REPUBLIC OF LITHUANIA REPUBLIC OF LITHUANIA LAW ON INDIVIDUAL INCOME SECURITY This law shall establish the principles of supporting individual income taking into account minimum standard of living and thedynamics of prices. Guarantees provided by this law shall be applied to the citizens of the Republic of Lithuania, as well as foreign citizens permanently residing in Lithuania and persons without citizenship if it is not otherwise provided by the laws of the Republic of Lithuania or by interstate agreements. Chapter 1 Basic Definitions Article
- As used in this law: wages (used for the indexation of income) -payment by time, piece work payment and salary; indexation-adjustment of nominal income or its rates with the aim to fully or partially compensate income loss associated with changes in prices of goods and services; minimum standard of living - means the sum of monthly earnings of a family per capita per month and guaranteeing to all its members socially acceptable minimal level of needs corresponding to the physiologically acceptable norms of nutrition as well as needs in clothing, footwear, furniture household and sanitary commodities, needs in housing, public utilities, transportation, communication services, and services in culture and education; income - nominal income of the whole family (wages together with incentive payments, royalties, pensions, stipends, benefits, income received from small holding and from private economic activity, income from private property, interest, dividends and others) as well as income received in kind free of charge or on preferential terms at a job ,valued in terms of money at current retail prices; income subject to support is computed for one family member by deducting from income compulsory payments and not including social-security benefits paid under this law, compensations (with the exception of cases provided in this law) as well as income received from all kinds of insurance with the exception of temporary disablement allowances; lost income means the difference between basic income multiplied by retail price index and real income; family - from the point of view of social support, spouses, couples, widows and widowers regardless of whether they have children (dependants) or not, guardians with wards and single persons shall be considered as a separate family. Pensioners regardless of whether they live separately or with their childrens' (guardians') families shall be considered as a single family. Single students shall be considered as members of their parents' (guardians') family. Servicemen who are on active duty, children deemed wards of State and placed in boarding homes or other institutions, persons serving their sentence in imprisonment institutions shall not be considered as part of a family. Chapter 2 Minimum Standard of Living and Indexation of Income Article
- Minimum standard of living shall be approved by the Supreme Council of the Republic of Lithuania on the recommendation of the Executive Branch at least once every five years. Minimal wages and minimal pensions shall be established by separate laws. Article
- Indexation base shall be the summary retail price index which is computed and made available to the public at least every three months by the Department of Statistics under the auspices of the Government of the Republic of Lithuania. Article
- The minimum standard of living shall be indexed at the same frequency as the Department of Statistics shall compute and make available to the public the index of retail prices but no less frequently than once a year. The minimum standard of living is indexed by the Ministry of Social Security. Article
- Regular earnings (stipends, salaries, social- security benefits) and minimal wages shall be indexed in the same manner as the minimum standard of living. Wages shall be indexed at all enterprises seeking profit if it is provided for in labour or employment contracts. Single earnings and income received from property shall not be indexed. Article
- The income which through indexation is established as lost shall be subject to compensation. It shall be compensated at the same frequency as it shall be indexed if the retail price index exceeds 1.1 computing from the last compensation. The lost income shall be compensated from the same resources as the given income is paid out. Claims for compensations that had to be paid out shall be resolved by court. Article
- The government may suspend the payment of compensations but for no longer than six months. Article
- The amount of compensations shall be established according to the minimum standard of living, the amount of income liable for compensation and lost income, as well as rate of compensation determining the portion of lost income. The amount of lost regular payments that are smaller or equal to minimum standard of living calculated after indexation, shall be fully compensated, i.e. the rate of compensation shall be equal to one. The amount of lost regular payments exeeding the minimum standard of living calculated after indexation, shall be compensated according to the decreasing rate of compensation of income. The Government shall establish the level of regular payments which are not subject to compensation, i.e. the compensation rate shall be equal to zero. The Government must compensate regular payments which are not lower than three average minimum standards of living calculated after indexation,according to the decreasing rate of compensation. Article
- At enterprises the lost amount of wages shall be compensated in the same manner as regular payments if it is provided for in labour or employment contracts. A certain amount of wages shall be lost when retail price index exceeds the growth rate of average wages at a given enterprise. The lost amount of wages shall be calculated by multiplying that exceeding amount by the given base wages. Chapter 3 Social Security Benefit Article
- Social security benefit shall be paid to a family whose income per capita is lower than income subject to State support. The benefit shall be computed according to the principle adverse to income tax, i.e. income which is smaller than income liable to support,shall not be subject to taxation and social security benefit shall be added thereto. Article
- The amount of social security benefit shall depend upon the rate of social security benefit (r) and the amount by which family income is lower than minimum standard of living. The rate of social security benefit shall be equal to the proportion between income guarantee (G) paid to the family without any income, and minimum standard of living (MSL): r = G/MSL The amount of income that is subject to social security benefit, the rates of social security benefit and the amount of income guarantee shall be established by the Government. The amount of income guarantee cannot be lower than the portion of income spent on food ( when eating at home ) under the indexed minimum standard of living. Article
- Social security benefit of a family whose average monthly income calculated for one person (Y) is lower than or equal to real income per capita (RI), shall be computed by multiplying the difference between MSL and Y by the rate (r) of social security benefit (SB). SB = r(MSL - Y), when Y RI, SB =
- Article
- Persons shall be held responsible for filing correct income return under procedure established by laws. Sheltered income and a penalty equal to 300% of social security benefit paid out to a person, shall be recovered and deposited into the local budgets. Local governments shall institute a legal action to recover the said amount. The Government shall establish the procedure according to which social security benefits shall be paid out and the correctness of income return shall be supervised. VYTAUTAS LANDSBERGIS President Supreme Council Republic of Lithuania Vilnius 27 September 1990 No I-618