REPUBLIC OF LITHUANIA
LAW ON
STATE SOCIAL INSURANCE
21 May 1991 No I-1336
Vilnius
(As last amended on 22 December 2009 – No XI-638)
SECTION ONE
General Provisions
Article 1. Purpose of the Law
1. This Law shall establish the basis for state social insurance relations: types of state social insurance, categories of the persons covered by state social insurance, principles and structure of the state social insurance management system, rights, duties and responsibility of entities thereof.
Article 2. Definitions
1. “Insured persons” mean the natural persons who, in accordance with the procedure laid down by this Law, pay state social insurance contributions themselves and/or insurers pay these contributions for them.
2. “Insurers” mean all legal persons and branches and representative offices thereof as well as the natural persons who, in accordance with the procedure laid down by laws, are under an obligation to pay state social insurance contributions.
3. “Insured event” means a legal fact entitling to a state social insurance benefit in accordance with the procedure laid down by laws.
4. “Insured income” means all the income of a person from which state social insurance contributions have been calculated and must be paid in accordance with the procedure laid down by this Law as well as calculated sickness, maternity, paternity, maternity (paternity), vocational rehabilitation state social insurance allowances, state social insurance allowances for illness resulting from occupational accidents or occupational diseases and unemployment state social insurance benefits. The calculated amount of output VAT for the goods supplied and the services rendered shall not be held equivalent to insured income.
5. “Cumulative pension contribution” means a portion of the state social pension insurance contribution accumulated under the Law on the Accumulation of Pensions.
6. “Pension benefits” mean the benefits specified in the Law on the Accumulation of Pensions and paid from the pension assets accumulated by a person with a pension fund.
7. “Pension accumulation companies” mean a pension fund management company or a life assurance undertaking holding an authorisation or licence issued by a supervisory institution to engage in the accumulation of pensions in the territory of the Republic of Lithuania as specified under the Law on the Accumulation of Pensions.
8. “Self-employed persons” mean owners of individual enterprises; members of general partnerships, members of limited partnerships; the persons who are engaged in individual activities as defined in the Law on Personal Income Tax (lawyers, assistant lawyers, notaries, bailiffs, the persons holding business certificates and other persons); farmers and their partners, in the case when the economic size of an agricultural holding as registered in the Republic of Lithuania Agriculture and Rural Business Register is, according to the calculations carried out by the State undertaking Agricultural Information and Rural Business Centre for the tax period of the previous year from 1 January until 31 December, equal to, or exceeds, 4 European Size Units, shall be established on the basis of Commission Decision No 85/377/EEC (with successive amendments) establishing a Community typology for agricultural holdings (hereinafter referred to as “farmers and their partners”).
9. “Administration agencies of the State Social Insurance Fund” (hereinafter referred to as the “administration agencies of the Fund”) mean the State Social Insurance Fund Board under the Ministry of Social Security and Labour (hereinafter referred to as the “Fund Board”), local offices of the State Social Insurance Fund Board (hereinafter referred to as “local offices of the Fund Board”) and other agencies of the Fund related to the administration of the State Social Insurance Fund. The administration agencies of the State Social Insurance Fund shall be state agencies.
10. “State social insurance contributions” (hereinafter referred to as “social insurance contributions”) mean the contributions paid by insured persons and/or by their insurers in the amount specified by laws.
11. “State social insurance benefits” (hereinafter referred to as “social insurance benefits”) mean the social insurance benefits specified by laws to which insured persons and other natural persons specified by laws become entitled in the event of an insured event.
12. “State Social Insurance Fund” (hereinafter referred to as the “Fund”) means the centralised targeted financial and material resources managed in accordance with the procedure laid down by this Law and accounted in the budget of the State Social Insurance Fund, which is separate from state and municipal budgets, and used to finance, manage and administer state social pension, sickness and maternity, unemployment and health insurance as well as insurance of occupational accidents and occupational diseases.
13. “State social insurance” (hereinafter referred to as “social insurance”) means a part of the system of social security whose measures are intended to compensate, in full or in part, for the income derived from work and lost by insured persons and, in the cases specified by laws, their family members as a result of insured events or to cover additional expenses.
Article 3. Types of Social Insurance
This Law shall establish the following types of social insurance:
1) pension social insurance, where a person is insured to receive the basic or the basic and supplementary parts of a pension as provided for in the Law on State Social Insurance Pensions;
2) sickness and maternity social insurance, where a person is insured to receive the sickness and maternity, paternity and maternity (paternity) and vocational rehabilitation benefits provided for in the Law on Sickness and Maternity Social Insurance. In the cases provided for by this Law, persons shall be covered by sickness and maternity social insurance, where a person is insured to receive only the maternity, paternity and maternity (paternity) benefits provided for in the Law on Sickness and Maternity Social Insurance;
3) unemployment social insurance, where a person is insured to receive the benefits provided for in the Law on Unemployment Social Insurance;
4) social insurance of occupational accidents and occupational diseases, where a person is insured to receive the benefits provided for in the Law on Social Insurance of Occupational Accidents and Occupational Diseases;
Article 4. Persons Covered by Social Insurance According to the Types of Social Insurance
1. The following persons shall be covered on a compulsory basis by social insurance of the types specified in Article 3 of this Law:
1) the persons employed under employment contracts, notary candidates (assessors), the persons receiving remuneration for work and holding, on the basis of membership, elected posts or appointed to constituency, town, region and polling district electoral and referendum commissions, also the persons who are linked with the insurer by employment relations or by the relations in their essence corresponding to employment relations in the same manner as these relations are defined in the Law on Personal Income Tax and who at the same time receive from this insurer income from sports activities, performing activities or under commission agreements;
2) the state politicians, judges, state officials and civil servants indicated in the Law on the Remuneration of State Politicians and State Officials, the Law on the Remuneration of Judges and the Law on Civil Service (with the exception of the civil servants indicated in paragraph 2 of this Article), the persons indicated in the Law on Delegation of Persons to International Institutions and Institutions of the European Union or to Foreign Institutions, where their remuneration for work and social insurance contributions therefrom are paid by the delegating institution of the Republic of Lithuania which has delegated a person (hereinafter referred to as “delegating persons”), also the persons receiving remuneration for work and appointed by the Seimas, the Speaker of the Seimas, the President of the Republic or the Prime Minister.
2. The following persons shall be covered on a compulsory basis by social insurance of the types specified in subparagraphs 1 and 3 of Article 3 of this Law:
1) officers of the system of the internal service, the system of the State Security Department, the Special Investigation Service and the Prisons Department under the Ministry of Justice of the Republic of Lithuania as well as the officials of the agencies and undertakings subordinate thereto;
2) servicemen in professional military service of the system of national defence and the statutory servants in civilian national defence service at the Second Investigation Department under the Ministry of National Defence;
3) the spouses of civil servants and servicemen in professional military service who have not attained the pensionable age and do not receive the income related to employment relations – during a period when they reside abroad together with a civil servant or a delegated person, where the latter has been delegated or where the civil servant has been transferred to a post at a diplomatic mission, consular post of the Republic of Lithuania, mission of the Republic of Lithuania at an international organisation, international institution or an institution of the European Union or a foreign state’s institution, sent on a special mission, or when they reside together with a serviceman in professional military service, where the serviceman in professional military service has been assigned to fulfil military service at a diplomatic mission, consular post of the Republic of Lithuania, mission of the Republic of Lithuania at an international organisation, a foreign state’s or international military or defence institution. The spouses of delegated persons shall be covered by insurance only where the remuneration of the delegated person and social insurance contributions therefrom are paid by the delegating institution of the Republic of Lithuania which has delegated the person. A spouse of the President of the Republic who has not attained the pensionable age and who does not receive the insured income – during the term of office of the President of the Republic;
4) the servicemen fulfilling mandatory initial military service in the armed forces of the Republic of Lithuania and servicemen fulfilling alternative national defence service;
5) at the choice of a family, one of the parents (adoptive parents) or a person appointed as a child’s guardian raising a child under 3 years of age;
6) one of the parents (adoptive parents) of a disabled person rated as requiring permanent special nursing care, where the parent is not in the old-age retirement group, or a person who has been declared, in accordance with the established procedure, a guardian or custodian of the disabled person and who nurses the said disabled person at home. This provision shall also apply to one of the parents (adoptive parents), guardian or custodian nursing at home a totally disabled person rated as such before 1 July 2005.
3. Self-employed persons, with the exception of the persons engaged in individual activities under business certificates, shall be covered on a compulsory basis by pension social insurance to receive the basic and supplementary parts of a pension (subparagraph 1 of Article 3 of this Law), by sickness and maternity social insurance, where a person is insured to receive only the maternity, paternity and maternity (paternity) benefits (subparagraph 2 of Article 3 of this Law), and by health insurance (subparagraph 5 of Article 3 of this Law).
Note: Provisions of paragraph 3 shall apply to calculation and payment of state social insurance contributions for 2010 and subsequent years.
4. The following persons shall be covered on a compulsory basis by pension social insurance to receive only the basic part of a pension:
3) clergymen of traditional and other religious communities and associations recognised by the State as well as the nuns and monks working only in a convent and monastery;
5. The permanent residents of Lithuania, as they are defined in the Law on Personal Income Tax (hereinafter referred to in this paragraph as “permanent residents of Lithuania”) who are not listed in subparagraph 1 of paragraph 1 of this Article and who receive income under commission agreements from the insurer which is a Lithuanian entity, as this concept is defined in the Law on Personal Income Tax (hereinafter referred to in this paragraph as the “Lithuanian entity”), shall be covered, on a compulsory basis, by social pension insurance for the basic and supplementary parts of a pension (subparagraph 1 of Article 3 of this Law), by sickness and maternity social insurance (subparagraph 2 of Article 3 of this Law) and by health insurance (subparagraph 5 of Article 3 of this Law), with the exception of the cases when such income is earned in pursuit of individual activities. The permanent residents of Lithuania who receive income from sports activities or from performing activities as these concepts are defined in the Law on Personal Income Tax from the insurer which is a Lithuanian entity and with which they are not linked by employment relations or by the relations in their essence corresponding to employment relations in the same manner as these relations are defined in the Law on Personal Income Tax shall be covered, on a compulsory basis, by social pension insurance for the basic and supplementary parts of a pension (subparagraph 1 of Article 3 of this Law), by sickness and maternity social insurance, where a person is insured to receive only the maternity, paternity and maternity (paternity) benefits (subparagraph 2 of Article 3 of this Law) and by health insurance (subparagraph 5 of Article 3 of this Law), with the exception of the cases when such income is earned in pursuit of individual activities. The permanent residents of Lithuania pursuing appropriate (creative, performing or sports) individual activities shall be subject to provisions of paragraph 3 of this Article.
Note: Provisions of paragraph 5 shall apply to calculation and payment of state social insurance contributions for 2010 and subsequent years.
6. The following persons shall be covered on a compulsory basis only by social insurance of occupational accidents and occupational diseases:
1) pupils of vocational schools, students of higher education institutions as well as the persons posted by local labour exchange offices for vocational training or vocational rehabilitation – during their vocational practice at an agency or undertaking;
2) the persons receiving remuneration for work and placed in social and psychological rehabilitation institutions – during the period of their work;
7. The persons permanently resident in the Republic of Lithuania or an EU Member State who are at least 16 years of age may take out voluntary pension social insurance to receive the basic or the basic and supplementary part of a pension as well as sickness and maternity social insurance to receive sickness and maternity allowances during a period when they are not compulsorily covered by the social insurance of these types or are compulsorily covered by (have taken out) pension social insurance in accordance with the procedure laid down by laws to receive only the basic part of the pension. The procedure for paying social insurance contributions and for concluding agreements shall be laid down by the Government or an institution authorised by it.
8. With the exception of the persons who have attained old-age retirement age, the persons who are compulsorily covered by pension social insurance to receive the basic and supplementary part of a pension shall have the right at their own choice to accumulate a portion of the pension social insurance contribution with pension accumulation companies under the Law on Reform of the Pension System and the Law on the Accumulation of Pensions. Pension contributions for the persons covered by insurance from funds of the State budget shall not be calculated and paid.
Note: Provisions of paragraph 9 shall apply to calculation and payment of state social insurance contributions for 2010 and subsequent years.
Article 5. Duty of the Payment of Social Insurance Contributions and Rates of Social Insurance Contributions
1. The social insurance contributions of the persons indicated in paragraphs 1, 2 and 5 of Article 4 of this Law must be paid by insured persons and insurers.
2. The persons indicated in subparagraph 1 of paragraph 4 of Article 4 shall pay their social insurance contributions themselves, whereas the persons indicated in paragraph 3 of Article 4 shall pay social insurance contributions themselves or these contributions shall be paid by their insurers.
3. The persons indicated in subparagraph 3 of paragraph 4 of Article 4 of this Law shall be insured to receive the basic part of a social insurance pension with state funds. The persons indicated in subparagraphs 5 and 6 of paragraph 2 of Article 4 of this Law shall be insured with state funds only provided they do not have insured income during that period. The persons indicated in subparagraph 3 of paragraph 2 of Article 4 of this Law shall be insured with state funds on half the basic salary of respectively a civil servant or professional service serviceman or half of the remuneration of a person delegated under a delegation contract or half of the remuneration of the President of the Republic. The persons indicated in subparagraphs 4-6 of paragraph 2 of Article 4 of this Law shall, in accordance with the procedure laid down in the rules for the drawing up and implementation of the State Social Insurance Fund budget, be insured with state funds for the basic and supplementary parts of a social insurance pension and covered by unemployment social insurance, and contributions of pension and unemployment social insurance shall be calculated on the minimum monthly salary as approved by the Government.
5. The persons indicated in subparagraph 1 of paragraph 6 of Article 4 of this Law shall, in accordance with the procedure laid down in the rules for the drawing up and implementation of the State Social Insurance Fund budget, be insured with state funds, and contributions of social insurance of occupational accidents and occupational diseases shall be calculated on the minimum monthly salary as approved by the Government. The contributions of social insurance of occupational accidents and occupational diseases for the persons indicated in subparagraphs 2 and 3 of paragraph 6 of Article 4 of this Law must be paid by insurers.
6. The rates of social insurance contributions and amounts (portions) thereof in respect of the specific types of social insurance shall be approved by the Law on the Approval of Indicators of the State Social Insurance Fund Budget.
7. The rate of pension social insurance contributions in respect of the insured persons participating in the accumulation of pensions under the Law on Reform of the Pension System shall be established by the Law on the Approval of Indicators of the State Social Insurance Fund Budget of the relevant year.
Article 6. Establishment of Social Insurance Record
1. Social insurance record shall be established according to the period of payment of calculated social insurance contributions to the Fund and the periods during which sickness, vocational rehabilitation, maternity, paternity, maternity (paternity) allowances, allowances of social insurance of illness resulting from occupational accidents and occupational diseases as well as unemployment social insurance benefits were received from the Fund. The social insurance record of self-employed persons or the persons who receive income from sports activities or from performing activities or under commission contracts shall be established according to the social insurance contributions which have been paid. Where these contributions have been paid from the amount of the minimum monthly salary, the social insurance record of the length of one month shall be acquired. In the cases when the contributions have been paid from the amount falling below or exceeding the amount of the minimum monthly salary, the length of the social insurance record shall be considered to be proportionately shorter or longer.
Article 7. Income on Which Social Insurance Contributions Shall be Calculated
1. The social insurance contributions in respect of the insured persons indicated in paragraph 1 and subparagraphs 1 and 2 of paragraph 2 of Article 4 of this Law shall be calculated on the aggregate amount of remuneration as calculated for every insured persons, which may not be less than the minimum monthly salary, and on the compensatory or incentive benefits related to employment relations, the income received from sports activities, from performing activities and/or the income received under commission contracts, regardless of the sources of payment, including:
1) the basic remuneration as calculated for an insured person and all additional earnings (specific hourly wage rates; monthly salaries; increased wage rates as compared to ordinary conditions; remuneration for preparation for travel and settlement at a new place; other forms of remuneration for work; other benefits relating to employment relations) specified in the Labour Code and other legal acts as calculated in any manner by the insurer for the insured person for the work performed by him;
2) the remuneration as calculated for an insured person and consisting of the basic salary, bonuses, and additional pays specified in the Law on Civil Service as well as the legal acts regulating the payment of these benefits;
3) the remuneration as calculated for an insured person and specified in the Law on the Remuneration of State Politicians and State Officials as well as the Law on the Remuneration of Judges;
4) the bonuses and severance pays as calculated for the persons indicated in paragraphs 1 and 2 of Article 4 of this Law;
5) the compensations calculated for annual and special leave (with the exception of maternity leave, paternity leave and leave to care for a child under three years of age) as well as the monetary compensations calculated for unused annual leave or for lay-off;
2. Social insurance contributions in respect of the persons referred to in paragraph 3 of Article 4 of this Law shall be calculated as follows:
1) the base of social insurance contributions in respect of the owner of an individual enterprise, also a general partner of a partnership shall comprise an amount declared by the individual enterprise or the partnership in accordance with the procedure laid down by the Fund Board in conjunction with the State Tax Inspectorate under the Ministry of Finance and co-ordinated with a local office of the Fund Board and a local state tax inspectorate, which is taken during a calendar year for the personal needs of the owner of the individual enterprise or the general partner of the partnership and which, during a month of the calendar year, may not fall below the minimum monthly wage. These provisions shall not apply where the individual enterprise or the partnership temporarily does not pursue its activities and has declared this fact in accordance with the procedure laid down by the Law on Tax Administration and the implementing legal acts;
2) the base of social insurance contributions in respect of the persons pursuing individual activities as defined by the Law on Personal Income Tax shall consist of an amount equivalent to 50 per cent of the taxable income from the individual activities (prior to deduction of compulsory health insurance and state social insurance contributions). The base of social insurance contributions in respect of farmers and their partners, in the case when the economic size of an agricultural holding, for the tax period of the previous year from 1 January until 31 December, exceeds 14 European Size Units, shall comprise the aggregate amount of the taxable income from each person’s agricultural activities (prior to deduction of compulsory health insurance and state social insurance contributions), however it may not fall below the amount of 12 minimum monthly wages and may not exceed 12 amounts of insured income of the current year as approved by the Government of the Republic of Lithuania. The base of social insurance contributions in respect of the farmers and their partners, in the case when the economic size of an agricultural holding, for the tax period of the previous year from 1 January until 31 December, is equal to or less than 14 European Size Units, shall be the aggregate amount of 12 minimum monthly wages.
Note: Provisions of paragraph 2 shall apply to calculation and payment of state social insurance contributions for 2010 and subsequent years.
3. In compliance with subparagraph 1 of paragraph 1 of Article 4 and paragraph 5 of Article 4 of this Law, social insurance contributions shall be calculated and paid on a compulsory basis from the income received from sports activities and/or performing activities and/or from the income received under commission contracts. In the case indicated in paragraph 5 of Article 4 of this Law, the base of social insurance contributions shall consist of 50 per cent of the income received from sports activities and/or performing activities and/or from the income received under commission contracts.
Note: Provisions of paragraph 3 shall apply to calculation and payment of state social insurance contributions for 2010 and subsequent years.
4. The base of social insurance contributions in respect of the persons referred to in paragraph 2 of this Article (with the exception of farmers and their partners), also in respect of the persons referred to in paragraph 5 of Article 4 of this Law during a calendar year may not exceed 48 amounts of insured income of the current year as approved by the Government of the Republic of Lithuania, and the monthly base of these contributions may not exceed 4 amounts of insured income of the current year as approved by the Government of the Republic of Lithuania.
Note: Provisions of paragraph 4 shall apply to calculation and payment of state social insurance contributions for 2010 and subsequent years.
Note: Provisions of paragraph 5 shall apply to calculation and payment of state social insurance contributions for 2010 and subsequent years.
Article 8. Income on Which and Cases When Social Insurance Contributions Shall not Calculated
1. Social insurance contributions shall not be calculated on:
1) the amount of an allowance paid to an insured person by the employer upon the death of the insured person’s spouse, children (adopted children), parents (adoptive parents) as well as in the cases of natural disasters, fires and explosions, provided it does not exceed 5 minimum monthly salaries. The amount from which social insurance contributions shall not be calculated shall be increased by as many times as there are the deceased family members of the insured person as indicated in this subparagraph for whom an allowance is paid;
2) an allowance paid by the insurer upon the death of an insured person to his spouse, children (adoptive children) or parents (adoptive parents);
3) benefits for the rent of an apartment, electricity, heat, hot and cold water supply, utilities and communications services, use of personal means of transport, catering of employees as well as the benefits intended to compensate for expenses of the employees whose work is performed during a travel, in field conditions, is related to driving or is of a movable nature and paid in the amount and in the cases specified by laws;
4) the benefits intended to cover postings’ expenses and not subject to personal income tax as well as postings’ expenses for the persons travelling abroad on business, where only the forward and return journey is paid for (including the execution of a visa, insurance against an illness and other compulsory expenses related to the crossing of state borders), paid in the amount and in the cases specified by laws;
5) the benefits as specified by laws to reimburse for material damage as a result of mutilation, other impairment to health or the death of the breadwinner;
6) the amounts paid by undertakings, agencies and organisations for the training, improvement of qualification and retraining of employees. Scholarships or other additional benefits relating to the training, improvement of qualification or retraining of employees and paid to an employee shall not be attributed to these amounts;
7) sickness allowances as paid from the insurer’s funds for the first two days of illness. This provision shall not apply to the benefits paid due to temporary incapacity for work to the persons listed in subparagraphs 1 and 2 of paragraph 2 of Article 4 of this Law;
10) the insurer’s funds paid for the vaccination of employees against contagious diseases and compulsory preventive health examination of the employees;
11) the amounts awarded by courts and recovered to reimburse for pecuniary and non-pecuniary damage;
12) the scholarships, allowances and compensations of students and pupils of educational establishments intended to cover travel and learning (studies) expenses, where they are paid from the funds of the state budget and municipal budgets of the Republic of Lithuania, funds of the non-profit entities established in accordance with the procedure laid down by laws of the Republic of Lithuania and foreign states in accordance with the procedure laid down by laws, if the recipient of a scholarship is not a member or employee of the entity which pays the scholarship and if such a scholarship does not relate to the work or services performed or intended to be performed for these entities by the recipient of the scholarship;
15) the compensations paid for the maintenance of the spouses and children (adopted children) of civil servants or servicemen in professional military service who have moved abroad together with the mentioned persons;
16) the compensations for the expenses related to working abroad as paid to civil servants, delegated persons and servicemen in professional military service, also a mission’s employees who are members of the diplomatic staff or administrative and technical staff;
17) the compensations and other benefits received from an international institution or an institution of the European Union or from a foreign institution, also the remuneration received from the mentioned institutions, provided social insurance contributions are calculated thereon according to the legal acts on the basis whereof the institutions pay the remuneration;
18) the compensations paid to employees for the use of musical instruments, where the creative workers of theatres and concert agencies use for their creative activities the musical instruments belonging to them by the right of personal ownership;
19) insurance premiums paid for the benefit of employees by the insurer in respect of additional (voluntary) health insurance where such premiums cover the payment of health care services provided in respect of the insured person;
20) the insurance premiums paid by the employer to an insurance undertaking for employees’ life assurance, insurance against accidents or civil liability insurance, where an insurance contract provides for the payment of insurance, in the event of an insured event, to the employer, and in the case of civil liability insurance – to the employer or to a third party;
21) the monthly benefits paid by the Lithuanian Academy of Sciences to its members for the title of a member of the Lithuanian Academy of Sciences and the Professor Emeritus’ monthly benefits paid by schools of higher education in the amount established by a university’s senate;
22) the value of the income received by an employee from the employer in kind, which shall exempt from personal income tax under the Law on Personal Income Tax;
23) pension benefits paid from an undertaking’s pension funds or from the funds allocated for this purpose to former employees;
24) insurance premiums whose payment is compulsory under laws of the Republic of Lithuania for a supplementary life assurance and health insurance of an employee;
25) the average salary paid to an employee dismissed from work for a period of delay where settlement with the employee is delayed not through the fault of the employee;
27) the remuneration paid to authors and owners of related rights in return for the use of works and objects of related rights under the issued licences for the use of works or objects of related rights, also on the compensation paid to the authors and owners of related rights for the lending of books to libraries, reproduction of works by means of reprography and reproduction of works and objects of related rights for personal use, and the income received from the transfer or granting, under a licensing agreement, of the right to use an object of industrial property.
Note: Provisions of subparagraph 27 of paragraph 1 shall apply to calculation and payment of state social insurance contributions for 2010 and subsequent years.
2. The persons pursuing individual activities under a business certificate shall be permitted not to pay social insurance contributions (this period shall not be included in the social insurance record), where these persons:
1) receive the social insurance old-age or social insurance work incapacity (invalidity) pension as awarded under the Law on State Social Insurance Pensions;
2) receive the social assistance pension or social assistance compensation, with the exception of the orphan’s social assistance pension awarded under the Law on State Social Assistance Benefits;
3) receive the old-age or work incapacity (invalidity) pension related to social insurance relations (social insurance pension) from an EU Member State, another state of the European Economic Area, the Swiss Confederation or from a country with which the Republic of Lithuania has concluded a treaty on social security;
4) are in imprisonment institutions or have been imposed, by a court’s judgement in accordance with the procedure laid down by the Criminal Code, compulsory medical treatment measures of in-patient observation or reformative sanctions in specialised mental health care institutions;
3. Where the economic size of an agricultural holding for the tax period of the previous year from 1 January until 31 December is equal to, or smaller than, 14 European Size Units, farmers and their partners shall be permitted not to pay social insurance contributions in the cases provided for in subparagraphs 1-3 of paragraph 2 of this Article (this period shall not be included in the social insurance record).
Article 9. Payment of Social Insurance Contributions
1. The social insurance contributions of the insurer and an insured person shall be calculated, deducted and paid to the Fund by the insurer of the day when the insured person commences to work, regardless of the date of registration of the insurer at a local tax inspectorate. Social insurance contributions for the persons indicated in subparagraph 3 of paragraph 2 of Article 4 of this Law shall be paid by the state institution which has transferred or posted a civil servant to a position at a diplomatic mission, consular post of the Republic of Lithuania, mission of the Republic of Lithuania at an international organisation, international institution or an institution of the European Union or a foreign state’s institution, sent on a special mission or assigned a serviceman in professional military service to fulfil military service at a diplomatic mission, consular post of the Republic of Lithuania, mission of the Republic of Lithuania at an international organisation, a foreign state’s or international military or defence institution, also the delegating institution of the Republic of Lithuania which has delegated the person, the Office of the President of the Republic. Social insurance contributions shall be paid from the appropriations of the state budget of the Republic of Lithuania approved for state institutions. Social insurance contributions shall be paid from the appropriations of the state budget of the Republic of Lithuania approved for state institutions. In respect of the persons receiving income under commission contracts, also the persons receiving income from sports and/or from performing activities (subparagraph 1 of paragraph 1 and paragraph 5 of Article 4 of this Law), the insurer’s and insured person’s social insurance contributions to the Fund shall be calculated, deducted and paid by the insurer on the day of payment of an appropriate remuneration, which shall be considered the day of commencement of a person’s social insurance.
2. The insurer shall pay calculated social insurance contributions not later than by the 15th day of the next month, with the exception of the cases specified in this Law.
3. Agricultural companies, agricultural cooperative societies and farmers may pay social insurance contributions for employees to the Fund in advance at the time specified in the agreements signed by the insurer and a local office of the Fund Board, but not later than by the 15th day of November. Only an agreement on settlement for the current calendar year may be signed per calendar year.
4. The social insurance contributions of the persons indicated in paragraph 3 and subparagraph 1 of paragraph 4 of Article 4 of this Law shall be paid as follows: individual enterprises shall pay the contributions for owners of these enterprises, general partnerships and limited partnerships – for their members of the registration of an individual enterprise or partnership in the Legal Entities Register, other self-employed persons shall pay the social insurance contributions which they must pay to an account of a local office of the Fund Board from the commencing of activities until completion of activities. The persons holding business certificates shall pay social insurance contributions for the period of validity of a business certificate.
5. Social insurance contributions for owners of individual enterprises, members of general partnerships, farmers and their partners shall be paid once a month not later than by the last day of the current month. Other persons indicated in paragraph 3 of Article 4 of this Law shall have the right to calculate and pay social insurance contributions in advance and pay them once a month not later than by the last day of the current month. The monthly social insurance contributions in respect of the farmers and their partners, in the case when the economic size of an agricultural holding, for the tax period of the previous year from 1 January until 31 December, is equal to or less than 14 European Size Units, shall be calculated and paid, on a compulsory basis, on the amount of the minimum monthly wage. The monthly social insurance contributions in respect of the farmers and their partners, in the case when the economic size of an agricultural holding, for the tax period of the previous year from 1 January until 31 December, exceeds 14 European Size Units, shall be calculated and paid, on a compulsory basis, on the amount of their own choice, which may not fall below the minimum monthly wage, nor exceed the monthly amount of insured income of the current year as approved by the Government of the Republic of Lithuania. The social insurance contributions paid in advance shall not be repaid and adjusted. Where the base of social insurance contributions depends on a person’s income earned during the previous year, the social insurance contributions (a difference between the amount of the contributions which have been paid and the contributions which are to be paid) must be paid by the last day of a time limit laid down for filing an annual income tax return with the State Tax Inspectorate.
Note: Provisions of paragraph 5 shall apply to calculation and payment of state social insurance contributions for 2010 and subsequent years.
6. The persons intending to obtain business certificates for a period shorter than three months must pay social insurance contributions in advance for the entire period of validity of a business certificate. The persons who have acquired business certificates for three months or for a longer period shall pay social insurance contributions within the time limits laid down in paragraph 5 of this Article. In the case when a person who has paid social insurance contributions is not issued a business certificate or the accumulated personal income tax overpayment is repaid for the issued business certificate, the amount of social insurance contributions shall be repaid to the person or included in the future period in the cases and in accordance with the procedure laid down by the rules for the drawing up and implementation of the budget of the State Social Insurance Fund.
7. Social insurance contributions of the persons indicated in subparagraphs 4-6 of paragraph 2, subparagraph 3 of paragraph 4 and subparagraph 1 of paragraph 6 of Article 4 of this Law shall be paid from funds of the State budget by the managers of the appropriations allocated from the state budget as indicated in the Law on the Budget Structure.
8. The persons indicated in paragraph 7 of Article 4 of this Law shall pay social insurance contributions to an account of a local office of the Fund Board. The amount of contributions shall be established by the agreements concluded in accordance with the procedure laid down by the Government.
Article 10. Submission and Safekeeping of Notifications of Calculated Social Insurance Contributions
1. In order to correctly calculate social insurance contributions and social insurance benefits, data shall be accumulated in the Republic of Lithuania register of the persons covered by state social insurance and recipients of state social insurance benefits on insured persons insurers, and recipients of the social insurance contributions. The procedure for accumulating and using these data shall be laid down by the Government or an institution authorised by it.
2. Insurers must submit financial statements, reports about the amounts and social insurance contributions calculated for insured persons and other documents required for the calculation of social insurance contributions and social insurance record. The sample forms of the statements, reports and other documents as well as the time limits of and procedure for submitting them shall be laid down by the Government or an institution authorised by it.
Article 11. Social Insurance Benefits
Social insurance benefits shall mean the benefits provided for in the Law on State Social Insurance Pensions, the Law on Sickness and Maternity Social Insurance, the Law on Social Insurance of Occupational Accidents and Occupational Diseases and the Law on Unemployment Social Insurance.
SECTION THREE
RIGHTS, DUTIES AND RESPONSIBILITY OF INSURERS, INSURED PERSONS AND RECIPIENTS OF SOCIAL INSURANCE BENEFITS
Article 12. Right to Obtain Information
1. Insurers, insured persons and recipients of social insurance benefits shall have the right to obtain the information accumulated about them in the information system of the administration of the Fund.
2. Information about an insurer, insured person or recipient of a social insurance benefit may be provided to other persons only subject to written consent or request of the insurer, insured person or recipient of the social insurance benefit, with the exception of the cases specified by laws when the consent of the insurer, insured person or recipient of social insurance benefits is unnecessary. The procedure for providing information shall be laid down by the Fund Board.
Article 13. Processing of Data about Insurers, Insured Persons and Recipients of Social Insurance Benefits
Data about an insurer, insured person or recipient of a social insurance benefit as submitted to the administration agencies of the Fund must be processed under the Law on Legal Protection of Personal Data and other legal acts.
Article 14. Duties of Insurers
1. All insurers must be registered at local state tax inspectorates in accordance with procedure laid down by the Law on Tax Administration.
2. Insurers must calculate and pay social insurance contributions correctly and timely according to the rates and within the time limits specified by this Law and other laws.
Article 15. Duties of Insured Persons and Recipients of Social Insurance Benefits
Insured persons and recipients of social insurance benefits must submit, in accordance with the procedure laid down by the laws regulating social insurance and other legal acts, the correct information required to effect social insurance to the administration agencies of the Fund.
Article 16. Liability for Untimely and Incorrect Payment of Social Insurance Contributions
1. Late payment interest shall be calculated for a delay in the transfer of social insurance contributions to the Fund. The calculation of late payment interest shall commence on the next day following the day on which social insurance contributions had to be paid until the day when the social insurance contributions were paid inclusive. Late payment interest may not be calculated for a period exceeding 180 days of the rise of the right to enforce the recovery of the social insurance contributions. The amount of the late payment interest and procedure for paying it shall be established by the Minister of Finance.
2. Where during a verification it is established that social insurance contributions have been unlawfully reduced, the amount of social insurance contributions which is underpaid shall be calculated and a penalty charge in the amount of 50% amount shall be imposed. In this case, the late payment interest provided for in paragraph 1 of this Article shall not be calculated. Where an insurer has noticed that he has calculated too little social insurance contributions, but has corrected errors voluntarily, paid the unpaid amount of social insurance contributions, submitted adjusted reports and notified of the insured income of insured persons prior to the date indicated in an instruction to verify the insurer (where there is no instruction – prior to the beginning of the verification), no penalty charge shall be imposed for the infringement committed. In this case, late payment interest shall be calculated in accordance with the procedure laid down in paragraph 1 of this Article.
3. The Fund Board or, in the cases provided for in subparagraph 17 of Article 31 of this Law, a local office thereof may, in accordance with the procedure laid down in the rules for the drawing up and implementation of the budget of the State Social Insurance Fund, defer the payment of arrears in social insurance contributions to the Fund for a period of up to one year and allow to pay the deferred amount according to a schedule for the payment of the arrears as agreed upon by an insurer and administration agency of the Fund. Where the payment schedule is violated, the recovery of the penalty charge shall be enforced.
4. The Fund Board or, in the cases provided for in subparagraph 17 of Article 31 of this Law, a local office thereof may, in accordance with the procedure laid down by the rules for the drawing up and implementation of the State Social Insurance Fund budget, postpone the recovery of the late payment interest calculated for insurers in respect of a delay in the transfer of social insurance contributions.
5. The Fund Board may, in accordance with the procedure laid down in the rules for the drawing up and implementation of the budget of the State Social Insurance Fund, exempt an insurer from the payment of the calculated late payment interest and/or penalty charges where the insurer proves that he has calculated too little social insurance contributions as a result of the circumstances beyond his control which he has not predicted and has not been able to predict.
6. Local offices of the Fund Board may defer the recovery of penalty charges for a period of up to one year by establishing a schedule for the payment of a penalty charge in accordance with the procedure laid down by the rules for the drawing up and implementation of the budget of the State Social Insurance Fund. Where the payment schedule is violated, the recovery of the penalty charge shall be enforced.
7. The period of limitation for the enforced recovery of the social insurance contributions unpaid to the Fund by insurers and insured persons as well as calculated late payment interest and penalty charges shall be five years.
8. The right to enforce the recovery of contributions, late payment interest and penalty charges shall arise as of the day following the day whereon the social insurance contributions, late payment interest and penalty charges ought to have been paid. The period of limitation for enforced recovery shall be calculated beginning with the day on which the right to enforce the recovery of the delayed social insurance contributions, penalty charges and late payment interest arises. The period of limitation for enforced recovery shall apply solely to the arrears in social insurance contributions, penalty charges and late payment interest arising from 1 January 2005.
9. Upon the expiry of the period of limitation for enforced recovery of the delayed social insurance contributions, the period of limitation for the recovery of related late payment interest and/or penalty charges which have been calculated shall expire too.
10. In the event of initiation of procedures of the enforced recovery of delayed social insurance contributions, late payment interest and penalty charges in the ways indicated in Article 17 of this Law, they shall be completed, and the calculation of the period of limitation for enforced recovery shall be terminated. Calculation of the terminated period of limitation for enforced recovery shall commence anew as of the disappearance of the circumstances which provided a basis for termination of the period of limitation for enforced recovery. The period preceding termination of the period of limitation shall not be included in the duration of the new period of limitation.
11. Data on insured income and social insurance contributions may be adjusted for a period not exceeding five years of the day of an insurer’s application. At the request of an insured person, data on insured income and social insurance contributions shall, upon the insurer’s payment for the insured person of the social insurance contributions due, be adjusted without having regard to the period of five years. This time limit shall neither apply to a transfer to the Fund of funds in respect of the pension rights acquired by a person from the pension scheme of the institutions of the European Communities under the Law of the Republic of Lithuania on Preservation and Transfer of the Pension Rights of Officials of the Institutions of the European Communities and of Members of the European Parliament.
12. Prior to submitting adjusted statements (reports) and information about a larger income of insured persons for the past period, an insurer must pay to the Fund unpaid social insurance contributions and late payment interest according to the amounts valid during that period.
13. When verifying, calculated social insurance contributions, penalty charges and late payment interest must be paid within the time limits laid down by the Law on Tax Administration.
14. Where the insurer delays the payment of the additionally calculated social insurance contributions as indicated in a verification statement, late payment interest shall be calculated as of the day following the day of entry into force of a decision of the State Tax Inspectorate on approval of the verification statement.
Article 17. Ways of Enforcement of the Recovery of Social Insurance Contributions, Penalty Charges and Late Payment Interest
1. Local offices of the Fund Board may enforce the recovery of the social insurance contributions, late payment interest and penalty charges not paid on time in the following ways:
1) by instructing a credit institution to write off the unpaid social insurance contributions, late payment interest and penalty charges from an insurer’s account in the credit institution in accordance with the procedure laid down in Article 754 of the Code of Civil Procedure;
2) by instructing the debtor’s employer, the payer of a pension, scholarship or allowance to recover the unpaid social insurance contributions, late payment interest and penalty charges to the Fund;
3) by instructing a credit institution to write off unpaid social insurance contributions, late payment interest and penalty charges from an insurer’s deposits with the credit institution and the payable interest;
2. To ensure the recovery of a debt, local offices of the Fund Board may:
1) to instruct credit institutions of the Republic of Lithuania to discontinue the disbursement as well as transfer of funds from insurers’ accounts where they are indebted and do not pay social insurance contributions for a period exceeding 3 months;
2) apply for the registration of compulsory mortgage of an insurer’s property in accordance with the procedure laid down in the Code of Civil Procedure;
Article 18. Liability for the Damage Incurred to the Fund
1. The legal or natural persons through the fault whereof the administration agencies of the Fund have unlawfully paid to insured person certain benefits or the unlawful (guilty) actions whereof have incurred other property damage to the Fund must compensate for the damage in accordance with the procedure laid down by laws.
2. Where social insurance benefits have been unlawfully paid through the fault of their recipients, the overpayment shall, by a decision of the director of a local office of the Fund Board, be recovered in respect of any social insurance benefit received by the recipient and paid to this person from the funds of the Fund. The recovered amount may not exceed per month 50% of the amount of social insurance benefits to which the recipient is entitled. Where the person does not receive any social insurance benefits, the overpayment shall be recovered in court.
Article 19. Finances of the Fund and Assets Accounted for in the Budget of the Fund
1. The finances of the Fund shall be based on an independent budget of the State Social Insurance Fund of the Republic of Lithuania, which shall not be included in state, municipal and other budgets.
2. The short-term and long-term assets acquired for funds of the Fund or obtained from other entities free of charge shall be accounted for in the budget of the Fund. These assets shall be owned by the State and may be used only for the needs of social insurance and with a view to supplementing the budget of the Fund with additional revenue. In the event of transfer of these assets to other state institutions and agencies, the Fund must be compensated for value thereof.
3. The drawing up and implementation of the budget of the Fund and financial statements shall be regulated by the Law on the Structure of the Budget of the State Social Insurance Fund and the rules for the drawing up and implementation of the budget of the State Social Insurance Fund.
Article 20. Relations between the Budget of the Fund and the State Budget
1. Appropriations shall be allocated from the state budget where expenditure in respect of a type of social insurance increases or revenue decreases as a result of the legal acts adopted by the Seimas or the Government, whereas the rates of social insurance contributions for this type of social insurance remain unchanged or change insignificantly.
2. Appropriations from the state budget or other state funds may be allocated for the expenditure related to the reform of the pension system to compensate for the amounts of social insurance contributions transferred to the pension funds managed by pension accumulation companies.
Article 21. Relations of the Administration Agencies of the Fund with Credit Institutions and Other Agencies, Undertakings and Organisations
1. Credit institutions of the Republic of Lithuania and other agencies, undertakings or organisations shall circulate the funds of the Fund free of charge.
2. A credit institution must comply with an instruction of an administration agency of the Fund to write off unpaid social insurance contributions, late payment interest and penalty charges from an account opened by a person with this credit institution within the time limit laid down by the Law on Payments for execution of a payment order. A credit institution must comply with an instruction of the administration agency of the Fund to write off unpaid social insurance contributions, late payment interest and penalty charges from a deposit account opened by the person with this credit institution together with the interest payable to the person at the initial request of the depositor or the expiry of the term of the deposit. An instruction of an administration agency of the Fund to write off unpaid social insurance contributions, late payment interest and penalty charges from an account opened by a person with this credit institution must be accepted and executed also where the insurer’s account contains no funds or an amount smaller than the amount to be written off. In that case, the write off shall be effected in instalments until the whole amount specified is written off from the insurer’s account. An instruction of an administration agency of the Fund to write off unpaid social insurance contributions, late payment interest and penalty charges from a deposit account opened by a person with this credit institution together with the interest payable to this person must be accepted and executed also where the insurer’s deposit amount is less than the amount to be written off. In such a case, the instruction to write off the social insurance contributions, late payment interest and penalty charges which have not been paid on time shall be executed in the amount equivalent to the person’s deposit together with the payable interest. Administration agencies of the Fund shall reduce the amount to be written off as specified in the instruction given to the credit institution if the social insurance, undisputable late payment interest and undisputed penalty charges contributions which have not been paid on time are partly covered in another manner. In this case, administration agencies of the Fund shall immediately inform the credit institution about the reduction of the claim, and the latter shall execute the instruction with regard to the updated amounts.
3. Where a credit institution receives the instruction of an administration agency of the Fund to enforce the write-off of unpaid social insurance contributions, late payment interest and penalty charges from an insurer’s account and a corresponding bailiff order or a decision by another state institution concerning enforced recovery and there are not enough funds in the insurer’s account to comply with all the aforementioned decisions or instructions, the credit institution must execute the instruction of the administration agency of the Fund, taking into account the priority of writing off funds laid down in Article 754 of the Code of Civil Procedure and the date of submission of the said documents. Where in the case provided for in paragraph 2 of this Article an administration agency of the Fund updates the amount to be written off, the date of submission of the instruction shall remain the same.
Article 22. Relations between the Fund Board and Funds
1. The Fund Board shall transfer received unemployment social insurance contributions as well as additionally recovered unemployment social insurance contributions to an account of the Lithuanian Labour Exchange within the time limits and in accordance with the procedure laid down by the rules for the drawing up and implementation of the budget of the Employment Fund.
2. The Fund Board shall transfer, in accordance with the procedure laid down by the Law on Health Insurance, the compulsory health insurance contributions established by the Law on Health Insurance and received as well as additionally recovered insurance contributions payable under compulsory health insurance to an account of the budget of the Compulsory Health Insurance Fund of the State Patients’ Fund. The Fund Board may effect settlements with the budget of the Compulsory Health Insurance Fund by mutual offset of the compulsory health insurance contributions of the amount specified by the Law on Health Insurance and the social insurance contributions of the health care institutions financed from the budget of the Compulsory Health Insurance Fund.
Article 23. Late Payment Interest of the Administration Agencies of the Fund
The administration agencies of the Fund shall pay late payment interest for a delay in the transfer of funds for the payment of maternity and sickness social insurance allowances or of cumulative pension contributions to pension accumulation companies through the fault of the administration agencies of the Fund. The amount of late payment interest shall be determined according to the norm established by the Minister of Finance and applied in respect of a delay in tax payment. The calculation of late payment interest shall commence on the day when an insurer who had not received funds from the Fund in time paid this benefit to its recipient from its own funds or on which the time limit as laid down by the Law on the Accumulation of Pensions for the transfer of cumulative pension contributions to pension accumulation companies expires and shall continue until the transfer of the amount of these benefits paid by the insurer or the amount of the cumulative pension contributions unpaid to the pension accumulation companies.
Article 24. Social Insurance Management System, Participants and the Management Structure of the Fund
1. The social insurance management system shall comprise:
2. Participants of the social insurance system shall be:
Article 25. Functions of the Ministry of Social Security and Labour in the Social Insurance Management System
In performing the functions of social insurance management and implementing the state policy in this field, the Ministry of Social Security and Labour shall:
2) analyse whether the guarantees provided by social insurance meet the interests of the state as well as insured persons and recipients of benefits;
3) draft and submit to the Government the legal acts related to the implementation of social insurance policy;
Article 26. Fund Council
1. The Fund Council shall be a collegial institution formed on the basis of equal tripartite co-operation to consider and taking decisions on the issues of the implementation of social insurance policy.
3. The Fund Council shall consist of the equal number of the members having equal rights and representing the organisations protecting the interests of insured persons, employers’ organisations and state institutions.
4. Representatives of insured persons and employers shall be delegated by represented organisations by common accord, and representatives of state institutions shall be appointed by the Government. The composition of the Fund Council shall be approved by the Government on the recommendation of the Minister of Social Security and Labour.
5. The Chairman of the Fund Council shall be in charge of activities thereof according to the principle of rotation. He shall be elected by members of the Fund Council for a period of six months.
6. Decisions of the Fund Council shall be taken by the majority of votes of members thereof. Where the number of votes is equal, the Chairman of the Fund Council shall have the decisive vote.
9. The Fund Council may have public advisers. Their number shall be determined by the regulations of the Fund Council.
Article 27. Sphere of Competence of the Fund Council
The Fund Council shall:
1) consider and submit proposals and conclusions to the Ministry of Social Security and Labour regarding the implementation of the legal acts regulating social insurance and the carrying out of activities of the Fund Board;
2) submit proposals and conclusions to the Ministry of Social Insurance and Labour on the draft laws regulating social insurance;
3) submit proposals to the Ministry of Social Security and Labour on the rates of social insurance contributions, allocation of appropriations from the state budget and formation of the reserve of the Fund;
4) consider and submit proposals to the Fund Board regarding insurers’ applications for deferral of the payment of arrears in social insurance contributions or late payment interest exceeding LTL 100 000;
5) consider and submit to the Fund Board and the Ministry of Social Security and Labour a conclusion on the draft budget of the Fund and a report on the implementation thereof;
6) submit a conclusion to the Ministry of Social Security and Labour on results of the audit of the budget of the Fund and audit of the activities of the Fund Board;
7) according to the methodology approved by it, approve the insured income of the past year and establish the insured income of the current year, which shall be approved by the Government in accordance with the established procedure;
8) pursuant to the Law on Social Insurance of Occupational Accidents and Occupational Diseases, approve the assignment of every insurer to a specific group of the rate of contributions;
Article 28. Fund Board
1. The Fund Board shall be a public administration agency organising social insurance, carrying out operational management of the funds of the Fund and keeping accounts thereof by ensuring the collection and recovery to the Fund of calculated social insurance contributions, penalty charges and late payment interest, correct processing of data about insured persons and the awarding and payment of the social insurance benefits as specified by laws to recipients thereof. The Fund Board shall be a budgetary body having a seal with its name and the Lithuanian state emblem inscribed therein, a stamp with its name and design approved in accordance with the procedure laid down by laws inscribed therein, settlement and special fund accounts with the credit institutions registered in the Republic of Lithuania and drawing up the financial reports of the budget of the Fund and financial reports reflecting the costs of activities of the administration agencies of the Fund.
2. The Fund Board shall be established by the Government or an institution authorised by it, be financed from the Fund and act according to this Law and the regulations of the State Social Insurance Fund Board as approved by the Minister of Social Insurance and Labour.
3. The Fund shall be administered by the Fund Board headed by the Director. He shall be appointed through competition and dismissed from office by the Minister of Social Security and Labour in accordance with the procedure laid down by the Law on Civil Service. The Director of the Fund Board shall be directly accountable to the Minister of Social Security and Labour.
Article 29. Functions and Rights of the Fund Board
1. In organising social insurance and implementing the budget of the Fund, the Fund Board shall:
1) draft and submit, upon agreement with relevant state institutions, to the Ministry of Social Security and Labour a draft budget of the Fund as well as a report on the implementation thereof accompanied by a conclusion of the Fund Council;
2) within its sphere of competence, administer social insurance contributions, ensure the correct calculation and awarding of the social insurance benefits specified in the legal acts regulating social insurance and organise the timely payment of social insurance benefits;
3) conclude agreements with legal or natural persons on the performance of the functions of social insurance;
4) co-ordinate and ensure an efficient and quality work of local offices and other agencies of the Fund Board and control them;
5) organise, in accordance with the procedure laid down by the Government, the social insurance of the persons indicated in paragraph 7 of Article 4 of this Law;
6) account to the Minister of Social Security and Labour and the Fund Council for activities of the Fund and submit information about the implementation of the budget of the Fund;
8) process the data of the insured persons participating in the accumulation of pensions under the Law on the Accumulation of Pensions and pension accumulation agreements;
9) organise the transfer of cumulative pension contributions to the pension funds managed by pension accumulation companies and selected by insured persons as well as transfer of social insurance contributions to an account of the budget of the Compulsory Health Insurance Fund and an account of the Lithuanian Labour Exchange;
10) establish and approve the number of positions of civil servants and employees of the administration agencies of the Fund;
13) organise the training of civil servants and employees of the administration agencies of the Fund;
14) ensure the correct and timely awarding and/or payment of the benefits specified by laws and other legal acts from the state budget;
15) examine the complaints filed by insured persons, insurers, recipients of social insurance benefits and personal health care institutions regarding the actions carried out and decisions taken by civil servants and employees of the administration agencies of the Fund;
16) organise and carry out verifications of the validity, lawfulness and correctness of establishment of temporary incapacity for work and long-term and permanent incapacity for work (invalidity), provide methodical and practical assistance on these issues to local offices of the Fund Board;
17) submit proposals to the Ministry of Social Insurance and Labour on the improvement or amendment of social insurance legal acts;
18) issue instructions to the administration agencies of the Fund on the application of the legal acts regulating the awarding and payment of benefits;
19) submit to the State Tax Inspectorate the information required to ensure the control of calculation of social insurance contributions;
20) in the cases specified by Regulation (EEC) No 1408/71 of the Council and Regulation (EEC) No 574/72 of the Council as well as other cases specified by the international treaties concluded by the Republic of Lithuania on social security, act as a competent authority and ensure the implementation of these treaties;
21) consider, interpret and solve the issues related to the application of the legal acts regulating social insurance;
2. The Fund Board shall have the right:
1) in accordance with the procedure laid down by laws, to purchase, sell, rent or lease the property required for the performance of social insurance functions;
2) in accordance with the procedure laid down by laws, to purchase securities and manage as well as dispose of them;
3) in accordance with the procedure laid down by laws, to conclude agreements with the economic entities of the Republic of Lithuania and foreign countries;
5) in accordance with the procedure laid down by laws, to establish the undertakings or agencies related to the performance of social insurance functions or assisting in the performance thereof as well as to approve regulations thereof;
6) to abandon in agreement with the Fund Council or to transfer, in accordance with the procedure laid down by the Fund Board, all, or part of, creditors’ financial claims ;
7) after co-ordination with the Fund Council , to implement measurers with a view to receiving additional income;
8) to defer the payment of arrears in social insurance contributions for insured persons for a period of up to one year and the time limit for the recovery of calculated late payment interest on the social insurance contributions for the insured persons which have been transferred with a delay, to exempt from late payment interest and penalty charges;
9) declare arrears in social insurance contributions, late payment interest and penalty charges as bad debts where they cannot be recovered for objective reasons or it is unfeasible socially and/or economically to enforce recovery thereof in the cases when: no property of a payer of the social insurance contributions is identified or the property identified is non-liquid (of small liquidity); expenses of enforced recovery exceed tax arrears; it is unfeasible to enforce the recovery of arrears because of difficulties in the economic (social) position of a natural person: the natural person needs state support (he has attained retirement age, he is disabled (before 1 July 2005 – invalid), the person requires medical treatment, preventive medical care and rehabilitation, the person is unemployed, he receives social benefits) or such support is already provided;
10) in accordance with the procedure laid down by the Government or an institution authorised by it, to dispute the correctness of establishment of a level of capacity for work (work incapacity), reason therefor, time of occurrence and term;
11) when performing its functions, to obtain required information and data in accordance with the procedure laid down by laws;
Article 30. Local Offices and Other Agencies of the Fund Board
1. Local offices of the Fund Board shall be the local bodies established by the Fund Board whose main task shall be operational management of funds of the Fund to ensure the timely collection and recovery to the Fund of calculated social insurance contributions and the correct awarding and payment of social insurance benefits to recipients thereof. Local offices of the Fund Board shall be subordinate and accountable to the Fund Board. A local office of the Fund Board shall be headed by a director. He shall be appointed and dismissed from office by the Director of the Fund Board in accordance with the procedure laid down by the Law on Civil Service.
2. Local offices of the Fund Board shall be financed from funds of the Fund and act under this Law and the regulations of local offices and other agencies of the State Social Insurance Fund as approved by the Fund Board.
3. Local offices of the Fund Board shall be established to perform the functions of social insurance taking account of customer flows and their needs. Activities of the local offices of the Fund Board shall be regulated by regulations thereof.
4. Local offices of the Fund Board shall be budgetary bodies having a seal with their name and the Lithuanian state emblem inscribed therein, a stamp with the name and design approved in accordance with the procedure laid down by laws inscribed therein, settlement and special fund accounts with the credit institutions registered in the Republic of Lithuania and drawing up financial reports reflecting the costs of activities and financial reports of a local office of the Fund Board.
Article 31. Functions of Local Offices of the Fund Board
Local offices of the Fund Board shall:
1) control the payment of calculated social insurance contributions, penalty charges and late payment interest and enforce the recovery of the social insurance contributions, penalty charges and late payment interest not paid in time;
3) keep accounts of insured persons and control the validity of changing data in the records of insured persons as well as issue to the persons the social insurance certificates of the set form;
4) analyse indicators of social insurance, implement measures to improve these indicators and submit relevant proposals to the Fund Board;
5) in accordance with the procedure laid down by the Fund Board, account for funds of social insurance;
7) enforce the recovery from insurers of the funds paid by them from the Fund in breach of the established procedure;
8) in accordance with the procedure laid down by laws, recover the amounts of pensions, allowances and other benefits overpaid through the fault of recipients;
9) document and store the files of recipients of pensions, allowances or other benefits, issue to them the certificates of the set form;
11) consider applications and examine complaints on the issues of social insurance, assist, in special cases, the applicants in obtaining the documents required for the awarding of a pension or allowance;
12) in accordance with the procedure laid down by laws, award and pay benefits from funds of the state budget;
13) under an agreement with the management institutions of a municipality, pay benefits of social nature from municipal budgets;
14) control the lawfulness and validity of the issuance and extension of work incapacity certificates, vocational rehabilitation certificates and maternity leave certificates (lawfulness and validity of establishment of temporary incapacity for work);
15) verify and, in accordance with the procedure laid down by the Government or an institution authorised by it, dispute the validity and correctness of establishment of a level of capacity for work (work incapacity), reason therefor, time of occurrence and term thereof;
16) in accordance with the procedure laid down by the Fund Board, accumulate data on the social insurance record and the record held equivalent to it as acquired by the persons who have not attained old-age retirement age as well as the insured income and income held equivalent to it as received by them;
17) defer the recovery of penalty charges (with the exception of the penalty charges imposed in accordance with the Code of Administrative Offences) for a period of up to one year, the payment of arrears in social insurance contributions for self-employed persons for a period of up to one year and the recovery of the late payment interest calculated in respect of a delay in the transfer of social insurance contributions for the self-employed persons;
18) in accordance with the procedure laid down by legal acts, submit data about an insurer, insured person or recipient of a social insurance benefit;
19) conclude agreements with the persons indicated in paragraph 7 of Article 4 of this Law and manage the record file data of these persons;
Article 32. Functions of the State Tax Inspectorate in the Social Insurance System
The State Tax Inspectorate shall, on the grounds specified and in accordance with the procedure laid down by the Law on Tax Administration, perform the following functions related to the control of calculation of social insurance contributions and examination of disputes:
1) register insurers and provide to them information about the duties of payment of the social insurance contributions;
2) verify the calculation of insurers’ and insured persons’ social insurance contributions as well as the payment of these contributions to the extent it is related to the insurers subject to verification, impose penalty charges for the violations established during verification;
4) examine tax disputes regarding the amounts of social insurance contributions calculated anew and the penalty charges imposed after verification;
5) have the right to represent the interests of the Fund in undertakings, public establishments against which bankruptcy or restructuring proceedings have been opened according to the creditor’s rights granted under the Enterprise Bankruptcy Law and the Law on Restructuring of Enterprises subject to mutual agreement of the State Tax Inspectorate under the Ministry of Finance and the Fund Board;
6) provide to the Fund Board and local offices of the Fund Board the information required to effect social insurance. The procedure for controlling social insurance contributions and providing information shall be laid down by the State Tax Inspectorate under the Ministry of Finance after co-ordination with the Fund Board.
Version of Article 33 before 1 January 2013:
Article 33. Functions of the Lithuanian Labour Exchange in the Social Insurance System
The Lithuanian Labour Exchange under the Ministry of Social Security and Labour shall:
1) have at its disposal the funds obtained from the Fund in accordance with the procedure laid down by laws and the Minister of Social Security and Labour, allocate them to local labour exchanges to finance labour market policy instruments and exercise the control of use thereof;
2) in accordance with the procedure laid down by laws, award and pay unemployment social insurance and other payments provided for;
Version of Article 33 after 1 January 2013:
Article 33. Functions of the Lithuanian Labour Exchange in the Social Insurance System
The Lithuanian Labour Exchange at the Ministry of Social Security and Labour shall, in accordance with the procedure laid down by the law, calculate and grant unemployment social insurance benefits.
Article 34. Functions of the State Patients’ Fund in the Social Insurance System
The State Patients’ Fund under the Ministry of Health shall:
1) in accordance with the procedure laid down by legal acts, have at its disposal the funds received from the Fund;
Article 35. Functions of Pension Accumulation Companies
Pension accumulation companies shall:
1) in accordance with the procedure laid down by legal acts, conclude a data provision agreement with the Fund Board;
2) in accordance with the procedure laid down by laws, conclude pension accumulation agreements with the persons willing and entitled to become participants in the accumulation of pensions and notify the administration agencies of the Fund of concluded and terminated pension accumulation agreements;
Article 36. Rights of the Administration Agencies of the Fund
1. The Fund Board and local offices of the Fund Board shall have the right to verify the documents supporting the social insurance contributions and social insurance benefits administered by them.
2. Civil servants of the administration agencies of the Fund shall, in performing the functions assigned to them under this Law, have the right:
1) to obtain free of charge from undertakings, agencies and organisations as well as other persons, including credit institutions, the information, clarifications and extracts of social insurance documents as required for the performance of their duties;
2) to enter, without prior request and after presenting an official certificate, an insurer’s premises (including rented premises) or territory related to his activities. Entrance to the insurer’s premises or territory (including rented ones) without prior notice shall be possible only during the insurer’s working hours. In other cases, the insurer’s consent shall be required;
3) to temporarily – for a period not exceeding 30 calendar days – seize from an insurer the documents recording the income from employment on which social insurance contributions are calculated as well as social insurance benefits paid from funds of the Fund, leaving a writ of the seizure of the documents (in this case, the insurer must be allowed to make copies of the documents taken);
4) to temporarily – for a period not exceeding 30 calendar days - to stamp the areas used for the safekeeping of documents, securities, money and material valuables (where possible, without disturbing an insurer’s activities), make copies of or extracts from documents, and mark the insurer’s documents to prevent their falsification;
6) in compliance with the Code of Administrative Offences, to draw up records of administrative offences regarding the offences whose solution falls within the sphere of competence of civil servants of the administration agencies of the Fund;
8) to obtain from an insurer the clarifications regarding the payment of social insurance contributions and social insurance benefits, the clarifications regarding the social insurance data submitted by the insurer as well as the clarifications of the persons located in the insurer’s territory regarding employment relations, where there are grounds to believe that they actually work there;
9) to draw up statements of established violations regarding the calculation of social insurance benefits, compensation for the damage incurred to the Fund or payment of arrears to recipients as well as meeting of other requirements of this Law;
3. The Director of the Fund Board and deputies thereof, directors of local offices of the Fund Board and deputies thereof shall have the right:
1) to enforce the recovery of the social insurance contributions as well as late payment interest and penalty charges not paid in time from insurers’ accounts with credit institutions of the Republic of Lithuania;
2) to instruct credit institutions of the Republic of Lithuania to discontinue the disbursement as well as transfer of funds from insurers’ accounts where they are indebted and do not pay social insurance contributions for a period exceeding 3 months;
3) in accordance with the procedure laid down by laws, to impose administrative penalties. The pecuniary penalties imposed shall be recovered to the budget of the Fund;
4) to refer to heads of undertakings, agencies and organisations regarding the circumstances and conditions preventing the civil servants of the administration agencies of the Fund from properly performing their duties. The heads of the undertakings, agencies and organisations must consider instructions of the civil servants of the administration agencies of the Fund and immediately notify an administration agency of the Fund of the measures taken;
5) to instruct the debtor’s employer, the payer of a pension, scholarship or allowance to recover to the Fund unpaid social insurance contributions, late payment interest and penalty charges from the debtor’s work remuneration, pension, scholarship or allowance;
6) to submit to the Legal Entities Register’s manager proposals on the initiation of the liquidation of an insurer in the cases specified by the Civil Code;
4. The Director of the Fund Board and deputies thereof shall have the right:
1) to apply for the registration of compulsory mortgage of an insurer’s property in accordance with the procedure laid down in the Code of Civil Procedure;
2) to seize the insurer’s property, where social insurance contributions, penalty charges and/or late payment interest have not been paid to the Fund;
3) to waive the recovery of overpayment of a social insurance benefit, where it is not possible to recover the overpaid amount of the benefit in accordance with the procedure laid down by legal acts or where it has accrued not through the fault (dishonesty) of the recipient of the benefit and it is not possible to recover it, in accordance with the procedure laid down by legal acts, from the persons guilty thereof (successors to their rights and duties) or where it is not possible to recover it due to objective reasons or it is unfeasible to recover it from the social and/or economic perspective, in the cases when: no property of a person is identified or the property identified is non-liquid (of small liquidity); expenses of recovery exceed the amount of the benefit overpaid; it is unfeasible to recover the amount of the benefit overpaid because of difficulties in the economic (social) position of a natural person: the natural person needs state support (he has attained retirement age, he is disabled (before 1 July 2005 – invalid), the person requires medical treatment, preventive medical care and rehabilitation, the person is unemployed, he receives social benefits) or such support is already provided.
5. Directors of local offices of the Fund Board and deputies thereof shall have the right to take decisions on the recovery of the social insurance benefits and other benefits overpaid through the fault of recipients of social insurance benefits, where their awarding and payment is assigned to these local offices, without laying down any time limit.
6. Civil servants or employees of the administration agencies of the Fund shall, in exercising the rights granted and performing the duties assigned to them by laws, document the actions carried out. Forms of the documents (a writ, certificate, instruction, resolution, appeal, etc.) and the procedure for filling them in shall be established by the Fund Board.
Article 37. Appeals against Decisions and Actions of the Administration Agencies of the Fund
1. Insurers, insured persons as well as other persons concerned (hereinafter referred to in this Article as “concerned persons”) shall have the right to appeal against the decisions and acts (omissions) of the local offices of the Fund Board and other agencies of the Fund relating to administration of the State Social Insurance Fund to the Fund Board. The Fund Board shall be the mandatory institution for advance out-of-court settlement of disputes.
2. The appeals filed to the Fund Board against decisions and acts (omissions) of local offices of the Fund Board and other agencies of the Fund relating to administration of the State Social Insurance Fund shall be examined where they have been filed within 20 working days from the day when a person concerned learned or ought to have learnt about the completion (non-completion) of an action appealed against or adoption of a decision, and the appeals filed against a failure to adopt a decision – within 20 working days of the expiry of a time limit laid down for the adoption of the decision. A time limit laid down for the filing of an appeal may, where the appeal has not been filed within the time limit for important reasons supported by relevant documents, be extended by a decision of the Director of the Fund Board or deputy thereof. The procedure for examining appeals by the Fund Board shall be laid down by the Director of the Fund Board.
3. An appeal filed within the time limits laid down in paragraph 2 of this Article must be examined by the Fund Board, and a decision thereon must be adopted not later than within 20 working days from the receipt of the appeal. This time limit may be extended for another period of up to 20 working days where an additional investigation is required to examine the appeal. A person concerned must be given written notice thereof.
4. Having examined the appeal, the Fund Board may satisfy it in full or in part, and shall also have the right to dismiss the appeal. A decision adopted by the Fund Board through the advance out-of-court dispute settlement procedure may be appealed against to court.
5. The decisions and acts (omissions) of the Fund Board (with the exception of those provided for in paragraph 4 of this Article) may be appealed against to the Chief Administrative Disputes Commission or to court in accordance with the procedure laid down in the Republic of Lithuania Law on Administrative Proceedings.
6. Appeals against the decisions adopted by local offices of the Fund Board on pension issues shall be filed and considered in accordance with the procedure laid down by the Law on State Social Insurance Pensions and the Regulations for the Awarding and Payment of State Social Insurance Pensions.
7. Insurers’ appeals regarding the amounts of social insurance contributions additionally calculated, the penalty charges imposed and other actions by officials of the State Tax Inspectorate in the course of verification shall be examined in accordance with the procedure laid down by the Law on Tax Administration.
8. Disputes on the pension social insurance record, on insured income and on the income held equivalent to it shall be examined by court.
9. The administration agencies of the Fund shall be exempt from the payment of stamp duty in all cases when they perform the functions assigned to them by laws and other legal acts.
REPUBLIC OF LITHUANIA
CHAIRMAN OF THE SUPREME COUNCIL VYTAUTAS LANDSBERGIS
Annex to the Republic of Lithuania
Law on State Social Insurance
LEGAL ACTS OF THE EUROPEAN UNION IMPLEMENTED BY THIS LAW
1. Regulation (EEC) No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons and their families moving within the Community.