Benefits under the Polish social security system are paid to persons who meet the applicable eligibility requirements, including minimum length-of-coverage and recency-of-work requirements. The Polish social security system, subject to any minimum coverage rules established in Article 9, is obliged under Article 7.1 to combine Polish and U.S. periods of coverage for purposes of computing pro rata benefits. Thus, the Republic of Poland will add a person's U.S. Social Security coverage to periods of Polish coverage, if necessary, to meet benefits qualification requirements. The Republic of Poland will then pay benefits proportional to the amount of coverage credited under the Polish system.
The benefit provisions in Article 9 apply to Polish old-age, disability and survivors benefits; to one-time indemnity payments and benefits awarded as a result of work accidents and occupational diseases; and to funeral grants.
POLISH SOCIAL SECURITY BENEFITS
With some exceptions, the Republic of Poland’s social security system is universal and mandatory. Non-agricultural workers are covered under the general system, called ZUS, and farmers are covered under a separate system, called KRUS. Effective January 1999, Poland implemented a new old-age benefits system with a pay‑as-you-go (PAYG), notional defined contribution first tier and a fully funded, privately managed individual account defined contribution second tier for persons covered by ZUS. Under this system, workers born after 1948 must contribute to the new first tier and workers born 1949-1968 had the option of contributing to the second tier, but they had to exercise this option before 2000. Workers born after 1968 must contribute to both tiers. Workers born before 1949 remain subject to pre-1999 system rules, which govern essentially a defined benefits system. The self‑employed are compulsorily covered under either old or new system rules, depending on year of birth. However, self-employed persons subject to the new system may choose whether to make voluntary health insurance and sickness-maternity contributions. KRUS has its own health insurance contribution rules and rates distinct from those of ZUS.
OLD-AGE BENEFITS
For workers covered by ZUS born before January 1, 1949, the old system method of calculating old-age benefits remains in effect, and the normal retirement age for Polish old-age benefits is 65 for males with 25 years of coverage or 60 for females with 20 years of coverage. Workers who meet the length of coverage requirements at normal retirement age are eligible for guaranteed minimum benefits. Reduced benefits are available to workers who do not meet length of coverage requirements at normal retirement age. Under this system, early full old-age benefits are available for workers in designated occupational categories, for disabled workers and for females with 30 years of coverage. There is no provision for increased old-age benefits based on delayed retirement.
For workers born before January 1, 1949, old-age benefits are calculated under the terms of the system in effect prior to January 1999 and are expressed as:
a designated percentage of the current national average annual wage, plus a designated percentage of the worker’s 10-year average annual indexed earnings amount (called the ‘basis of assessment’) multiplied by the number of contribution years, plus a designated percentage of the worker’s basis of assessment multiplied by a specified number of non-contribution years.
For workers born after 1948, the new social security system provides that old-age benefits are payable at age 65 (males) or age 60 (females). There is no minimum coverage period for these workers.
Under this new system, early retirement based on occupational category is not available, and there is no provision for increased old-age benefits based on delayed retirement.
Guaranteed minimum old-age benefits are available for males with 25 years of coverage and for females with 20 years of coverage.
For workers born after 1948, the new first tier PAYG notional defined contribution formula in effect from January 1, 1999 is applied together with the new second tier fully funded individual account system to calculate old-age benefits as life annuities yielding monthly benefits, and is expressed as:
the sum of collected and indexed contributions, taking into account any contributions prior to January 1, 1999, divided by the average life expectancy at an age equal to the retirement age, expressed in months.
This formula may be applied in modified fashion to certain workers who were born in the period 1949 through 1953, and who had the option of choosing whether to contribute to the post-1998 system’s fully funded second tier. Under a sliding scale based on the year of filing the benefits application, workers who chose not to contribute to the second tier receive old-age benefits calculated partly under the pre-1999 formula, and partly under the post-1998 first tier formula.
Benefits payments for males first receiving them at age 65 or after and for females first receiving them at age 60 or after are not terminated, suspended or decreased as a result of post‑entitlement work or earnings.
KRUS system funding and benefits are based on contributions and general revenue subsidies, and are distinct from those of ZUS. Qualifying factors for old-age benefits are also distinct from those of ZUS.
DISABILITY, WORK ACCIDENT AND OCCUPATIONAL DISEASE BENEFITS
Disability benefits under ZUS are payable if the worker is either completely disabled (that is, cannot do any work) or partially disabled (that is, cannot do work for which the worker is qualified). Generally, the worker must meet minimum and recent coverage requirements. Benefits for a person partially disabled are 75 percent of what they would be if the worker were completely disabled. ZUS physicians make Polish system disability decisions. From January 1, 2006, decisions certifying disability are issued for a period not longer than 5 years, or for a longer period if there is no prognosis of restoration of earning capacity within 5 years. The benefits are payable during the certified period of disability. Disability benefits are calculated and expressed as:
a designated percentage of the worker’s basis of assessment, plus a smaller percentage of the basis of assessment for each contribution year, plus a designated percentage of the basis of assessment for each non-contribution year, plus a designated percentage of the basis of assessment for the number of years between the worker’s filing date and age 60, subject to a limit.
Work accident and occupational disease cases, referred to in the United States as “worker’s compensation” cases, can result in the award of disability benefits.
Disability benefits based on work accident or occupational disease are awarded without regard to the duration of the coverage period or the date of occurrence of incapacity for work.
Disability benefits for a person completely disabled due to a work accident may not be less than 80 percent of the worker’s basis of assessment, and those for a person partially disabled due to a work accident may not be less than 60 percent of the basis of assessment.
Subject to a means test, a training allowance is paid for the first 6 months following disability onset to a worker unable to return to his or her previous work. The training allowance is equal to 75 percent of the worker’s 10-year average indexed monthly earnings. The allowance may be paid at the rate of 100 percent of the worker’s 10-year average indexed monthly earnings if the worker is disabled as a result of a work accident or occupational disease.
KRUS physicians make KRUS system disability decisions, which are generally valid for the period certified by the physician. Qualifying factors, including recent coverage requirements, are distinct from those of ZUS. Funding and benefits are based on contributions and general revenue subsidies, and are also distinct from those of ZUS.
ONE-TIME INDEMNITY PAYMENTS
Lump sum compensation under ZUS is payable to a covered worker at a designated percentage of average earnings according to the designated percentage of medical impairment assessed by a ZUS physician. The impairment must be the result of a work accident or occupational illness, and must be either permanent or protracted (exceeding 6 months, but promising recovery). KRUS determines the amount of lump sum compensation for persons covered under the agricultural system. KRUS lump sum qualification rules are distinct from those of ZUS.
SURVIVORS BENEFITS
ZUS survivors benefits are awarded to surviving spouses (including divorced spouses), children, siblings, parents and grandparents meeting eligibility and dependency requirements.
Survivors benefits are calculated as a percentage of the benefits the deceased worker would have been entitled to receive in the month of death. When a worker dies prior to being entitled to benefits, this amount equals the amount the deceased worker would have received if he or she had been completely disabled (including disabled due to work accident or occupational disease), in the month of death.
All entitled family members acquire the right to one joint survivors benefit. One beneficiary receives 85 percent of the amount that would have been payable to the deceased worker; two receive 90 percent; and, three or more receive 95 percent.
Minimum survivors benefits are generally the same as minimum old-age benefits, but those based on work accident insurance (including benefits for the survivors of workers partially disabled prior to death) are 120 percent of the old-age guaranteed minimum. KRUS survivors benefits are calculated and paid under rules similar, but not identical, to those which govern calculation and payment of ZUS survivors benefits.
FUNERAL GRANTS
The ZUS funeral grant is intended to cover the funeral costs of the insured person, beneficiary, or his or her family members and other eligible persons who on the date of death have not established entitlement to benefits but have met the requirements to qualify. It is payable at the rate of 200 percent of the average national salary in effect on the date of death of the decedent. KRUS funeral grants are generally paid under conditions similar, but not identical, to those which govern the payment of ZUS funeral grants.