Kasa Rolniczego
Ubezpieczenia Społecznego

New provisions on the coordination of social security systems in EU Member States entered into force on 1 May 2010. Regulation (EEC) No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the European Union (OJ L 149, 5.7.1971, as amended), previously in force, has been amended and updated on numerous occasions due to developments at EU level (taking into account judgments of the Court of Justice of the European Union) and changes in national legislation. This has made the EU coordination rules complex and excessively lengthy. It has thus become necessary to modernise and simplify these rules to ensure the effective exercise of the right of free movement of persons. New regulations, adopted by the European Parliament and the Council of the European Union, have therefore been drawn up. These are:

• Regulation (EC) No 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems (OJ L 166, 30.4.2004, p. 1, as amended; ‘Regulation No 883/2004’,
• Regulation (EC) No 987/2009 of the European Parliament and of the Council of 16 September 2009 laying down the procedure for implementing Regulation (EC) No 883/2004 on the coordination of social security systems (OJ L 284, 30.10.2009, p. 1; ‘Regulation No 987/2009’), which on 1 May 2010 replaced Regulation (EEC) No 574/72 of the Council of 21 March 1972 fixing the procedure for implementing Regulation (EEC) No 1408/71 on the application of social security schemes to employed persons and their families moving within the European Union (OJ L 74, 27.3.1972, as amended; ‘Regulation No 574/72’), previously in force.

Compared with the previous provisions, cash benefits subject to EU coordination have been extended to include equivalent paternity benefits and pre-retirement benefits. The current EU provisions apply to:

• sickness benefits,
• maternity and equivalent paternity benefits,
• invalidity benefits,
• old-age benefits,
• survivors’ pensions,
• benefits in respect of accidents at work and occupational diseases,
• death grants,
• unemployment benefits (does not apply to the Agricultural Social Insurance Fund (Kasa Rolniczego Ubezpieczenia Społecznego, KRUS)),
• pre-retirement benefits (does not apply to the KRUS),
• family benefits.

The new EU measures do not introduce any fundamental changes in the coordination of social security systems of EU Member States. They are based on the same coordination rules and techniques as Regulation No 1408/71 was, namely:

• The principle of equal treatment. Equal treatment of persons means that persons subject to the EU coordination of social security systems enjoy the same benefits and are subject to the same obligations under the legislation of any Member State as the nationals thereof. The EU provisions preclude discrimination against these persons both in access to social insurance in other Member States and in the receipt of benefits provided for by the legislation of these countries.

The EU provisions also provide for equal treatment of events or facts occurring in the territory of other Member States and of benefits and income acquired in other Member States.

Equal treatment of benefits and income means that if, under the legislation of the competent Member State, the receipt of benefits under social insurance schemes and the generation of other income have certain legal effects, the relevant provisions of that legislation also apply to the receipt of benefits under the legislation of another Member State or to income acquired in another Member State. Thus, when applying provisions on the suspension of the right to a farmer’s old-age pension or disability pension in a situation where the old-age pensioner (this applies to persons who have not reached the age of 60 for women and 65 for men) or disability pensioner generates revenue from activities subject to compulsory social insurance, the KRUS will take into account also revenues generated outside Poland, including in EU Member States and European Free Trade Association (EFTA) countries.

Equal treatment of events and facts means that if, under the legislation of the competent Member State, the establishment or cessation of the right to a specific benefit is conditional on the occurrence of certain facts or events, the Member State should take into account similar facts or events occurring in any Member State as though they had taken place in its own territory. This means that, when examining an application for a disability pension for incapacity for work on an agricultural holding, the KRUS will take into account the fact that the applicant became completely incapable of working on an agricultural holding during a period of insurance in another EU Member State or European Free Trade Association country as though this incapacity had arisen while that person had been subject to farmers’ social insurance.

The principle of retention of acquired rights, which means that cash benefits payable under the legislation of one or more Member States or under the EU provisions are not subject to any reduction, amendment, suspension, withdrawal or confiscation on account of the fact that the beneficiary or the members of his or her family reside in a Member State other than that in which the institution responsible for providing these benefits is situated.

The principle of aggregation of periods of insurance (employment, self-employment, residence), set out in Article 6 of Regulation No 883/2004. The principle means that the institution of the Member State, whose legislation makes:

• the acquisition, retention, duration or recovery of the right to benefits,
• the coverage by legislation, or
• the access to or the exemption from compulsory, optional continued or voluntary insurance

conditional upon the completion of periods of insurance, employment, self-employment or residence takes into account, to the extent necessary, periods of insurance, employment, self-employment or residence completed under the legislation of any other Member State as though they were periods completed under the legislation which it applies, provided that these periods do not overlap with ‘own’ periods.

Regulation No 883/2004 does not introduce new arrangements regarding the determination of the right to old-age pensions and, like the previous provisions, provides that periods of insurance completed in another Member State, as well as events and facts which occurred in another Member State must be taken into account. This means that periods of insurance completed in Poland and in another EU/EFTA Member State may be aggregated if the period of social insurance in Poland is not sufficient to obtain the right to a pension benefit.

In such a situation, the old-age pension or disability pension is paid in proportion to the period of social insurance completed in Poland.

Regulation No 883/2004 retains the same rules for calculating the amount of pension benefits as in the previous provisions. In line with the above provisions, when determining the amount of farmers’ pension benefits, the KRUS will proceed as follows:

1. if the applicant does not meet the conditions for receiving the farmer’s old-age pension or disability pension on the basis of periods of pension insurance completed in Poland alone, the KRUS will calculate the amount of the benefit by determining the theoretical and then the actual amount of the benefit (pro-rata benefit) in the following way:

• it will determine the theoretical amount of the benefit equal to the benefit to which the person in question would have been entitled if all the periods of insurance (residence) completed
• in other Member States had been completed under the legislation applied by this competent institution,
• it will then calculate the actual amount of the pro-rata benefit and will base the theoretical amount on the proportion of the periods completed under the national legislation to the periods of insurance completed under the national legislation and the legislation of the other Member States in total.

 Example I 

Calculation of the farmer’s old-age pension taking into account the period of insurance completed abroad (the period of pension insurance of 25 years, required in Poland, has not been completed)

The applicant has demonstrated that he has completed the following periods of pension insurance and a period of employment in France:

farmers’ social insurance in Poland – 20 years
employment insurance in France – 6 years,

The applicant will meet the conditions for receiving the farmer’s old-age pension only after the periods of insurance in Poland and France are aggregated (the total number of years of insurance is 26).

Calculation of the amount of the farmer’s old-age pension (independent benefit):

Contributory part: PLN 912.86 x 26% = PLN 237.34 gross (the calculation index for the contributory part is 0.26)

Supplementary part: PLN 912.86 x 92.00% = PLN 839.83 gross (the calculation index for the supplementary part is 0.92)

The gross theoretical amount of the benefit (contributory part + supplementary part), on the basis of which the actual amount of the benefit is determined in proportion to the length of the periods of insurance in Poland and in France, is PLN 1 077.17 gross.

Calculation of the proportionality factor:

240 months of insurance in Poland
........................................................................................................ =0.77
240 months of insurance in Poland + 72 months of insurance in France

The actual amount of the old-age pension (pro-rata benefit): PLN 1 077.17 gross (theoretical amount of the benefit) x 0.77 = PLN 829.42 gross

2) if the applicant meets the conditions for receiving the farmer’s old-age pension or disability pension without the need to take into account the periods of insurance completed in another Member State, the KRUS will calculate the amount of the benefit only on the basis of the periods of pension insurance completed in Poland under the national law (independent benefit) and then will calculate the amount of the pro-rata benefit as described in point 1(a) and (b).

3) the KRUS will compare the amount of the independent benefit and pro-rata benefit and will pay the more favourable one.

Example II

Calculation of the farmer’s old-age pension in a situation where the applicant meets the conditions for receiving the benefit on the basis of periods of insurance completed in Poland.

The applicant has demonstrated that he has completed the following periods of pension insurance and a period of employment in Sweden:

farmers’ social insurance in Poland – 26 years
employment insurance in Sweden – 4 years

The applicant has not ceased to carry out agricultural activities (the supplementary part is suspended in full).

The farmer’s old-age pension without taking the periods of insurance completed abroad into account:

As the period of insurance completed in Poland is 26 years, the person in question meets the conditions for obtaining the right to the Polish farmer’s old-age pension (independent benefit).

Calculation of the amount of the independent old-age pension:

Contributory part PLN 912.86 x 26% = PLN 237.34 gross (the calculation index for the contributory part is 0.26)

Supplementary part PLN 912.86 x 92% = PLN 839.83 gross (the calculation index for the supplementary part is 0.90)

The total amount of the independent old-age pension (contributory part + supplementary part) is PLN 1 077.17 gross

The farmer’s old-age pension pursuant to the EU provisions:

The total period of insurance in Poland and in Sweden is 30 years

Calculation of the amount of the theoretical old-age pension:

Contributory part PLN 912.86 x 30% = PLN 273.86 gross (the calculation index for the contributory part is 0.32)

Supplementary part PLN 912.86 x 90% = PLN 821.57 gross (the calculation index for the supplementary part is 0.90)

The gross theoretical amount of the benefit (contributory part + supplementary part) is PLN 1 095.43 gross

Calculation of the proportionality factor:

312 months of insurance in Poland
.......................................................................................................... = 0.87
312 months of insurance in Poland + 48 months of insurance in Sweden

Contributory part of the pro-rata old-age pension: PLN 273.86 x 0.87 = PLN 238.26 gross

Supplementary part of the pro-rata old-age pension: PLN 821.57 x 0.87 = PLN 714.77 gross

Total amount of the pro-rata old-age pension (contributory part + supplementary part): PLN 1 095.43 x 0.87 = PLN 953.03

As the applicant has not ceased to carry out agricultural activities, the contributory part of the farmer’s old-age pension determined on a proportional basis is paid, as the more favourable benefit. After the person in question ceases to carry out agricultural activities, the KRUS will once again compare the independent old-age pension and the pro-rata old-age pension in full to determine which benefit should be paid as more favourable.

The new EU provisions introduce new rules for determining the right to survivors’ pensions for orphans. The right to the survivor’s pension for an orphan is now determined in accordance with the same rules as the right to the old-age pension or disability pension for incapacity for work. This means that the survivor’s pension for an orphan will now be determined after the death of the insured person who completed periods of insurance in a Member State whose legislation provides for such pensions (for example Poland) and in a Member State whose legislation provides only for special allowances for orphans (for example Belgium or France). Under Regulation No 883/2004, the survivor’s pension for an orphan from two (or more) Member States will be paid in an amount resulting from national provisions (independent benefit) or on a proportional basis. Thus, if periods of insurance completed by a deceased person in Poland would have been insufficient to award that person a pension benefit, the KRUS will take into account, when determining the right to the survivor’s pension for an orphan, the periods of insurance completed in Poland and in other Member States, and will calculate the amount of the pro-rata benefit. If the deceased person would have been entitled to the pension benefit on the basis of the periods of insurance completed in Poland alone (without the need to take the periods of insurance completed abroad into account), the KRUS will calculate the independent survivor’s pension and then the pro-rata survivor’s pension for the orphan, and will pay the more favourable benefit.

In a situation where the person applying for the pension benefit has completed a period of insurance shorter than 1 year in the Member State concerned, the insurance institution of this Member State is not required to award the benefits if the legislation it applies does not provide for any benefits on the basis of this period alone. The period shorter than 1 year will be taken into account by the institutions of other Member States when calculating the amount of the pension benefits determined.

A person who resides in Poland and receives a pro-rata farmer’s pension benefit which is lower than the lowest occupational pension prescribed by the Polish legislation will receive from the KRUS a supplement equal to the difference between the current lowest occupational pension and the sum of the pro-rata old-age pension or disability pension and the pension benefit from another Member State.

As regards death grants, Regulation No 883/2004 retains the rule that if an insured farmer, person receiving the old-age pension or disability pension from the KRUS or an eligible member of that person’s family dies in a Member State other than Poland, the death is deemed to have occurred in Poland. In such a situation, the KRUS will provide the death grant payable under the Polish legislation, even if the person who has borne the funeral costs resides in another Member State. These provisions apply also if the cause of death was an accident at work or an occupational disease.

In accordance with the new EU provisions, the principle of aggregation of periods will continue to apply if the right to sickness and maternity benefits for persons subject to social insurance is determined, on request. The procedure to be followed in matters relating to sickness allowances has changed, however. The most important change is that the person concerned now has to provide a medical certificate directly to the institution responsible for paying a sickness allowance (under the previous provisions, such a certificate could be provided through the institution of the Member State where the person concerned resides).

The provisions of Annex II to Regulation No 883/2004 ‘Provisions of conventions which remain in force and which, where applicable, are restricted to the persons covered thereby (Article 8(1)’ applicable to Poland are the same as those of Annex II to Regulation No 1408/71. Therefore, the following conventions and agreements remain in force and will continue to be applied:

• in Polish-German relations:
  • the Convention of 9 October 1975 on old-age and work injury provisions, under the scope defined by Article 27(2) to (4) of the Convention on social security of 8 December 1990 (maintenance of legal status, on the basis of the Convention of 1975, of persons who established their residence in the territory of Germany or Poland before 1 January 1991 and who continue to reside there);
  • Article 27(5) and Article 28(2) of the Convention on social security of 8 December 1990 (maintenance of entitlement to old-age pensions or disability pensions paid on the basis of the Convention of 1975 concluded between the former German Democratic Republic and Poland; reckoning of periods of insurance completed by Polish employees under the Convention of 1988 concluded between the former German Democratic Republic and Poland).
• in Polish-Austrian relations:
  • Article 37(3) of the Agreement on social security of 28 October 2005 (reckoning of periods of insurance completed before 27 November 1961); the application of that provision remains restricted to the persons covered by it.

The rules to be followed when awarding cash benefits under the social insurance scheme for farmers remain unchanged. The right to these benefits is examined at the request of the person concerned or another person having a legal interest in the determination of this right. Persons who, apart from having completed periods of farmers’ social insurance in Poland, have completed periods of insurance in other EU Member State, countries of the European Economic Area which are not members of the European Union (Iceland, Liechtenstein, Norway) and Switzerland, should submit applications for the farmer’s old-age pension or disability pension to one of the local units of the KRUS listed below. Applications for death grants in the event of death of old-age pensioners or disability pensioners and applications for the transfer of benefits abroad should also be submitted to these units.

For persons residing in a EU Member State/EEA country other than Poland and in Switzerland who apply for examination of the right to the farmer’s disability pension for incapacity for work, medical examinations for the purposes of the KRUS will be performed by the foreign institution having jurisdiction over the applicant’s place of residence.

List of local units of the Agricultural Social Insurance Fund (KRUS)

serving as institutions competent for farmers’ old-age pensions, farmers’ disability pensions for incapacity for work, survivors’ pensions and death grants in the event of death of old-age pensioners, disability pensioners and members of their families to which EU regulations and bilateral international agreements on social security are applicable

 

Item	Local unit of the KRUS	competent for persons who have completed periods of insurance in Poland alone and reside in the following countries: or   have completed periods of insurance in Poland and abroad, including those recently completed in the following countries:
1.	Regional Branch of the KRUS in Kraków – Foreign Benefits Department in Nowy Sącz ul. Młyńska 8 33-300 Nowy Sącz phone: +48 (18) 440 73 03 to 07 fax: +48 (18) 440 72 98 email: nowysacz(at)krus.gov.pl	Australia, Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Greece, Spain, Netherlands, Ireland, Iceland, Canada, South Korea, Lichtenstein, Lithuania, Luxembourg, Latvia, Macedonia, Malta, Moldova, Norway, Portugal, Romania, Slovakia, Slovenia, United States of America, Switzerland, Sweden, Ukraine, Hungary, United Kingdom, Italy
2.	Local Branch of the KRUS in Ostrów Wielkopolski ul. Krotoszyńska 41 63-400 Ostrów Wielkopolski Phone: +48 (62) 736 70 72 to 73, 735 13 37, fax: +48 (62) 736 54 30 email: ostrow(at)krus.gov.pl	Germany

Such applications may also be submitted to the local units of the KRUS having jurisdiction over the place of residence (location of the agricultural holding), from where they will be sent to the competent KRUS institutions.

As regards sickness allowances, maternity allowances and one-off compensation for accidents during agricultural work or occupational diseases, all the regional and local branches of the KRUS serve as the competent institutions.