20. 1. 2020

Key amendments and supplements to ZPIZ-2 for employers

The Act Amending the Pension and Disability Insurance Act (Official Gazette of the Republic of Slovenia, nr. 75/2019, ZPIZ-2G) entered into force on 1 January 2020. The changes introduced by ZPIZ-2G include (i) higher percentages for calculating pensions of insured persons who have completed 15 years pensionable service (i.e. 29.50% for women, while the percentage for men will gradually increase until 2025), (ii) higher percentages for insured persons who have completed 40 years pensionable service (i.e. 63.5% for women, while the percentage for men will gradually increase until 2025), (iii) higher percentages for the care of every newborn or adopted child (whereby women will have the opportunity to choose either a higher percentage or a lowering of the retirement age limit), (iv) higher percentages for people, who despite being eligible for retirement (i.e. 60 years of age and older with 40 years pensionable service), remain in employment.

Key changes under ZPIZ-2, which will also affect employers, are changes to the payment of allowable homeworking expenses and expenses claimable by employees where they use their own tools, appliances and belongings in the workplace, changes to occupational insurance and increases in the minimum yearly payment of collective supplementary pension insurance payable by employers.

Until now, in accordance with Article 144 of ZPIZ-2, the salary or benefits in kind (e.g. bonuses, reimbursement of work-related costs) was used as the basis for paying employees' social insurance contributions. So far, this article has also provided for certain additional benefits, e.g. jubilee awards, retirement pay, annual leave allowance, provided that the conditions laid down by the law are met.

ZPIZ-2G also amends the amount of allowable homeworking expenses and expenses claimable by employees where they use their own tools, appliances and belongings (other than personal vehicles) to do their job in the workplace. Personal income tax is paid on these expenses in accordance with the Personal Income Tax Act. If these benefits are included in the tax base in accordance Article 44(1)(6) and (10) of the Personal Income Tax Act (Official Gazette of the Republic of Slovenia, No. 13/11, ZDoh-2), then contributions on these amounts shall also be paid according to ZPIZ-2.

ZPIZ-2G further amends certain provisions regarding occupational insurance. These amendments do not interfere with the rights of insured persons, they will, however, result in a somewhat greater financial burden for employers. Namely, employers will now be required to pay occupational insurance contributions during periods when an insured person (worker) is in receipt of health insurance benefits (where on sick leave for more than 30 days, etc.), if occupational insurance is compulsory for the job performed by the insured person, at the time of receiving this benefit. This applies to several cases of temporary leave from work, including temporary retention from work due to injury at work, occupational disease or illness that is not otherwise categorized as occupational but may have been triggered by the result of work in that post.

At the same time, the minimum amount of collective supplementary pension insurance payable by employers (if they offer by such supplementary insurance) has increased. Payments may not be lower than EUR 300.00 (previously EUR 240.00), whereby this amount will be adjusted annually using the average gross monthly salary in the Republic of Slovenia for the previous year as a benchmark.

Author: Ana Porenta Vran, Attorney at law
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