Agricultural pension

The insured party (farmer, member of the household), will be entitled to receive an agricultural pension if the following conditions are met:

the party reached the retirement age, which, as of 1 October 2017, is 60 years for women and 65 years for men*,
the party was covered by pension and annuity insurance for a period of at least 25 years. The period of pension and annuity insurance is the period of farmers’ social insurance as of 1 January 1991.

The law on farmers’ social insurance also provides for a possibility of granting an agricultural pension to an insured farmer if, by 31 December 2017, such farmer met all of the following conditions:The law on farmers’ social insurance also provides for a possibility of granting an agricultural pension to an insured farmer if, by 31 December 2017, such farmer met all of the following conditions:

the farmer reached the age of 55, if the farmer is a woman, or 60, if the farmer is a man,
the farmer was covered by to pension and annuity insurance for a period of at least 30 years,
the farmer ceased his agricultural activities.

The periods of pension and annuity insurance, upon which the granting of the right to agricultural pension depends, also include the following periods:

a period of social insurance for individual farmers and members of their family for the period1983-1990,
the operation of the agricultural holding or work on the agricultural holding after the age of 16, before 1 January 1983,
upon which the granting of the right to a retirement pension pursuant to pension laws depends. The pension laws are the provisions of the law of 17 December1998 on old-age and disability pensions from the Social Insurance Fund (Journal of Laws [DzU] of 2017, item 1383, as amended).

The aforesaid periods shall not be included in the insurance coverage if they have been included in the periods, upon which the right to a pension or annuity pursuant to separate provisions of law depends.

When establishing the right to the agricultural pension, the periods of insurance other than the agricultural insurance shall not be included in the case of persons born after 31 December 1948 – the amendment introduced by the act of 21 November 2008 on the capital retirement pensions (Journal of Laws [DzU] of 2018, item 926).

Therefore, the right to agricultural pension shall be vested in a person who is covered by the farmers’ social insurance and who, apart from the required age and discontinuation of agricultural activities (in the case of the 'earlier' agricultural pension), may prove at least a 25 or 30-year-long period of agricultural insurance only.

In the case of persons born after 31 December 1948, the periods of insurance other than social insurance are not taken into account when establishing the amount of the agricultural pension. However, a person who reaches retirement age, acquires the right to the agricultural pension (i.e. able to prove at least 25-year-long period of pension and annuity insurance) and workplace pension, shall be entitled to receive both types of benefits.

*Legal basis: Article 2(3) of the act of 16 November 2016 amending the act on old-age and disability pensions from the Social Insurance Fund and some other acts (Journal of Laws [DzU] of 2017, item 38).

The farmer ceases his agricultural activities

The discontinuation of agricultural activities constitutes grounds for payment of the additional part of the agricultural retirement pension or agricultural pension due to incapacity for work.

The right to an agricultural pension and annuity may be obtained on the condition that the farmer has been covered by a period of pension and annuity insurance for the required amount of time, has reached a certain age (in the case of an agricultural pension) or has become completely unfit for work on the agricultural holding (in the case of an agricultural pension due to incapacity for work). Therefore, the acquisition of the right to a pension and annuity insurance does not depend on the discontinuation of the agricultural activities. However, if the pensioner or annuitant or their spouse is the owner (co-owner) or is in the possession of the agricultural holding, the payment of agricultural pension or annuity shall be partially withheld (the suspension of payment refers to the additional part of the retirement pension or annuity and – in the case of benefits granted before 1 January 1991 – to the part that constitutes 95% of the basic retirement pension).

The suspension of payment of a retirement pension or agricultural pension, if the beneficiary conducts agricultural activities, is recognised in Article 28 of the law on farmers’ social insurance. The above provision exhaustively clarifies the rules of withholding payment of an agricultural pension and annuity insurance, whereas section 4 thereof defines the concept of discontinuation of agricultural activities for the purpose of such withholding.

In compliance with the statutory definition, it is recognised that the pensioner or annuitant discontinued their agricultural activities if they or their spouse is not the owner (co-owner) or holder of the agricultural holding within the meaning of the regulations on agricultural tax or holder of special branches of agricultural production, excluding:

1. lands leased on the basis of a written contract concluded for at least 10 years and registered in the land and property register to a person who is not:

a) married to the pensioner or annuitant,

b) a descendant (child, grandchild) or stepchild of the pensioner or annuitant,

c) a member of the same household of the pensioner or annuitant,

d) married to a person mentioned in points (b) or (c),

2. lands permanently excluded from agricultural production pursuant to separate provisions of law, including afforested agricultural lands,

3. lands and special branches of agricultural production owned by the spouse, with whom the pensioner or annuitant entered into marriage after establishing the right to agricultural pension or annuity due to incapacity for work,

4. ownership (share in the joint ownership) not established on the basis of relevant official documents if the lands being the subject of such ownership (joint ownership) are not in possession of the farmer or their spouse.

In compliance with the act of 15 November 1984 on agricultural tax (Journal of Law [DzU] of 2017, item 1892), the agricultural holding means, for agricultural tax purposes, the lands classified in the land and property register as cultivated lands or wooded lands on cultivated lands, excluding areas used for business activity other than agricultural activity, with the total area of over one physical hectare or one conversion hectare, which constitute the property or which are in the possession of a natural person or legal person or organisational unit without legal personality.

Therefore, while determining whether the agricultural activities discontinued (and therefore whether it is possible to pay the additional part of the pension and annuity insurance), the Farmer's Social Security Fund [KRUS] applies the provisions of Article 28(4) of the law on farmers’ social insurance. To satisfy the condition of discontinuing agricultural activities, the pensioner (annuitant) should transfer the ownership and possession of the agricultural holding to another person.

Below are the most frequent forms of transferring the ownership title to the agricultural holding:

deed of donation – the owner of the agricultural holding transfers to the beneficiary the ownership title and possession of the agricultural holding free of charge,
life estate agreement – the owner of the agricultural holding transfers the ownership title to the agricultural holding free of charge and ensures that the person who assumes such ownership shall provide them with lifelong assistance and care (lifelong support),
sales agreement – the owner of the agricultural holding transfers the ownership title to the agricultural holding to a new owner, who takes over the agricultural holding for the agreed price.

If the pensioner or annuitant wishes to dispose of the ownership title to the agricultural holding, but cannot find a purchaser, the agricultural holding may be taken over against payment by the State Treasury through the agricultural property agency.

The agricultural holding is taken over upon the request of the owner of the lands, yet only in the event when the farmer or their spouse has the right to pension and annuity insurance, but failed to sign the agreement with the successor, and therefore may not sell the properties included in the agricultural holding at a price at least corresponding to the estimate price according to the regulations on the management of agricultural properties of the State Treasury. The agricultural holding is purchased and the price thereof determined on the basis of an administrative decision.

The pensioner or annuitant who does not wish to dispose of the ownership title to the agricultural holding shall satisfy the condition of discontinuing agricultural activities if they lease the agricultural holding to another natural or legal person. However, for the lease agreement to constitute grounds for payment of the additional part of the agricultural pension or annuity, the farmer must meet the requirements provided for in the law on farmers’ social insurance (i.e. the above-described requirements) in addition to the conditions stipulated in the Civil Code. On the basis of the lease agreement, the owner of the agricultural holding does not dispose of the ownership title to such agricultural holding, but transfers possession thereof to another party for a specified period. Therefore, the lease agreement does not have to be in the form of a notarial deed, but, for the purposes of farmers’ social insurance, it should be executed in writing. Additionally, for the lease agreement to have a legal effect, it must be registered in the land and property register. The fact of registration in the land and property register should be included in the agreement and confirmed by an authorised employee of a competent body responsible for such register.

Pursuant to the decision of the Supreme Court of 18 January 2012 (case no II UK 82/11), the signing of a lease agreement with a child is also allowed. Parents leasing an agricultural holding to their child must declare that they do not conduct any agricultural activities thereon.

The pensioner or annuitant shall immediately inform the Farmer's Social Security Fund about each case of termination of the lease agreement or change of lessee, for whatever reason, before the end of the period for which such agreement was concluded.

The pensioner or annuitant should also inform the Farmer's Social Security Fund about marriage contracted between the lessee of the agricultural holding and the lessor’s daughter or son.

In the case of termination of the lease agreement, the agreement may be re-executed, however, in order to constitute grounds for the payment of a full pension or annuity, it must meet all of the above-mentioned conditions, and therefore the new lease agreement must also be concluded for a period of least 10 years.

It should be noted that it is in the best interest of the pensioner or annuitant that an appropriate document confirming the transfer of the agricultural holding (notarial deed, lease agreement, administrative decision) was submitted with the regional and local offices of the Farmer's Social Security Fund, which is responsible for paying pensions or annuities. The aforesaid document shall be deemed to be the application for payment of additional part of the agricultural pension or annuity.

In compliance with the provisions of the law on farmers’ social insurance, the suspended payment of the additional part of the agricultural pension/annuity shall be resumed upon request.

The law on farmers’ social insurance also stipulates that in specifically defined cases, 50%,75% or 100% of the additional part of the agricultural pension or annuity shall be paid even if the pensioner or annuitant has not ceased his agricultural activities.

The additional part of the agricultural pension or annuity shall be paid at 50% in the following situations:

the pensioner or annuitant is completely unfit for work due to a work accident that occurred on the agricultural holding or due to an agricultural occupational disease, however with the stipulation that after the expiry of 2 years from the date of such accident or disease, the additional part be entirely withheld unless the beneficiary ceases their agricultural activities before the expiry of that period or other circumstances emerge allowing the payment of the additional part of the agricultural pension or annuity,
the pensioner has been receiving their agricultural pension due to incapacity for work for a period no longer than 2 years.

The additional part of the agricultural pension or annuity shall be paid at 75% if:

the pensioner or annuitant has not signed any agreement with the successor and is unable to sell the properties included in the agricultural holding at a price at least corresponding to the estimate price thereof, pursuant to the regulations on the management of agricultural properties of the State Treasury, or
the procedure to expropriate or purchase the aforesaid properties for the purposes justifying such expropriation or to permanently exclude the lands from agricultural production pursuant to separate provisions of law is still ongoing, or
the properties are located in the protection zone or other special area created pursuant to separate provisions of law, in connection with the restrictions introduced on the use of agricultural lands or for protective purposes.

The additional part of the agricultural pension or annuity shall be paid at 100% if:

the pensioner or annuitant entitled to a pension in the general retirement age conducts agricultural activities jointly with their spouse, who is covered by the statutory pension and annuity insurance. The payment of the additional part of the agricultural pension or annuity shall not be suspended for a period of 1 year if the pensioner (annuitant) commences their agricultural activities on the following lands:
lands acquired by inheritance or
lands previously leased for a period of at least 10 years if the lease was terminated earlier due to reasons beyond the control of the lessor or
lands recovered as a result of the termination of the agreement (due to reasons beyond the control of the pensioner or annuitant), based on which the pensioner or annuitant previously sold such lands, or as a result of annulment of the administrative decision.

The period of 12 months is counted from the month following the month, in which the above-mentioned circumstances occurred. If, after such period, the pensioner or annuitant does not prove that they ceased agricultural activities on the aforesaid lands or the circumstances allowing the payment of the additional part of the agricultural pension or annuity do not occur, the additional part shall be entirely or partially suspended.

However, if the agricultural activities are discontinued by transferring the agricultural holding to a minor, on the basis of a notarial deed, the payment of the additional part of the agricultural pension or annuity shall be entirely suspended until such person reaches the age of 18. The decisions issued by the Farmer's Social Security Fund in matters concerning the discontinuance of agricultural activities shall be subject to the right of appeal to the Regional Court – Labour and Social Security Court.