment benefit is equal to 60% of the average salary or the average insurance income. Based on this income, you have to been paying or owed unemployment insurance for the previous 24 months.
Accident and Occupational Disease Insurance
All persons working on employment contracts, service contracts, elective positions, in cooperatives, or on management contracts are compulsorily insured against accidents at work and occupational diseases to the fund for occupational accidents and diseases.
The employer has to pay contributions, and their amount is a percentage of the monthly insurance income of the insured person.
The daily cash benefit equals 90% of the average daily insurance income for the last 18 months, based on which insurances have been paid or are due. The person receives benefits from the day of the event until the reimbursement or granting of an invalidity pension.
To be able to get benefits, you must be granted temporary incapacity leave through sick leave. The document is issued on the day of establishment of incapacity for work, and the leave may start from the previous one, from the same or the day following the examination. You must present the sick list to the employer or inform him about it immediately after its issuance within 2 working days.
Health Insurance
Health insurance consists of mandatory (HIA) and supplementary.
The health insurance of the employees under an employment contract is paid by the employer, as part of the percentage for health insurance is at the expense of the employee, the part is at the expense of the employer.
If you are a self-insured person, the health insurance rate is at your expense. The unemployed must pay a minimum of BGN 24.40 per month.
The health insured persons receive:
- two free seals for the year
- free examination by a specialist with a referral from a personal doctor
- access to high-quality medical care
- primary & specialized outpatient care
- diagnostic tests
- medicines for home treatment
- information on your health status and your treatment methods
Compulsory health insurance (HIA)
Compulsory health insurance gives you access to a basic package of medical services.
The insurances amount to 8%. They are divided between the employer and the employee in a ratio of 60:40 – 3.2% at the expense of the insured person and 4.8% at the expense of the employer.
Supplementary health insurance
The supplementary health insurance is maintained by licensed health insurance companies. It allows the use of extra health services besides those included in the HIA. You can find more information about these services in the packages that the companies offer.
Supplementary health insurance is often part of a social package that companies offer to their employees.
If you benefit from the supplementary health insurance, you get access to:
- Visit a specialist without the need for referral
- Scheduling an exact time for examination
- Covered funds for annual, preventive examinations
- Reimbursement of medicines
Mandatory pension insurance – the first pillar
The pension system in Bulgaria consists of three pillars:
- Mandatory state pension insurance (PSP) as an element of the State social insurance
- Supplementary mandatory pension insurance (SMPS) in pension funds managed by licensed pension insurance companies
- Supplementary voluntary pension insurance (VPA) in pension funds managed by licensed pension insurance companies
The first pillar is the state social security (SSS). It entitles you to receive a pension for the length of service and old age. For this purpose, compulsory social security contributions are made in the amount specified in the State Social Insurance Budget Act.
You get the right to a pension for the length of service and old age under the following conditions:
- For the women:
- reaching the age of 60 years and 10 months
- insurance experience 35 years and 2 months
- For men:
- 63 years and 10 months by men
- insurance experience 38 years and 2 months for men
Supplementary Mandatory Pension Insurance – the second pillar
Supplementary mandatory pension insurance (SMPS) is the second pillar of the pension system. It is carried out by licensed pension insurance companies in the ones managed by them. This type of insurance is personal. Everyone insured in a universal and professional pension fund has an individual insurance number and an individual insurance account.
Supplementary Mandatory Pension Insurance Funds
Occupational pension funds: these funds are mandatory for those working in the conditions of the first and second categories of work. The contribution is at the expense of the employer.
Universal pension funds: this type is mandatory for those born after 31.12.1959, who are insured in the state social insurance. The obligation to provide arises from the moment you start work for the first time.
Within 3 months you must choose a universal fund, otherwise, NRA will assign you. The employer and the insured person contribute every month to the amount determined by the Social Insurance Code.
Insurance rights in a universal pension fund
Insurance in a universal pension fund entitles you to receive a supplementary lifelong old-age pension, separate from the social security pension.
Insurance rights in an occupational pension fund
With the insurance in an occupational pension fund you receive the right to a term occupational pension for early retirement, received until the acquisition of the right to a pension for insurance length of service and age from Social Security.
Insurance contract
The insurance contract in a fund for extra mandatory pension insurance is open-ended. It must be drawn up and signed in duplicate, one for each of the parties.
Supplementary Voluntary Pension Insurance – the third pillar
The supplementary voluntary pension insurance is provided by the voluntary pension funds.
Participation in them is at your request. Anyone over the age of 16 can get insured in a voluntary pension fund. You can either pay personal contributions, receive contributions from an employer or another insurer.
Rights Of Insured Persons
In the case of voluntary pension funds, there are no restrictions on the amount and frequency of the contribution. If you wish, they can be:
- monthly
- for another period
- disposable
You or the person who makes contributions in your favor determine their amount. Employer contributions do not oblige you to make personal contributions. When you make personal contributions at your request, your employer has to deduct the personal contribution from your monthly salary and transfer it to the fund of your choice.
When contributions are made in your favor by another insurer, these persons enter into an insurance contract with the company. This requires your prior written consent.
You are not allowed to withdraw the funds accumulated from the employer’s contributions before acquiring the right to a pension. It may limit your right to transfer to another pension fund the funds accumulated from its contributions. The restriction ends upon the termination of employment with the employer.
If you are insured with personal contributions to a voluntary fund, you can withdraw from the funds accumulated in your account before acquiring the right to a pension. In this case, a fee of up to BGN 20 is usually paid.
Fees And Deductions
The pension insurance company collects fees and deductions for the management of the funds.
There is a one-time entrance fee for opening an individual insurance account – no more than BGN 10. Then there is a deduction as a percentage of each insurance contribution – up to 7 percent
There are also extra fees:
- upon each withdrawal (in whole or part) of the accumulated funds on the individual insurance account before acquiring the right to a personal old-age or invalidity pension
- upon transfer of the funds on the individual account to a pension scheme
Know your rights
Here you can find the laws and web pages of the institutions which determine your rights can:
- Social Insurance Code
- National Social Security Institute
- Employment Agency
- National Revenue Agency
- Social Assistance Agency
