LIETUVOS RESPUBLIKOS

LIETUVOS RESPUBLIKOS REPUBLIC OF LITHUANIA LAW ON STATE SOCIAL INSURANCE 21 May 1991 No I-1336 Vilnius (As last amended on 22 December 2009 – No XI-638) SECTION ONE General Provisions Article 1. Purpose of the Law 1. This Law shall establish the basis for state social insurance relations: types of state social insurance, categories of the persons covered by state social insurance, principles and structure of the state social insurance management system, rights, duties and responsibility of entities thereof. 2. This Law shall implement the legal acts of the European Union listed in the Annex to this Law. Article 2. Definitions 1. “Insured persons” mean the natural persons who, in accordance with the procedure laid down by this Law, pay state social insurance contributions themselves and/or insurers pay these contributions for them. 2. “Insurers” mean all legal persons and branches and representative offices thereof as well as the natural persons who, in accordance with the procedure laid down by laws, are under an obligation to pay state social insurance contributions. 3. “Insured event” means a legal fact entitling to a state social insurance benefit in accordance with the procedure laid down by laws. 4. “Insured income” means all the income of a person from which state social insurance contributions have been calculated and must be paid in accordance with the procedure laid down by this Law as well as calculated sickness, maternity, paternity, maternity (paternity), vocational rehabilitation state social insurance allowances, state social insurance allowances for illness resulting from occupational accidents or occupational diseases and unemployment state social insurance benefits.  The calculated amount of output VAT for the goods supplied and the services rendered shall not be held equivalent to insured income. 5. “Cumulative pension contribution” means a portion of the state social pension insurance contribution accumulated under the Law on the Accumulation of Pensions. 6. “Pension benefits” mean the benefits specified in the Law on the Accumulation of Pensions and paid from the pension assets accumulated by a person with a pension fund. 7. “Pension accumulation companies” mean a pension fund management company or a life assurance undertaking holding an authorisation or licence issued by a supervisory institution to engage in the accumulation of pensions in the territory of the Republic of Lithuania as specified under the Law on the Accumulation of Pensions. 8. “Self-employed persons” mean owners of individual enterprises; members of general partnerships, members of limited partnerships; the persons who are engaged in individual activities as defined in the Law on Personal Income Tax (lawyers, assistant lawyers, notaries, bailiffs, the persons holding business certificates and other persons); farmers and their partners, in the case when the economic size of an agricultural holding as registered in the Republic of Lithuania Agriculture and Rural Business Register is, according to the calculations carried out by the State undertaking Agricultural Information and Rural Business Centre for the tax period of the previous year from 1 January until 31 December, equal to, or exceeds, 4 European Size Units, shall be established on the basis of Commission Decision No 85/377/EEC (with successive amendments) establishing a Community typology for agricultural holdings (hereinafter referred to as “farmers and their partners”). 9. “Administration agencies of the State Social Insurance Fund” (hereinafter referred to as the “administration agencies of the Fund”) mean the State Social Insurance Fund Board under the Ministry of Social Security and Labour (hereinafter referred to as the “Fund Board”), local offices of the State Social Insurance Fund Board (hereinafter referred to as “local offices of the Fund Board”) and other agencies of the Fund related to the administration of the State Social Insurance Fund. The administration agencies of the State Social Insurance Fund shall be state agencies. 10. “State social insurance contributions” (hereinafter referred to as “social insurance contributions”) mean the contributions paid by insured persons and/or by their insurers in the amount specified by laws. 11. “State social insurance benefits” (hereinafter referred to as “social insurance benefits”) mean the social insurance benefits specified by laws to which insured persons and other natural persons specified by laws become entitled in the event of an insured event. 12. “State Social Insurance Fund” (hereinafter referred to as the “Fund”) means the centralised targeted financial and material resources managed in accordance with the procedure laid down by this Law and accounted in the budget of the State Social Insurance Fund, which is separate from state and municipal budgets, and used to finance, manage and administer state social pension, sickness and maternity, unemployment and health insurance as well as insurance of occupational accidents and occupational diseases.  13. “State social insurance” (hereinafter referred to as “social insurance”) means a part of the system of social security whose measures are intended to compensate, in full or in part, for the income derived from work and lost by insured persons and, in the cases specified by laws, their family members as a result of insured events or to cover additional expenses. Article 3. Types of Social Insurance This Law shall establish the following types of social insurance: 1) pension social insurance, where a person is insured to receive the basic or the basic and supplementary parts of a pension as provided for in the Law on State Social Insurance Pensions;   2) sickness and maternity social insurance, where a person is insured to receive the sickness and maternity, paternity and maternity (paternity) and vocational rehabilitation benefits provided for in the Law on Sickness and Maternity Social Insurance. In the cases provided for by this Law, persons shall be covered by sickness and maternity social insurance, where a person is insured to receive only the maternity, paternity and maternity (paternity) benefits provided for in the Law on Sickness and Maternity Social Insurance; 3) unemployment social insurance, where a person is insured to receive the benefits provided for in the Law on Unemployment Social Insurance; 4) social insurance of occupational accidents and occupational diseases, where a person is insured to receive the benefits provided for in the Law on Social Insurance of Occupational Accidents and Occupational Diseases; 5) health insurance, where an insurer insures for the health care services and compensations provided for in the Law on Health Insurance. Article 4. Persons Covered by Social Insurance According to the Types of Social Insurance 1. The following persons shall be covered on a compulsory basis by social insurance of the types specified in Article 3 of this Law: 1) the persons employed under employment contracts, notary candidates (assessors), the persons receiving remuneration for work and holding, on the basis of membership, elected posts or appointed to constituency, town, region and polling district electoral and referendum commissions, also the persons who are linked with the insurer by employment relations or by the relations in their essence corresponding to employment relations in the same manner as these relations are defined in the Law on Personal Income Tax and who at the same time receive from this insurer income from sports activities, performing activities or under commission agreements; 2) the state politicians, judges, state officials and civil servants indicated in the Law on the Remuneration of State Politicians and State Officials, the Law on the Remuneration of Judges and the Law on Civil Service (with the exception of the civil servants indicated in paragraph 2 of this Article), the persons indicated in the Law on Delegation of Persons to International Institutions and Institutions of the European Union or to Foreign Institutions, where their remuneration for work and social insurance contributions therefrom are paid by the delegating institution of the Republic of Lithuania which has delegated a person (hereinafter referred to as “delegating persons”), also the persons receiving remuneration for work and appointed by the Seimas, the Speaker of the Seimas, the President of the Republic or the Prime Minister. 2. The following persons shall be covered on a compulsory basis by social insurance of the types specified in subparagraphs 1 and 3 of Article 3 of this Law: 1) officers of the system of the internal service, the system of the State Security Department, the Special Investigation Service and the Prisons Department under the Ministry of Justice of the Republic of Lithuania as well as the officials of the agencies and undertakings subordinate thereto; 2) servicemen in professional military service of the system of national defence and the statutory servants in civilian national defence service at the Second Investigation Department under the Ministry of National Defence; 3) the spouses of civil servants and servicemen in professional military service who have not attained the pensionable age and do not receive the income related to employment relations – during a period when they reside abroad together with a civil servant or a delegated person, where the latter has been delegated or where the civil servant has been transferred to a post at a diplomatic mission, consular post of the Republic of Lithuania, mission of the Republic of Lithuania at an international organisation, international institution or an institution of the European Union or a foreign state’s institution, sent on a special mission, or when they reside together with a serviceman in professional military service, where the serviceman in professional military service has been assigned to fulfil military service at a diplomatic mission, consular post of the Republic of Lithuania, mission of the Republic of Lithuania at an international organisation, a foreign state’s or international military or defence institution.  The spouses of delegated persons shall be covered by insurance only where the remuneration of the delegated person and social insurance contributions therefrom are paid by the delegating institution of the Republic of Lithuania which has delegated the person. A spouse of the President of the Republic who has not attained the pensionable age and who does not receive the insured income – during the term of office of the President of the Republic; 4) the servicemen fulfilling mandatory initial military service in the armed forces of the Republic of Lithuania and servicemen fulfilling alternative national defence service; 5) at the choice of a family, one of the parents (adoptive parents) or a person appointed as a child’s guardian raising a child under 3 years of age; 6) one of the parents (adoptive parents) of a disabled person rated as requiring permanent special nursing care, where the parent is not in the old-age retirement group, or a person who has been declared, in accordance with the established procedure, a guardian or custodian of the disabled person and who nurses the said disabled person at home. This provision shall also apply to one of the parents (adoptive parents), guardian or custodian nursing at home a totally disabled person rated as such before 1 July 2005. 3. Self-employed persons, with the exception of the persons engaged in individual activities under business certificates, shall be covered on a compulsory basis by pension social insurance to receive the basic and supplementary parts of a pension (subparagraph 1 of Article 3 of this Law), by sickness and maternity social insurance, where a person is insured to receive only the maternity, paternity and maternity (paternity) benefits (subparagraph 2 of Article 3 of this Law), and by health insurance (subparagraph 5 of Article 3 of this Law). Note: Provisions of paragraph 3 shall apply to calculation and payment of state social insurance contributions for 2010 and subsequent years. 4. The following persons shall be covered on a compulsory basis by pension social insurance to receive only the basic part of a pension: 1) the persons engaged in individual activities under a business certificate; 2) (Repealed on 1 January 2008); 3) clergymen of traditional and other religious communities and associations recognised by the State as well as the nuns and monks working only in a convent and monastery; 4) (Repealed on 1 January 2008); 5. The permanent residents of Lithuania, as they are defined in the Law on Personal Income Tax (hereinafter referred to in this paragraph as “permanent residents of Lithuania”) who are not listed in subparagraph 1 of paragraph 1 of this Article and who receive income under commission agreements from the insurer which is a Lithuanian entity, as this concept is defined in the Law on Personal Income Tax (hereinafter referred to in this paragraph as the “Lithuanian entity”), shall be covered, on a compulsory basis, by social pension insurance for the basic and supplementary parts of a pension (subparagraph 1 of Article 3 of this Law), by sickness and maternity social insurance (subparagraph 2 of Article 3 of this Law) and by health insurance (subparagraph 5 of Article 3 of this Law), with the exception of the cases when such income is earned in pursuit of individual activities. The permanent residents of Lithuania who receive income from sports activities or from performing activities as these concepts are defined in the Law on Personal Income Tax from the insurer which is a Lithuanian entity and with which they are not linked by employment relations or by the relations in their essence corresponding to employment relations in the same manner as these relations are defined in the Law on Personal Income Tax shall be covered, on a compulsory basis, by social pension insurance for the basic and supplementary parts of a pension (subparagraph 1 of Article 3 of this Law), by sickness and maternity social insurance,  where a person is insured to receive only the maternity, paternity and maternity (paternity) benefits (subparagraph 2 of Article 3 of this Law) and by health insurance (subparagraph 5 of Article 3 of this Law), with the exception of the cases when such income is earned in pursuit of individual activities. The permanent residents of Lithuania pursuing appropriate (creative, performing or sports) individual activities shall be subject to provisions of paragraph 3 of this Article. Note: Provisions of paragraph 5 shall apply to calculation and payment of state social insurance contributions for 2010 and subsequent years. 6. The following persons shall be covered on a compulsory basis only by social insurance of occupational accidents and occupational diseases: 1) pupils of vocational schools, students of higher education institutions as well as the persons posted by local labour exchange offices for vocational training or vocational rehabilitation – during their vocational practice at an agency or undertaking; 2) the persons receiving remuneration for work and placed in social and psychological rehabilitation institutions – during the period of their work; 3) the persons sentenced to imprisonment and receiving remuneration for work – during the period of their work. 7. The persons permanently resident in the Republic of Lithuania or an EU Member State who are at least 16 years of age may take out voluntary pension social insurance to receive the basic or the basic and supplementary part of a pension as well as sickness and maternity social insurance to receive sickness and maternity allowances during a period when they are not compulsorily covered by the social insurance of these types or are compulsorily covered by (have taken out) pension social insurance in accordance with the procedure laid down by laws to receive only the basic part of the pension. The procedure for paying social insurance contributions and for concluding agreements shall be laid down by the Government or an institution authorised by it. 8. With the exception of the persons who have attained old-age retirement age, the persons who are compulsorily covered by pension social insurance to receive the basic and supplementary part of a pension shall have the right at their own choice to accumulate a portion of the pension social insurance contribution with pension accumulation companies under the Law on Reform of the Pension System and the Law on the Accumulation of Pensions. Pension contributions for the persons covered by insurance from funds of the State budget shall not be calculated and paid. 9. The persons referred to in subparagraphs 1 and 2 of paragraph 2 of this Article shall be covered on a compulsory basis by insurance of the type specified in subparagraph 5 of Article 3 of this Law. Note: Provisions of paragraph 9 shall apply to calculation and payment of state social insurance contributions for 2010 and subsequent years. SECTION TWO SOCIAL INSURANCE CONTRIBUTIONS AND BENEFITS Article 5. Duty of the Payment of Social Insurance Contributions and Rates of Social Insurance Contributions 1. The social insurance contributions of the persons indicated in paragraphs 1, 2 and 5 of Article 4 of this Law must be paid by insured persons and insurers. 2. The persons indicated in subparagraph 1 of paragraph 4 of Article 4 shall pay their social insurance contributions themselves, whereas the persons indicated in paragraph 3 of Article 4 shall pay social insurance contributions themselves or these contributions shall be paid by their insurers. 3. The persons indicated in subparagraph 3 of paragraph 4 of Article 4 of this Law shall be insured to receive the basic part of a social insurance pension with state funds. The persons indicated in subparagraphs 5 and 6 of paragraph 2 of Article 4 of this Law shall be insured with state funds only provided they do not have insured income during that period. The persons indicated in subparagraph 3 of paragraph 2 of Article 4 of this Law shall be insured with state funds on half the basic salary of respectively a civil servant or professional service serviceman or half of the remuneration of a person delegated under a delegation contract or half of the remuneration of the President of the Republic. The persons indicated in subparagraphs 4-6 of paragraph 2 of Article 4 of this Law shall, in accordance with the procedure laid down in the rules for the drawing up and implementation of the State Social Insurance Fund budget, be insured with state funds for the basic and supplementary parts of a social insurance pension and covered by unemployment social insurance, and contributions of pension and unemployment social insurance shall be calculated on the minimum monthly salary as approved by the Government. 4. Repealed on 1 January 2009. 5. The persons indicated in subparagraph 1 of paragraph 6 of Article 4 of this Law shall, in accordance with the procedure laid down in the rules for the drawing up and implementation of the State Social Insurance Fund budget, be insured with state funds, and contributions of social insurance of occupational accidents and occupational diseases shall be calculated on the minimum monthly salary as approved by the Government. The contributions of social insurance of occupational accidents and occupational diseases for the persons indicated in subparagraphs 2 and 3 of paragraph 6 of Article 4 of this Law must be paid by insurers. 6. The rates of social insurance contributions and amounts (portions) thereof in respect of the specific types of social insurance shall be approved by the Law on the Approval of Indicators of the State Social Insurance Fund Budget. 7. The rate of pension social insurance contributions in respect of the insured persons participating in the accumulation of pensions under the Law on Reform of the Pension System shall be established by the Law on the Approval of Indicators of the State Social Insurance Fund Budget of the relevant year. Article 6. Establishment of Social Insurance Record 1. Social insurance record shall be established according to the period of payment of calculated social insurance contributions to the Fund and the periods during which sickness, vocational rehabilitation, maternity, paternity, maternity (paternity) allowances, allowances of social insurance of illness resulting from occupational accidents and occupational diseases as well as unemployment social insurance benefits were received from the Fund. The social insurance record of self-employed persons or the persons who receive income from sports activities or from performing activities or under commission contracts shall be established according to the social insurance contributions which have been paid. Where these contributions have been paid from the amount of the minimum monthly salary, the social insurance record of the length of one month shall be acquired.  In the cases when the contributions have been paid from the amount falling below or exceeding the amount of the minimum monthly salary, the length of the social insurance record shall be considered to be proportionately shorter or longer. 2. The social insurance record to receive specific social insurance benefits shall be established by the laws regulating the relevant types of social insurance. Article 7. Income on Which Social Insurance Contributions Shall be Calculated 1. The social insurance contributions in respect of the insured persons indicated in paragraph 1 and subparagraphs 1 and 2 of paragraph 2 of Article 4 of this Law shall be calculated on the aggregate amount of remuneration as calculated for every insured persons, which may not be less than the minimum monthly salary, and on the compensatory or incentive benefits related to employment relations, the income received from sports activities, from performing activities and/or the income received under commission contracts, regardless of the sources of payment, including: 1) the basic remuneration as calculated for an insured person and all additional earnings (specific hourly wage rates; monthly salaries; increased wage rates as compared to ordinary conditions; remuneration for preparation for travel and settlement at a new place; other forms of remuneration for work; other benefits relating to employment relations) specified in the Labour Code and other legal acts as calculated in any manner by the insurer for the insured person for the work performed by him;   2) the remuneration as calculated for an insured person and consisting of the basic salary, bonuses, and additional pays specified in the Law on Civil Service as well as the legal acts regulating the payment of these benefits; 3) the remuneration as calculated for an insured person and specified in the Law on the Remuneration of State Politicians and State Officials as well as the Law on the Remuneration of Judges; 4) the bonuses and severance pays as calculated for the persons indicated in paragraphs 1 and 2 of Article 4 of this Law; 5) the compensations calculated for annual and special leave (with the exception of maternity leave, paternity leave and leave to care for a child under three years of age) as well as the monetary compensations calculated for unused annual leave or for lay-off; 6) premiums, allowances and other benefits (with the exception of the benefits indicated in Article 8 of this Law). 2. Social insurance contributions in respect of the persons referred to in paragraph 3 of Article 4 of this Law shall be calculated as follows: 1) the base of social insurance contributions in respect of the owner of an individual enterprise, also a general partner of a partnership shall comprise an amount declared by the individual enterprise or the partnership in accordance with the procedure laid down by the Fund Board in conjunction with the State Tax Inspectorate under the Ministry of Finance and co-ordinated with a local office of the Fund Board and a local state tax inspectorate, which is taken during a calendar year for the personal needs of the owner of the individual enterprise or the general partner of the partnership and which, during a month of the calendar year, may not fall below the minimum monthly wage. These provisions shall not apply where the individual enterprise or the partnership temporarily does not pursue its activities and has declared this fact in accordance with the procedure laid down by the Law on Tax Administration and the implementing legal acts;   2) the base of social insurance contributions in respect of the persons pursuing individual activities as defined by the Law on Personal Income Tax shall consist of an amount equivalent to 50 per cent of the taxable income from the individual activities (prior to deduction of compulsory health insurance and state social insurance contributions). The base of social insurance contributions in respect of farmers and their partners, in the case when the economic size of an agricultural holding, for the tax period of the previous year from 1 January until 31 December, exceeds 14 European Size Units, shall comprise the aggregate amount of the taxable income from each person’s agricultural activities (prior to deduction of compulsory health insurance and state social insurance contributions), however it may not fall below the amount of 12 minimum monthly wages and may not exceed 12 amounts of insured income of the current year as approved by the Government of the Republic of Lithuania. The base of social insurance contributions in respect of the farmers and their partners, in the case when the economic size of an agricultural holding, for the tax period of the previous year from 1 January until 31 December, is equal to or less than 14 European Size Units, shall be the aggregate amount of 12 minimum monthly wages. Note: Provisions of paragraph 2 shall apply to calculation and payment of state social insurance contributions for 2010 and subsequent years. 3. In compliance with subparagraph 1 of paragraph 1 of Article 4 and paragraph 5 of Article 4 of this Law, social insurance contributions shall be calculated and paid on a compulsory basis from the income received from sports activities and/or performing activities and/or from the income received under commission contracts. In the case indicated in paragraph 5 of Article 4 of this Law, the base of social insurance contributions shall consist of 50 per cent of the income received from sports activities and/or performing activities and/or from the income received under commission contracts. Note: Provisions of paragraph 3 shall apply to calculation and payment of state social insurance contributions for 2010 and subsequent years. 4. The base of social insurance contributions in respect of the persons referred to in paragraph 2 of this Article (with the exception of farmers and their partners), also in respect of the persons referred to in paragraph 5 of Article 4 of this Law during a calendar year may not exceed 48 amounts of insured income of the current year as approved by the Government of the Republic of Lithuania, and the monthly base of these contributions may not exceed 4 amounts of insured income of the current year as approved by the Government of the Republic of Lithuania. Note: Provisions of paragraph 4 shall apply to calculation and payment of state social insurance contributions for 2010 and subsequent years. 5. State social insurance contributions shall be calculated on the base of social insurance contributions determined in proportion to the period of activities, where individual enterprises, partnerships or self-employed persons pursue the activities for an incomplete tax year. Note: Provisions of paragraph 5 shall apply to calculation and payment of state social insurance contributions for 2010 and subsequent years. Article 8. Income on Which and Cases When Social Insurance Contributions Shall not Calculated 1. Social insurance contributions shall not be calculated on: 1) the amount of an allowance paid to an insured person by the employer upon the death of the insured person’s spouse, children (adopted children), parents (adoptive parents) as well as in the cases of natural disasters, fires and explosions, provided it does not exceed 5 minimum monthly salaries. The amount from which social insurance contributions shall not be calculated shall be increased by as many times as there are the deceased family members of the insured person as indicated in this subparagraph for whom an allowance is paid; 2) an allowance paid by the insurer upon the death of an insured person to his spouse, children (adoptive children) or parents (adoptive parents); 3) benefits for the rent of an apartment, electricity, heat, hot and cold water supply, utilities and communications services, use of personal means of transport, catering of employees as well as the benefits intended to compensate for expenses of the employees whose work is performed during a travel, in field conditions, is related to driving or is of a movable nature and paid in the amount and in the cases specified by laws; 4) the benefits intended to cover postings’ expenses and not subject to personal income tax as well as postings’ expenses for the persons travelling abroad on business, where only the forward and return journey is paid for (including the execution of a visa, insurance against an illness and other compulsory expenses related to the crossing of state borders), paid in the amount and in the cases specified by laws; 5) the benefits as specified by laws to reimburse for material damage as a result of mutilation, other impairment to health or the death of the breadwinner; 6) the amounts paid by undertakings, agencies and organisations for the training, improvement of qualification and retraining of employees. Scholarships or other additional benefits relating to the training, improvement of qualification or retraining of employees and paid to an employee shall not be attributed to these amounts; 7) sickness allowances as paid from the insurer’s funds for the first two days of illness.  This provision shall not apply to the benefits paid due to temporary incapacity for work to the persons listed in subparagraphs 1 and 2 of paragraph 2 of Article 4 of this Law; 8) late payment interest for delayed payment of the benefits related to employment relations; 9) (repealed on 1 January 2009); 10) the insurer’s funds paid for the vaccination of employees against contagious diseases and compulsory preventive health examination of the employees; 11) the amounts awarded by courts and recovered to reimburse for pecuniary and non-pecuniary damage; 12) the scholarships, allowances and compensations of students and pupils of educational establishments intended to cover travel and learning (studies) expenses, where they are paid from the funds of the state budget and municipal budgets of the Republic of Lithuania, funds of the non-profit entities established in accordance with the procedure laid down by laws of the Republic of Lithuania and foreign states in accordance with the procedure laid down by laws, if the recipient of a scholarship is not a member or employee of the entity which pays the scholarship and if such a scholarship does not relate to the work or services performed or intended to be performed for these entities by the recipient of the scholarship; 13) the compensations paid when admitting or transferring an employee for work at another location; 14) compensations for the wear of the tools and working clothes belonging to employees; 15) the compensations paid for the maintenance of the spouses and children (adopted children) of civil servants or servicemen in professional military service who have moved abroad together with the mentioned persons; 16) the compensations for the expenses related to working abroad as paid to civil servants, delegated persons and servicemen in professional military service, also a mission’s employees who are members of the diplomatic staff or administrative and technical staff; 17) the compensations and other benefits received from an international institution or an institution of the European Union or from a foreign institution, also the remuneration received from the mentioned institutions, provided social insurance contributions are calculated thereon according to the legal acts on the basis whereof the institutions pay the remuneration; 18) the compensations paid to employees for the use of musical instruments, where the creative workers of theatres and concert agencies use for their creative activities the musical instruments belonging to them by the right of personal ownership; 19) insurance premiums paid for the benefit of employees by the insurer in respect of additional (voluntary) health insurance where such premiums cover the payment of health care services provided in respect of the insured person; 20) the insurance premiums paid by the employer to an insurance undertaking for employees’ life assurance, insurance against accidents or civil liability insurance, where an insurance contract provides for the payment of insurance, in the event of an insured event, to the employer, and in the case of civil liability insurance – to the employer or to a third party; 21) the monthly benefits paid by the Lithuanian Academy of Sciences to its members for the title of a member of the Lithuanian Academy of Sciences and the Professor Emeritus’ monthly benefits paid by schools of higher education in the amount established by a university’s senate; 22) the value of the income received by an employee from the employer in kind, which shall exempt from personal income tax under the Law on Personal Income Tax; 23) pension benefits paid from an undertaking’s pension funds or from the funds allocated for this purpose to former employees; 24) insurance premiums whose payment is compulsory under laws of the Republic of Lithuania for a supplementary life assurance and health insurance of an employee; 25) the average salary paid to an employee dismissed from work for a period of delay where settlement with the employee is delayed not through the fault of the employee; 26) the bonuses paid to members of a board or a supervisory board; 27) the remuneration paid to authors and owners of related rights in return for the use of works and objects of related rights under the issued licences for the use of works or objects of related rights, also on the compensation paid to the authors and owners of related rights for the lending of books to libraries, reproduction of works by means of reprography and reproduction of works and objects of related rights for personal use, and the income received from the transfer or granting, under a licensing agreement, of the right to use an object of industrial property. Note: Provisions of subparagraph 27 of paragraph 1 shall apply to calculation and payment of state social insurance contributions for 2010 and subsequent years. 2. The persons pursuing individual activities under a business certificate shall be permitted not to pay social insurance contributions (this period shall not be included in the social insurance record), where these persons: 1) receive the social insurance old-age or social insurance work incapacity (invalidity) pension as awarded under the Law on State Social Insurance Pensions; 2) receive the social assistance pension or social assistance compensation, with the exception of the orphan’s social assistance pension awarded under the Law on State Social Assistance Benefits; 3) receive the old-age or work incapacity (invalidity) pension related to social insurance relations (social insurance pension) from an EU Member State, another state of the European Economic Area, the Swiss Confederation or from a country with which the Republic of Lithuania has concluded a treaty on social security; 4) are in imprisonment institutions or have been imposed, by a court’s judgement in accordance with the procedure laid down by the Criminal Code, compulsory medical treatment measures of in-patient observation or reformative sanctions in specialised mental health care institutions; 5) are compulsorily covered by social insurance under laws of the Republic of Lithuania; 6) have attained the pensionable age for a social insurance old-age pension under the Law on State Social Insurance Pensions. 3. Where the economic size of an agricultural holding for the tax period of the previous year from 1 January until 31 December is equal to, or smaller than, 14 European Size Units, farmers and their partners shall be permitted not to pay social insurance contributions in the cases provided for in subparagraphs 1-3 of paragraph 2 of this Article (this period shall not be included in the social insurance record). Article 9. Payment of Social Insurance Contributions 1. The social insurance contributions of the insurer and an insured person shall be calculated, deducted and paid to the Fund by the insurer of the day when the insured person commences to work, regardless of the date of registration of the insurer at a local tax inspectorate. Social insurance contributions for the persons indicated in subparagraph 3 of paragraph 2 of Article 4 of this Law shall be paid by the state institution which has transferred or posted a civil servant to a position at a diplomatic mission, consular post of the Republic of Lithuania, mission of the Republic of Lithuania at an international organisation, international institution or an institution of the European Union or a foreign state’s institution, sent on a special mission or assigned a serviceman in professional military service to fulfil military service at a diplomatic mission, consular post of the Republic of Lithuania, mission of the Republic of Lithuania at an international organisation, a foreign state’s or international military or defence institution, also the delegating institution of the Republic of Lithuania which has delegated the person, the Office of the President of the Republic. Social insurance contributions shall be paid from the appropriations of the state budget of the Republic of Lithuania approved for state institutions. Social insurance contributions shall be paid from the appropriations of the state budget of the Republic of Lithuania approved for state institutions. In respect of the persons receiving income under commission contracts, also the persons receiving income from sports and/or from performing activities (subparagraph 1 of paragraph 1 and paragraph 5 of Article 4 of this Law), the insurer’s and insured person’s social insurance contributions to the Fund shall be calculated, deducted and paid by the insurer on the day of payment of an appropriate remuneration, which shall be considered the day of commencement of a person’s social insurance. 2. The insurer shall pay calculated social insurance contributions not later than by the 15th day of the next month, with the exception of the cases specified in this Law. 3. Agricultural companies, agricultural cooperative societies and farmers may pay social insurance contributions for employees to the Fund in advance at the time specified in the agreements signed by the insurer and a local office of the Fund Board, but not later than by the 15th day of November. Only an agreement on settlement for the current calendar year may be signed per calendar year. 4. The social insurance contributions of the persons indicated in paragraph 3 and subparagraph 1 of paragraph 4 of Article 4 of this Law shall be paid as follows:  individual enterprises shall pay the contributions for owners of these enterprises, general partnerships and limited partnerships – for their members of the registration of an individual enterprise or partnership in the Legal Entities Register, other self-employed persons shall pay the social insurance contributions which they must pay to an account of a local office of the Fund Board from the commencing of activities until completion of activities.  The persons holding business certificates shall pay social insurance contributions for the period of validity of a business certificate. 5. Social insurance contributions for owners of individual enterprises, members of general partnerships, farmers and their partners shall be paid once a month not later than by the last day of the current month. Other persons indicated in paragraph 3 of Article 4 of this Law shall have the right to calculate and pay social insurance contributions in advance and pay them once a month not later than by the last day of the current month. The monthly social insurance contributions in respect of the farmers and their partners, in the case when the economic size of an agricultural holding, for the tax period of the previous year from 1 January until 31 December, is equal to or less than 14 European Size Units, shall be calculated and paid, on a compulsory basis, on the amount of the minimum monthly wage. The monthly social insurance contributions in respect of the farmers and their partners, in the case when the economic size of an agricultural holding, for the tax period of the previous year from 1 January until 31 December, exceeds 14 European Size Units, shall be calculated and paid, on a compulsory basis, on the amount of their own choice, which may not fall below the minimum monthly wage, nor exceed the monthly amount of insured income of the current year as approved by the Government of the Republic of Lithuania. The social insurance contributions paid in advance shall not be repaid and adjusted. Where the base of social insurance contributions depends on a person’s income earned during the previous year, the social insurance contributions (a difference between the amount of the contributions which have been paid and the contributions which are to be paid) must be paid by the last day of a time limit laid down for filing an annual income tax return with the State Tax Inspectorate. Note: Provisions of paragraph 5 shall apply to calculation and payment of state social insurance contributions for 2010 and subsequent years. 6. The persons intending to obtain business certificates for a period shorter than three months must pay social insurance contributions in advance for the entire period of validity of a business certificate. The persons who have acquired business certificates for three months or for a longer period shall pay social insurance contributions within the time limits laid down in paragraph 5 of this Article. In the case when a person who has paid social insurance contributions is not issued a business certificate or the accumulated personal income tax overpayment is repaid for the issued business certificate, the amount of social insurance contributions shall be repaid to the person or included in the future period in the cases and in accordance with the procedure laid down by the rules for the drawing up and implementation of the budget of the State Social Insurance Fund. 7. Social insurance contributions of the persons indicated in subparagraphs 4-6 of paragraph 2, subparagraph 3 of paragraph 4 and subparagraph 1 of paragraph 6 of Article 4 of this Law shall be paid from funds of the State budget by the managers of the appropriations allocated from the state budget as indicated in the Law on the Budget Structure. 8. The persons indicated in paragraph 7 of Article 4 of this Law shall pay social insurance contributions to an account of a local office of the Fund Board. The amount of contributions shall be established by the agreements concluded in accordance with the procedure laid down by the Government. 9. Repealed on 1 January 2010. 10. The procedure for paying social insurance contributions shall be laid down by the rules for the drawing up and implementation of the budget of the State Social Insurance Fund. Article 10. Submission and Safekeeping of Notifications of Calculated Social Insurance Contributions 1. In order to correctly calculate social insurance contributions and social insurance benefits, data shall be accumulated in the Republic of Lithuania register of the persons covered by state social insurance and recipients of state social insurance benefits on insured persons insurers, and recipients of the social insurance contributions. The procedure for accumulating and using these data shall be laid down by the Government or an institution authorised by it. 2. Insurers must submit financial statements, reports about the amounts and social insurance contributions calculated for insured persons and other documents required for the calculation of social insurance contributions and social insurance record. The sample forms of the statements, reports and other documents as well as the time limits of and procedure for submitting them shall be laid down by the Government or an institution authorised by it. 3. All social insurance benefits shall be calculated according to the data available in the Republic of Lithuania register of the persons covered by state social insurance and recipients of state social insurance benefits. Article 11. Social Insurance Benefits Social insurance benefits shall mean the benefits provided for in the Law on State Social Insurance Pensions, the Law on Sickness and Maternity Social Insurance, the Law on Social Insurance of Occupational Accidents and Occupational Diseases and the Law on Unemployment Social Insurance. SECTION THREE RIGHTS, DUTIES AND RESPONSIBILITY OF INSURERS, INSURED PERSONS AND RECIPIENTS OF SOCIAL INSURANCE BENEFITS Article 12. Right to Obtain Information   1. Insurers, insured persons and recipients of social insurance benefits shall have the right to obtain the information accumulated about them in the information system of the administration of the Fund. 2. Information about an insurer, insured person or recipient of a social insurance benefit may be provided to other persons only subject to written consent or request of the insurer, insured person or recipient of the social insurance benefit, with the exception of the cases specified by laws when the consent of the insurer, insured person or recipient of social insurance benefits is unnecessary. The procedure for providing information shall be laid down by the Fund Board. Article 13. Processing of Data about Insurers, Insured Persons and Recipients of Social Insurance Benefits Data about an insurer, insured person or recipient of a social insurance benefit as submitted to the administration agencies of the Fund must be processed under the Law on Legal Protection of Personal Data and other legal acts. Article 14. Duties of Insurers 1. All insurers must be registered at local state tax inspectorates in accordance with procedure laid down by the Law on Tax Administration. 2. Insurers must calculate and pay social insurance contributions correctly and timely according to the rates and within the time limits specified by this Law and other laws.  3. Insurers must submit correct data about themselves and insured persons to local state tax inspectorates and the administration agencies of the Fund in accordance with the procedure laid down by this Law and other legal acts. Article 15. Duties of Insured Persons and Recipients of Social Insurance Benefits Insured persons and recipients of social insurance benefits must submit, in accordance with the procedure laid down by the laws regulating social insurance and other legal acts, the correct information required to effect social insurance to the administration agencies of the Fund. Article 16. Liability for Untimely and Incorrect Payment of Social Insurance Contributions 1. Late payment interest shall be calculated for a delay in the transfer of social insurance contributions to the Fund. The calculation of late payment interest shall commence on the next day following the day on which social insurance contributions had to be paid until the day when the social insurance contributions were paid inclusive. Late payment interest may not be calculated for a period exceeding 180 days of the rise of the right to enforce the recovery of the social insurance contributions. The amount of the late payment interest and procedure for paying it shall be established by the Minister of Finance. 2. Where during a verification it is established that social insurance contributions have been unlawfully reduced, the amount of social insurance contributions which is underpaid shall be calculated and a penalty charge in the amount of 50% amount shall be imposed. In this case, the late payment interest provided for in paragraph 1 of this Article shall not be calculated. Where an insurer has noticed that he has calculated too little social insurance contributions, but has corrected errors voluntarily, paid the unpaid amount of social insurance contributions, submitted adjusted reports and notified of the insured income of insured persons prior to the date indicated in an instruction to verify the insurer (where there is no instruction – prior to the beginning of the verification), no penalty charge shall be imposed for the infringement committed. In this case, late payment interest shall be calculated in accordance with the procedure laid down in paragraph 1 of this Article. 3. The Fund Board or, in the cases provided for in subparagraph 17 of Article 31 of this Law, a local office thereof may, in accordance with the procedure laid down in the rules for the drawing up and implementation of the budget of the State Social Insurance Fund, defer the payment of arrears in social insurance contributions to the Fund for a period of up to one year and allow to pay the deferred amount according to a schedule for the payment of the arrears as agreed upon by an insurer and administration agency of the Fund. Where the payment schedule is violated, the recovery of the penalty charge shall be enforced. 4. The Fund Board or, in the cases provided for in subparagraph 17 of Article 31 of this Law, a local office thereof may, in accordance with the procedure laid down by the rules for the drawing up and implementation of the State Social Insurance Fund budget, postpone the recovery of the late payment interest calculated for insurers in respect of a delay in the transfer of social insurance contributions. 5. The Fund Board may, in accordance with the procedure laid down in the rules for the drawing up and implementation of the budget of the State Social Insurance Fund, exempt an insurer from the payment of the calculated late payment interest and/or penalty charges where the insurer proves that he has calculated too little social insurance contributions as a result of the circumstances beyond his control which he has not predicted and has not been able to predict. 6. Local offices of the Fund Board may defer the recovery of penalty charges for a period of up to one year by establishing a schedule for the payment of a penalty charge in accordance with the procedure laid down by the rules for the drawing up and implementation of the budget of the State Social Insurance Fund. Where the payment schedule is violated, the recovery of the penalty charge shall be enforced. 7. The period of limitation for the enforced recovery of the social insurance contributions unpaid to the Fund by insurers and insured persons as well as calculated late payment interest and penalty charges shall be five years. 8. The right to enforce the recovery of contributions, late payment interest and penalty charges shall arise as of the day following the day whereon the social insurance contributions, late payment interest and penalty charges ought to have been paid. The period of limitation for enforced recovery shall be calculated beginning with the day on which the right to enforce the recovery of the delayed social insurance contributions, penalty charges and late payment interest arises. The period of limitation for enforced recovery shall apply solely to the arrears in social insurance contributions, penalty charges and late payment interest arising from 1 January 2005. 9. Upon the expiry of the period of limitation for enforced recovery of the delayed social insurance contributions, the period of limitation for the recovery of related late payment interest and/or penalty charges which have been calculated shall expire too. 10. In the event of initiation of procedures of the enforced recovery of delayed social insurance contributions, late payment interest and penalty charges in the ways indicated in Article 17 of this Law, they shall be completed, and the calculation of the period of limitation for enforced recovery shall be terminated. Calculation of the terminated period of limitation for enforced recovery shall commence anew as of the disappearance of the circumstances which provided a basis for termination of the period of limitation for enforced recovery. The period preceding termination of the period of limitation shall not be included in the duration of the new period of limitation. 11. Data on insured income and social insurance contributions may be adjusted for a period not exceeding five years of the day of an insurer’s application. At the request of an insured person, data on insured income and social insurance contributions shall, upon the insurer’s payment for the insured person of the social insurance contributions due, be adjusted without having regard to the period of five years. This time limit shall neither apply to a transfer to the Fund of funds in respect of the pension rights acquired by a person from the pension scheme of the institutions of the European Communities under the Law of the Republic of Lithuania on Preservation and Transfer of the Pension Rights of Officials of the Institutions of the European Communities and of Members of the European Parliament. 12. Prior to submitting adjusted statements (reports) and information about a larger income of insured persons for the past period, an insurer must pay to the Fund unpaid social insurance contributions and late payment interest according to the amounts valid during that period. 13. When verifying, calculated social insurance contributions, penalty charges and late payment interest must be paid within the time limits laid down by the Law on Tax Administration. 14. Where the insurer delays the payment of the additionally calculated social insurance contributions as indicated in a verification statement, late payment interest shall be calculated as of the day following the day of entry into force of a decision of the State Tax Inspectorate on approval of the verification statement. Article 17. Ways of Enforcement of the Recovery of Social Insurance Contributions, Penalty Charges and Late Payment Interest 1. Local offices of the Fund Board may enforce the recovery of the social insurance contributions, late payment interest and penalty charges not paid on time in the following ways: 1) by instructing a credit institution to write off the unpaid social insurance contributions, late payment interest and penalty charges from an insurer’s account in the credit institution in accordance with the procedure laid down in Article 754 of the Code of Civil Procedure; 2) by instructing the debtor’s employer, the payer of a pension, scholarship or allowance to recover the unpaid social insurance contributions, late payment interest and penalty charges to the Fund; 3) by instructing a credit institution to write off unpaid social insurance contributions, late payment interest and penalty charges from an insurer’s deposits with the credit institution and the payable interest; 4) by initiating the opening of bankruptcy proceedings. 2. To ensure the recovery of a debt, local offices of the Fund Board may: 1) to instruct credit institutions of the Republic of Lithuania to discontinue the disbursement as well as transfer of funds from insurers’ accounts where they are indebted and do not pay social insurance contributions for a period exceeding 3 months; 2) apply for the registration of compulsory mortgage of an insurer’s property in accordance with the procedure laid down in the Code of Civil Procedure; 3) seize the insurer’s property, where social insurance contributions, penalty charges and/or late payment interest have not been paid to the Fund. 3. Local offices of the Fund Board may pass the recovery of contributions, late payment interest, and penalty charges to bailiffs. Article 18. Liability for the Damage Incurred to the Fund 1. The legal or natural persons through the fault whereof the administration agencies of the Fund have unlawfully paid to insured person certain benefits or the unlawful (guilty) actions whereof have incurred other property damage to the Fund must compensate for the damage in accordance with the procedure laid down by laws. 2. Where social insurance benefits have been unlawfully paid through the fault of their recipients, the overpayment shall, by a decision of the director of a local office of the Fund Board, be recovered in respect of any social insurance benefit received by the recipient and paid to this person from the funds of the Fund. The recovered amount may not exceed per month 50% of the amount of social insurance benefits to which the recipient is entitled. Where the person does not receive any social insurance benefits, the overpayment shall be recovered in court. SECTION FOUR SOCIAL INSURANCE FINANCES AND ASSETS Article 19. Finances of the Fund and Assets Accounted for in the Budget of the Fund 1. The finances of the Fund shall be based on an independent budget of the State Social Insurance Fund of the Republic of Lithuania, which shall not be included in state, municipal and other budgets. 2. The short-term and long-term assets acquired for funds of the Fund or obtained from other entities free of charge shall be accounted for in the budget of the Fund. These assets shall be owned by the State and may be used only for the needs of social insurance and with a view to supplementing the budget of the Fund with additional revenue. In the event of transfer of these assets to other state institutions and agencies, the Fund must be compensated for value thereof. 3. The drawing up and implementation of the budget of the Fund and financial statements shall be regulated by the Law on the Structure of the Budget of the State Social Insurance Fund and the rules for the drawing up and implementation of the budget of the State Social Insurance Fund. 4. The Fund Board shall, in accordance with the procedure laid down by the Government or an institution authorised by it, manage, use and dispose of by the right of trust the assets accounted for in the budget of the Fund. Article 20. Relations between the Budget of the Fund and the State Budget 1. Appropriations shall be allocated from the state budget where expenditure in respect of a type of social insurance increases or revenue decreases as a result of the legal acts adopted by the Seimas or the Government, whereas the rates of social insurance contributions for this type of social insurance remain unchanged or change insignificantly. 2. Appropriations from the state budget or other state funds may be allocated for the expenditure related to the reform of the pension system to compensate for the amounts of social insurance contributions transferred to the pension funds managed by pension accumulation companies. 3. Appropriations from the state budget as allocated to the budget of the Fund shall be established by the Law on the Approval of Indicators of the Budget of the State Social Insurance Fund of a relevant year. Article 21. Relations of the Administration Agencies of the F …