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Kasa Rolniczego
Ubezpieczenia Społecznego

Powrót

Old-age pensions in the European Union

Regulations (EC) No 883/2004 and No 987/2009 of the European Parliament and of the Council on the coordination of social security systems of the EU Member States, in force in Poland, guarantee the free movement of the citizens of these countries within the European Union and the European Free Trade Association (EFTA). The EU regulations apply also to farmers and household members working on their agricultural holdings who are (were) insured with the Agricultural Social Insurance Fund (Kasa Rolniczego Ubezpieczenia Społecznego, KRUS) and have completed periods of insurance in other Community countries. If a citizen of one of the Member States works and pays contributions in more than one Community country during the period of their professional activity, the EU regulations guarantee that person may receive pension benefits in any country in which he was insured for at least 12 months. In order for an old-age pension (disability pension) to be awarded, the conditions prescribed by the legislation of each of these countries must be fulfilled.

The right to a farmer’s old-age pension or disability pension and EU legislation

In accordance with the Farmers’ Social Insurance Act of 20 December 1990, an old-age pension or a disability pension may be awarded if the required periods of insurance have been completed (at least 25 years for the farmer’s old-age pension and 5 years during the last decade before the date of submission of the application for the farmer’s disability pension). If a farmer (household member) has not completed sufficient periods of insurance in Poland (with the KRUS and the Social Insurance Institution (Zakład Ubezpieczeń Społecznych, ZUS)), the competent KRUS institution responsible for examining the right to an old-age pension or disability pension may take into account the periods of insurance completed by the farmer (household member) in all EU/EFTA countries. A period of insurance completed in another Member State is regarded as if it had been completed in Poland. When determining the right to an old-age pension (disability pension), the KRUS will take into account all the periods which the Member State concerned regards as periods of insurance, even if the Polish legislation provides otherwise. The KRUS may also take into account periods of insurance (and in some cases also periods of residence) in another Member State even if the insured person has completed a sufficient period of insurance in Poland. Thus, previously awarded pension benefits may be recalculated if the person concerned was insured in another Member State. The ‘foreign’ periods will be taken into account if the competent institution of the Member State confirms that the person concerned was insured in that country.

In accordance with the EU legislation, after the person concerned applies for an old-age pension or disability pension, their right to this benefit must be determined by the insurance institution of each country in which the applicant was insured for at least 1 year, unless that person applies for deferment of the award of the old-age pension (the award of the disability pension cannot be deferred).

Example

A farmer who lives in Poland has demonstrated that he has completed the following periods of insurance: 25 years in Poland, 5 years in Denmark, 2 years in Norway and 8 years in Germany. On the date of submission of the application, the man had reached the age of 65. This person does not meet the conditions for receiving an old-age pension under Danish and Norwegian legislation, as the required age in those countries is 67. He applies for deferment of the award of an old-age pension in those countries. He applies for deferment of the award of an old-age pension in those countries.

When awarding an old-age pension, the KRUS will take into account only the periods of insurance completed in Poland and in Germany and will send the application to the German insurance institution so that it can determine the right to a German old-age pension. Once this person reaches the age of 67, the right to the old-age pension will be determined in Norway and Denmark, and the old-age pensions in Poland and in Germany will have to be recalculated. If the periods of insurance completed in each Member State are shorter than 12 months and the person in question is not entitled to an old-age pension if only these periods are taken into account, the institution in the last country where the applicant was insured takes all these periods into account, regarding them as having been completed in this country. If an old-age pension cannot be awarded in the last Member State (the applicant does not meet the conditions prescribed by the legislation in this country), the right to an old-age pension is determined by the institution of the previous Member State in which the person in question was insured etc.

Example

A farmer applying for an old-age pension has completed the following periods of insurance (in the following order):

  • 11 months in Sweden,
  • 10 months in Germany,
  • 11 months in the Netherlands,
  • 11 months in Poland.

As the last period of insurance was completed in Poland, the KRUS will be the first institution to examine the right to an old-age pension. As the woman will not be entitled to an old-age pension under the Polish legislation (the required period of insurance has not been completed, even if the periods are added up), the KRUS will issue a refusal and refer the application to the competent institution in the Netherlands so that it examines the right to an old-age pension.

The amount of the farmer’s old-age pension or disability pension and EU legislation

The amount of an old-age pension or disability pension is determined by each country under the legislation in force in that country. The rules for determining the amount of the farmer’s old-age pension are set out in the Farmers’ Social Insurance Act of 20 December 1990. Thus, the amount of farmers’ pension benefits depends on periods of insurance with the KRUS and the ZUS (regarded as periods of different insurance). The latter periods are calculated as 1.5% of the basic old-age pension for each period of being subject another insurance. Periods of insurance in other Member States are treated as periods of social insurance with the KRUS. In turn, the EU regulations govern the determination of the amount of pension benefits if these benefits:

  • were awarded without the aggregation of periods of insurance completed in another Member State being required,
  • are awarded only after ‘foreign’ periods of insurance have been taken into account.

In the first case, the competent institution of the Member State determines the amount of an old-age pension or disability pension on the basis of the legislation in force in the Member State concerned and then compares this amount with that determined by applying the principle of aggregation of periods of insurance. If an old-age pension calculated in accordance with the principle of aggregation of periods of insurance is less favourable, an old-age pension calculated in accordance with the national legislation will be paid. In the second case, an old-age pension will be calculated on a pro rata temporis basis (in proportion to time) alone.

Determining an old-age pension on a pro rata temporis basis

In accordance with the principle of pro rata temporis, an old-age pension is determined and paid in parts, resulting from the proportion of the periods of insurance completed in the Member State concerned to the aggregated periods of insurance completed in all Member States. In consequence, an old-age pension awarded is made up of ‘parts’, for example a Polish part and a ‘part’ to which the insured person is entitled under the legislation of another Member State. This means that each country pays an old-age pension (disability pension) only for the periods of insurance completed on its territory.

Example

A farmer (aged 65) has applied for the farmer’s old-age pension in Poland. The applicant has demonstrated that he has completed a period of insurance in Poland (20 years) and in Germany (10 years). As the period of insurance in Poland is shorter than 25 years, the farmer is not entitled to an old-age pension under Polish legislation. Once the periods are aggregated and Regulation No 883/2004 is applied, however, he will become entitled to the Polish old-age pension, having completed a sufficient period of insurance. The KRUS will pay a part of the Polish old-age pension on a pro rata temporis basis. If the farmer meets the conditions for receiving an old-age pension in Germany, this country’s competent institution will pay ‘its’ part of the old-age pension, in proportion to the periods of insurance completed there. In such a case, the KRUS will determine:

- the theoretical (Eĸt) amount of the old-age pension or disability pension (contributory part and supplementary part) to which the farmer would have been entitled if all the periods of insurance (Polish and German, i.e. a total of 360 months in this case) had been completed in accordance with the Polish legislation, and subsequently will determine:

- the actual (Ekrz) amount of the old-age pension or disability pension (contributory part and supplementary part) by multiplying the theoretical amount by the ratio of the Polish periods of insurance to the sum of all periods of insurance completed by the farmer in Poland and in Germany:

The actual amount

240 months (Polish periods of insurance)
Ekrz = Ekt x ..................................................................
240 months (Polish periods of insurance) + 120 months (German periods of insurance)

In this case, the KRUS will pay the farmer’s old-age pension in the proportion of 240/360, i.e. assuming that PLN 600.63 is the theoretical amount of the Polish old-age pension calculated based on the total period of 360 months, and the actual amount of the Polish old-age pension is PLN 400.42 (240/360 x PLN 600.63). The Polish old-age pension will be paid in this proportion regardless of whether the person in question is entitled to the German old-age pension or disability pension or not.

If the old-age pensioner or disability pensioner did not cease to carry out agricultural activities, the KRUS will proportionally suspend a part of the benefit.

Payment of the farmer’s old-age pension or disability pension to an EU Member State

Since 1 May 2004, whenever an old-age pensioner or a disability pensioner requests that the old-age pension or disability pension be transferred to a country forming part of the European Community or the European Economic Area, this benefit is transferred to the country where the pensioner resides. In accordance with the EU regulations, pension benefits cannot be reduced, amended or suspended only because an old-age pensioner or a disability pensioner resides in a Member State other than that in which the institution responsible for paying the benefit is situated. Thus, these provisions waive national clauses requiring that a benefit be paid only if the eligible person resides in the country that has awarded the benefit. An old-age pensioner or a disability pensioner to whom the KRUS previously refused to pay cash benefits abroad (to EU and EFTA countries) may now request that the Polish old-age pension or disability pension be transferred to the country of residence. In this case, the EU provisions take precedence over the Act on old-age pensions and disability pensions from the Social Insurance Fund (Article 132), under which the KRUS refused to pay farmers’ old-age pensions (disability pensions) abroad, including to EU countries, before Poland’s accession to the European Union.

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