Double standards applied by the Social Insurance Institution?

In February 2021, a draft amendment to the Act on Social Insurance System and certain other Acts was submitted for public consultation.

The Bill provides for many changes, but at this point, I would like to direct my attention to amendments to the Act on Cash Allowances from Social Insurance in the Event of Sickness or Maternity (the so-called Allowance Act), which are to affect entrepreneurs and contractors.

According to the current wording of:

– Article 48(2) of the Allowance Act:

“2. When determining the base for calculation of a sickness allowance due to an insured non-employee, the provisions of Articles 36(2)-(4), 38(1), 42, 43 and 46 shall be applied accordingly, subject to Articles 48a-50”,

– Article 52 of the Allowance Act:

“When determining the base for calculation of a rehabilitation allowance, maternity allowance or care allowance, the provisions of Articles 36(2)-(4), 38(1), 42, 43, 48(1) and 48a to 50 shall be applied accordingly, and in the case of a rehabilitation allowance, the provisions of Articles 19(2) and 46 shall also be applied“.

In the Bill prepared by the Ministry of Family and Social Policy, the said provisions are to read as follows:

– Article 48(2)

“2. When determining the base for calculation of a sickness allowance due to an insured non-employee, the provisions of Articles 36(2)-(4), 38(1), 42, 43 and 46 shall be applied acc, the provisions of Articles 36(2)-(4), 38(1), 42 and 46 shall be applied accordingly, subject to Articles 48a-50”,

– Article 52

“When determining the base for calculation of a rehabilitation allowance, maternity allowance or care allowance, the provisions of Articles 36(2)-(4), 38(1), 42, 48(1) and 48a to 50 shall be applied accordingly, and in the case of a rehabilitation allowance, the provisions of Articles 19(2) and 46 shall also be applied”.

On the face of it, the amended provisions look identical to those currently in force. However, as a well-known saying goes, the devil is in the details.

Well, the application of Article 43 is to be excluded from both Article 48(2) and Article 52 of the Allowance Act.

This seemingly small change brings about considerable and, worse still, unfavorable changes for non-employees – since the rules for calculating sickness, maternity and rehabilitation allowance are to change.

Currently, Article 43 of the Allowance Act applies to all groups of the insured, according to which: “The base for allowance calculation shall be not determined anew if there has been no break between periods of receiving allowances of both the same and different types or where a break has been shorter than 3 calendar months”.

The exclusion of the application of the above-quoted provision will mean for all non-employees who pay sickness insurance contributions that in the event of, for example, a severe illness and the need first to take sick leave, and then, after 182 days, benefit from a rehabilitation allowance, the latter will be then calculated from a significantly lower base than the contribution base indicated by that non-employee. In the same situation, an employee hired based on an employment contract will receive benefits calculated from the same base.

As a result of the planned changes, women – entrepreneurs planning to expand their families will be especially disadvantaged. Despite paying higher contributions to sickness insurance for 12 months, in a situation where, due to their health condition, they will be forced to take sick leave during pregnancy, the maternity allowance paid afterward will be calculated from a lower base than the declared one. The new regulations will also apply in the case of changing the type of allowance received, even if there has been no single day of a break between the received allowances.

Due to changes in the regulations, not only those who have deliberately inflated the contribution amounts but also honest payers who, even though they have declared high income, have reasons to take leave will lose. Even if they pay high sickness insurance contributions to the Social Insurance Institution, their contribution base will be lower with each subsequent allowance and, therefore, they will also receive a smaller allowance.

The planned changes are totally incomprehensible – the Bill lacks any justification why, for example, women running a business should have worse conditions for determining, among other things, a maternity allowance than women working under an employment contract. They are all the more incomprehensible in the context of the information provided by the ministry about the reasons for and the need to implement the solutions planned in the Bill: “The purpose of the Bill is to organize and rationalize the social insurance system, including to unify the rules of being subject to retirement and disability pension insurance and introduce uniform solutions for granting and paying benefits, as well as improve the operation of the Social Insurance Institution in the context of financial management and settlements with contribution payers. At the stage of applying the regulations in force, interpretation discrepancies have also occurred, which the project eliminates”.

The exclusion of the application of Article 43 of the Allowance Act in the case of one group of the insured (non-employees) while keeping this provision with respect to employees is certainly not “introducing uniform solutions for granting and paying benefits”. The proposed changes should be assessed negatively – because they are highly unfavorable for insured non-employees, and they will hit entrepreneurial women the hardest.

Marta Strzecha-Bociąga, Attorney-at-law