Pensioners have to pay pension insurance, but this does not increase their pensions

Autor:

06.12.2018.

Luka Gerlanc / CROPIX

Ilustration

Since 2017, pensioners have to pay pension contributions for fees for extra work, but this cannot increase their pensions.

Mrs. Mirjana, who has been working as a court interpreter for the last five years as a pensioner, realized the absurdity of regulations according to which pensioners have to pay pension contributions for fees for extra work.

According to the reply she received from the Pension Insurance Institute (HZMO), she can forget about thousands of HRK she paid in pension contributions in the last two years because, as the HZMO put it, there are no regulations that would allow recalculating her pension and increasing it in line with additional contributions she made.

Worked in vain

-This is unbelievable. I just cannot understand that legislators came up with something like this. There are many pensioners who work - not just court interpreters but also journalists, artists and more - said Mrs. Mirjana (full name known to the editors), who is an attorney by vocation.

As soon as new regulations came into force on first day of last year, according to which pension contributions must be paid for all income from extra work, Mrs. Mirjana started looking into what this means for pensioners and why these regulations apply to them. When she called the Ministry of Labor and Pension System, the employee said only 'that is a good question'. Several days later, the employee contacted her and noted that she looked into it, asserting that she does not have to worry because her pension will be increased and one year of work experience added after her additional income reaches average annual wage.

-My additional income exceeded this amount last month and I called on the HZMO to recalculate my pension. I was surprised to learn that this was not possible - she said.

HZMO bound by regulations

The HZMO told us the same. According to the Pension Insurance Act, Article 100 allows recalculation of pension under the condition that employment or activity for which pension contributions were paid has ended or was terminated.

-Since pensioners who have extra income do not end their activities, there is no legal way to recalculate their pensions - confirmed the HZMO. Mrs. Mirjana pointed out that working as court interpreter as pensioner does not present permanent employment with set start or end, stressing that it is impossible to say when it will end.

-At the same time, I am making payments to the pension insurance system and I believe that I should get something for it - she noted.

Since regulations are the way they are, we tried to ask Minister of Labor and Pension System Marko Pavić about the purpose of pension contributions that pensioners are obligated to make. However, the Ministry has not responded, which has become standard practice for the Ministry.

Can end up in the red

-This is entirely illogical and unacceptable - said Croatian Pensioners' Party (HSU) president Silvano Hrelja, who was not aware of the problem. As we have learned from the HZMO, the good news is that the proposed Pension Insurance Act allows recalculating pension if the pensioner in question made at least one average annual wage through extra work.

-This is good news. However, what about my payments over the last two years? As far as I can see, proposed regulations do not apply to payments made before new regulations come into force, which is slated for 1 July 2019 - noted Mrs. Mirjana.

The Ministry did not reply to our question. Our interlocutor at the HZMO warned about another possible absurdity. Since pensions are roughly calculated through wages compared to average wage each year, it is possible that pensions of people who made significantly more than average during their working life could go down.

-In the end, additional contributions could bring down a person's pension. There are few people like that, but it could happen in theory - noted the source. Hrelja expressed belief that this will not happen to anyone, stressing that additional year of work should increase one's pension.

Marko Pavić's Ministry conceded that regulations are flawed and announced correcting this in the new Pension Insurance Act

Inačica na drugom jeziku / Alternate language version