Law Amending Law No I-1336 of the Republic of Lithuania on State Social Insurance


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Translated by the Ministry of Social Security and Labour
 
 
LAW
AMENDING LAW NO I-1336 OF THE REPUBLIC OF LITHUANIA ON STATE SOCIAL INSURANCE
 
29 June 2016 No XII-2508
Vilnius
 
 
 
 
 
Article 1. Recast of the Law No I-1336 of the Republic of Lithuania on State Social Insurance
To amend the Law No I-1336 of the Republic of Lithuania on State Social Insurance to read as follows:
 
“LAW
OF THE REPUBLIC OF LITHUANIA
ON STATE SOCIAL INSURANCE
 
CHAPTER I
GENERAL PROVISIONS
 
Article 1. Purpose
“1. This Law sets out the grounds for state social insurance relations including kinds of state social insurance, categories of persons covered by state social insurance, the principles and structure of the management system for state social insurance, the rights, duties and responsibilities of participants of the state social insurance scheme, the calculation, payment and forced recovery of state social insurance contributions, the recovery of overpayments and the procedure for appealing against actions (omission) and decisions of administrations of the State Social Insurance Fund.
2. As far as compulsory health insurance is concerned, this Law shall apply to the extent that the Law of the Republic of Lithuania on health insurance does not directly regulate specific health insurance matters.
 
Article 2. Main definitions for the purposes of this Law
1. Insured persons mean natural persons who, in accordance with the procedure laid down in this Law, pay state social insurance contributions themselves and/or their insurers pay them on their behalf.
2. Automated insurer registration means the registration of persons falling within the categories set by the Government of the Republic of Lithuania as insurers as soon as they obtain that status, which is performed automatically with the tools of the information system of the Board of the State Social Insurance Fund.
3. Insurers mean legal entities, other organisations or their branches (affiliates or representations) as well as natural persons who, in accordance with the statutory procedure, must pay state social insurance contributions.
4. Insured event means a legal fact giving entitlement to a state social insurance benefit in accordance with the statutory procedure.
5. Insured income means all income of a person or other amounts in respect of which, in accordance with the procedure laid down in this law, state social insurance contributions are accounted and must be paid as well as benefits for sickness (including those paid by the employer for the first two days of sickness), professional rehabilitation, maternity, paternity and childcare due to a person in accordance with the Law of the Republic of Lithuania on Sickness and Maternity Social Insurance, benefits for accidents at work or occupational diseases due in accordance with the Law of the Republic of Lithuania on Social Insurance of Accidents at Work and Occupational Diseases and benefits for unemployment social insurance and part-time work due in accordance with the Law of the Republic of Lithuania on Unemployment Social Insurance.
6. Cumulative pension contribution means the part of the pension social insurance contribution and an additional pension contribution paid by the participants and accrued in accordance with the Law of the Republic of Lithuania on the Accumulation of Pensions.
7. Cumulative pension benefits mean benefits stipulated in the Law on the Accumulation of Pensions which are paid out using the pension assets accrued by the person in the pension fund.
8. Pension accumulation company means a pension fund management undertaking or a life assurance undertaking holding a permit or licence issued by a supervisory authority to engage in pension accumulation activity within the territory of the Republic of Lithuania as provided for in the Law on the Accumulation of Pensions.
9. Self-employed persons mean owners of individual enterprises; members of small partnerships; full members of general partnerships and limited partnerships; persons engaging in individual activity within the meaning of the Law of the Republic of Lithuania on Individual Income Tax (lawyers, assistant lawyers, notaries, bailiffs, persons holding business certificates and other persons); natural persons engaging in individual agricultural activity where the economic size of an agricultural holding or a farm based on the calculations performed by the state enterprise the Agricultural Information and Rural Business Centre for the previous year's taxation period between 1 January and 31 December equals 8 or more units of economic size (‘farmers and their partners’); members of households within the meaning of the Law on Households (‘members of a household’); and persons receiving income on the grounds of copyright contracts or from sports or performance activities (except for persons listed in Article 4(1)).
10. State social insurance contributions (‘social insurance contributions’) mean contributions of the statutory amount to the State Social Insurance Fund paid by insured persons and/or their insurers.
11. Debt on state social insurance contributions, late-payment fines, penalties and interest means the amount of state social insurance contributions, late-payment fines, penalties and/or interest due and overdue in accordance with the statutory procedure.
12. State social insurance benefits (‘social insurance benefits’) mean statutory social insurance benefits to which insured persons and other natural persons referred to in legislation become entitled in the case of an insured event.
13. Administrations of the State Social Insurance Fund (‘the Fund administrations’) mean the Board of the State Social Insurance Fund under the Ministry of Social Security and Labour (‘the Fund Board’), regional branches of the Fund Board and other establishments of the State Social Insurance Fund relating to the administration of the State Social Insurance Fund. The Fund administrations are official bodies (the Fund administrations, except for the Fund Board, are hereafter referred to as regional branches of the Fund Board).
14. State Social Insurance Fund (‘the Fund’) means centralised targeted financial and tangible resources managed in accordance with the procedure laid down by this Law which are included in accounts within the Fund budget unbundled from the State and municipal budgets and used for financing, managing and administering social insurance of pensions, sickness, maternity, unemployment and accidents at work and occupational diseases.
15. State social insurance (‘social insurance’) means a part of the state social security system fully or partially reimbursing insured persons and, in cases stipulated by laws, their family members for loss of labour income due to insured events or covering incremental costs.
16.  Country’s average wage shall mean the mean of average gross monthly wages of the country’s workers for four quarters of a calendar year published by Statistics Lithuania (including the data of wages at individual enterprises).
17. Economic size of an agricultural holding or a farm means the size establishing the total standard gross margin calculated in accordance with the procedure laid down by the Minister for Agriculture of the Republic of Lithuania by dividing by the unit of economic size, which is EUR 1 200.
 
Article 3. Kinds of social insurance
1. This Law covers the following kinds of social insurance:
(1) pension social insurance;
(2) sickness social insurance;
(3) maternity social insurance;
(4) unemployment social insurance;
(5) social insurance of accidents at work and occupational diseases.
2. The kinds of social insurance of pensions, sickness, maternity, unemployment and accidents at work and occupational diseases are governed by this Law and other legislation specific to each kind of social insurance.
 
Article 4. Social insurance for persons having labour relations or relations essentially equal to labour relations
1. Persons employed under employment contracts within the territory of the Republic of Lithuania (including persons posted to the Republic of Lithuania for a period of more than one year) or outside of the territory of the Republic of Lithuania but under employment contracts concluded with insurers registered in the Republic of Lithuania, unless otherwise provided for in international treaties of the Republic of Lithuania or European Union regulations harmonising social security systems, persons in paid elected or appointed membership positions, persons related with the insurer through employment or equivalent relations within the meaning of the Law on Individual Income Tax and at the same time receiving income from sports or performance activities as well as persons listed in paragraphs 2, 3, 4 and 5 of this Article and Articles 6(1), (2) and (3) who are permanent residents of Lithuania within the meaning of the Law on Individual Income Tax (‘permanent residents of Lithuania’) receiving income under copyright contracts from the insurer which is a Lithuanian entity within the meaning of the Law on Individual Income Tax (‘a Lithuanian entity’) shall be covered by social insurance of pensions, sickness, maternity, unemployment, accidents at work and occupational diseases.
2. Politicians, judges, officials and civil servants (except for civil servants referred to in paragraphs 3 and 4) referred to in the Law of the Republic of Lithuania on Work Remuneration for State Politicians and Civil Servants, the Law of the Republic of Lithuania on Salaries of Judges and the Law of the Republic of Lithuania on Civil Service, persons referred to in the Law of the Republic of Lithuania on the Delegation of Persons to International and European Union Institutions or public authorities of other countries whose wages and related social insurance contributions are paid by the delegating authority of the Republic of Lithuania (‘delegated persons’) and paid persons appointed by the Seimas of the Republic of Lithuania (‘the Seimas’), the President of the Seimas, the President of the Republic or the Prime Minister shall be covered by social insurance of pensions, sickness, maternity, unemployment, accidents at work and occupational diseases.
3. Internal service officials and officials of the Department of Prisons under the Ministry of Justice of the Republic of Lithuania and institutions reporting to it shall be covered by social insurance of pensions, sickness, maternity, unemployment, accidents at work and occupational diseases.
4. Military professionals within the national defence system, military volunteers, other active reserve military staff and standby military staff deployed for exercises and training or for service shall be covered by social insurance of pensions, sickness, maternity, unemployment, accidents at work and occupational diseases.
5. Undercover members of criminal intelligence services paid a salary under written undercover cooperation contracts concluded with them shall be covered by pension social insurance during a period specific in those undercover cooperation contracts.
6. Persons receiving a share of profits or remuneration for their activities with a supervisory board or a management board or a loan committee paid instead of or along with a share of profits and heads of small partnerships who are not members of those small partnerships in accordance with the Law of the Republic of Lithuania on Small Partnerships shall be covered by pension social insurance.
7. Social insurance contributions for persons listed in paragraphs 1 to 6 shall be paid by insured persons and insurers.
 
Article 5. Social insurance of self-employed persons
1. Permanent residents of Lithuania who are not listed in Article 4(1) and receive income under copyright contracts from the insurer, a Lithuanian entity, shall be covered by social insurance of pensions, sickness and maternity, except where such income is received as a result of individual activity. Permanent residents of Lithuania receiving income from sports or performance activities within the meaning of the Law on Individual Income Tax paid by the insurer, a Lithuanian entity, with which they are not related through employment or equivalent relations within the meaning of the Law on Individual Income Tax shall be covered by social insurance of pensions, sickness and maternity, except where such income is received as a result of individual activity. Permanent residents of Lithuania engaging in relevant (creative, performance or sports) individual activity shall be subject to the provisions of paragraph 2 of this Article. The provisions of this Article shall also apply to persons who, in accordance with international treaties of the Republic of Lithuania or European Union regulations harmonising social security systems, shall be subject to legislation of the Republic of Lithuania in the area of social insurance.
2. Farmers and their partners, members of a household and persons engaging in individual activity within the meaning of the Law on Individual Income Tax, except those referred to in paragraph 3 of this Article, shall be covered by social insurance of pensions, sickness and maternity. Owners of individual enterprises, members of small partnerships and full members of partnerships shall be covered by social insurance of pensions, sickness, maternity and unemployment where they receive income referred to in Article 10(3).
3. Persons engaging in individual activity on the grounds of a business certificate shall be covered by pension social insurance.
4. Social insurance contributions for persons listed in paragraph 1 of this Article shall be paid by insured persons and insurers. Social insurance contributions for persons listed in paragraph 2 of this Article shall be paid by those persons proper or by insurers on their behalf. Social insurance contributions for persons listed in paragraph 3 of this Article shall be paid by those persons proper.
 
Article 6. Persons covered by social insurance due to a particular social status
1. During the period of living abroad together with a civil servant or delegated person where such civil servants or delegated persons are delegated or posted to work in a diplomatic mission or a consular unit of the Republic of Lithuania, a representation of the Republic of Lithuania in an international organisation, an international or European Union institutions or a public authority of other countries sent to work in a special mission or where they live together with a military professional where such a military professional is deployed to serve in a diplomatic mission or a consular unit of the Republic of Lithuania, a representation of the Republic of Lithuania in an international organisation or a foreign or international military or defence authority, spouses of civil servants, military professionals and delegated persons as well as the spouse of the President of the Republic before reaching the old-age retirement age and having no insured income shall be covered by social insurance of pensions, maternity and unemployment at the cost of the State. The persons referred to in this paragraph shall be insured at the cost of the State on the basis of 0.5 of the official salary of a civil servant or military professional or 0.5 of the wages of a delegated person under a delegation contract, or 0.5 of the salary of the President of the Republic. Spouses of delegated persons shall only be covered where the salary of the delegated person and related social insurance contributions are paid by the delegating authority of the Republic of Lithuania. The spouse of the President of the Republic before reaching the old-age retirement age and having no insured income shall be covered during the term of office of the President of the Republic.
2. One of the parents (step-parents) chosen at the discretion of the family or a person appointed a child’s guardian in accordance with the statutory procedure bringing up a child under the age of 3 years shall be covered by pension and unemployment social insurance at the cost of the State. Persons referred to in this paragraph shall only be covered at the cost of the State where they have no insured income, and social insurance contributions shall be calculated on the minimum monthly salary approved by the Government of the Republic of Lithuania (‘the Government’), or where their income is lower than the total minimum monthly salary approved by the Government for the respective period. Persons referred to in this paragraph whose total insured income during calendar months of the respective period is lower than the total minimum monthly salary approved by the Government for the same period shall be covered at the cost of the State paying the rest of the amount of social insurance contributions up to the total minimum monthly salary approved by the Government.
3. One of the parents (step-parents) of a disabled person with an established special need for continuous care or a person appointed the official guardian or carer for that disabled person in accordance with the statutory procedure who has not reached the old-age retirement age and takes care of the disabled person at home shall be covered by pension and unemployment social insurance at the cost of the State. Persons referred to in this paragraph shall only be covered at the cost of the State where they have no insured income, and social insurance contributions shall be calculated on the minimum monthly salary approved by the Government, or where their income is lower than the total minimum monthly salary approved by the Government for the respective period. Persons referred to in this paragraph whose total insured income during calendar months of the respective period is lower than the total minimum monthly salary approved by the Government for the same period shall be covered at the cost of the State paying the rest of the amount of social insurance contributions up to the total minimum monthly salary approved by the Government. This provision shall also apply to one of the parents (step-parents), guardian or carer providing home care for a permanently disabled person having been granted that status before 1 July 2005.
4. Military staff in compulsory initial military service in the Army of the Republic of Lithuania and persons in alternative national defence service shall be covered at the cost of the State by social insurance of pensions, maternity, unemployment and accidents at work and occupational diseases where social insurance contributions are calculated on the basis of the minimum monthly salary set by the Government.
5. Students of vocational training and higher education establishments and persons referred for vocational training or professional rehabilitation by regional labour exchange branches throughout the period of their internship at an establishment or enterprise as well as persons studying under vocational training programmes at a training institution for penitentiary personnel, at a vocational training institution for interior matters or attending an initial training course at a vocation training institution for interior matters and having signed a contract for joining the internal service or serving in the military while studying at a military training establishment (military students) throughout their training and exercise period shall be covered at the cost of the State only by social insurance of accidents at work and occupational diseases where social insurance contributions are calculated on the basis of the minimum monthly salary set by the Government.
6. Spiritual guides of conventional and other State-recognised religious communities and monks shall be covered at the cost of the State by pension social insurance. The persons referred to in this paragraph shall only be covered at the cost of the State where they do not have the compulsory state social pension insurance record required for the pension, do not receive state social insurance pension and the amount of their insured income per calendar year is lower than the amount of 12 minimum monthly salaries approved by the Government for the respective year, the State paying the rest of the amount of social insurance contributions that is falling short of the amount of 12 minimum monthly salary approved by the Government.
7. Persons of working age who hold the status of an artist shall be covered at the cost of the State by social insurance of pensions, sickness and maternity on the basis of the minimum monthly salary approved by the Government where they do not have any insured income. Persons of working age who hold the status of an artist and whose total insured income during a calendar year is lower than the amount of 12 minimum monthly salaries approved by the Government for the respective year shall be covered at the cost of the State paying the rest of the amount of social insurance contributions up to the amount of 12 minimum monthly salaries approved by the Government. Where insurance is at the cost of the State, social insurance contributions shall be paid by the manager of state budget appropriations on the grounds of approved rates for the insurer and the insured person.
8. Persons receiving wages who are in social and psychological rehabilitation establishments shall only be covered throughout their period of employment by social insurance of accidents at work and occupational diseases. In that case social insurance contributions shall be paid by insurers.
9. Persons receiving wages who are sentenced to imprisonment shall only be covered throughout their period of employment by social insurance of accidents at work and occupational diseases. In that case social insurance contributions shall be paid by insurers.
10. Persons in voluntary internship in accordance with the procedure laid down in the Law of the Republic of Lithuania on Employment shall be covered at the cost of the State throughout the period of validity of the voluntary internship contract by social insurance of accidents at work and occupational diseases where social insurance contributions are calculated on the basis of the minimum monthly salary approved by the Government.
11. Specific provisions on insurance at the cost of the State where a person may be covered at the cost of the State under several paragraphs of this Article shall be stipulated in the Rules for the Drawing Up and Discharge of the Budget of the State Social Insurance Fund approved by the Government (‘the Rules for the Drawing Up and Discharge of the Budget of the State Social Insurance Fund’).
 
Article 7. Persons who may be covered by voluntary social insurance and persons who may participate in pension accumulation
1. Permanent residents of the Republic of Lithuania or of a European Union Member State older than 16 years, unless they have reached the old-age retirement age or are deemed incapable or partially incapable of work (before 1 July 2005 – invalids), may choose to be covered by voluntary sickness social insurance to receive sickness benefits and by maternity social insurance to receive maternity benefits during the period when they are not covered by that kind of social insurance. The procedure for the payment of social insurance contributions and the conclusion of contracts shall be laid down by the Government or an institution authorised thereby.
2. Persons covered by pension social insurance, except for those who have reached the old-age retirement age, may choose to save a part of social insurance contributions for the pension with pension accumulation companies in accordance with the Law of the Republic of Lithuania on Reform of the Pension System and the Law on the Accumulation of Pensions. Cumulative pension contributions for persons covered at the cost of the State shall not be calculated and paid. Cumulative pension benefits shall be paid in accordance with the procedure laid down in the Law on the Accumulation of Pensions.
 
CHAPTER II
SOCIAL INSURANCE CONTRIBUTIONS AND BENEFITS
 
Article 8. Social insurance contributions and rates
1. Social insurance contributions intended to fund benefits for the kinds of social insurance referred to in Article 3(1) shall be paid to the Fund budget.
2. Rates of social security contributions and their amounts (shares thereof) for individual kinds of social insurance shall be approved by the Law of the Republic of Lithuania on the Approval of Indicators of the Budget of the State Social Insurance Fund for the respective year. The rate of unemployment insurance contributions under fixed-term employment contracts set by the Law on the Approval of Indicators of the Budget of the State Social Insurance Fund for the respective year shall be doubled.
3. Where social insurance contributions are paid in accordance with the procedure laid down in the Law of the Republic of Lithuania on Tax Administration, the principle of substance over form shall apply.
4. The rate of the part of the social insurance contribution for pension of insured persons participating in pension accumulation which is transferred to pension accumulation companies under the Law on Reform of the Pension System shall be established in accordance with the Law on the Approval of Indicators of the Budget of the State Social Insurance Fund for the respective year.
 
Article 9. Establishing the social insurance record
1. The social insurance record shall be established on the grounds of the period of accounting social insurance contributions to the Fund and the periods of receiving social insurance benefits from the Fund for sickness, professional rehabilitation, maternity, paternity, childcare, sickness as a result of accidents at work and occupational diseases, unemployment and part-time employment. The social insurance record for self-employed persons (except for persons who receive income from sports or performance activities or under copyright contracts) shall be established on the basis of social insurance contributions paid. The payment of these contributions on the basis of the minimum monthly salary approved by the Government shall grant one month’s length of social insurance record. Where contributions are paid on the basis of a smaller or larger amount than the minimum monthly salary, the social insurance record shall be proportionately shorter or longer.
2. The social insurance record for different social insurance benefits shall be established by laws governing the respective kinds of social insurance.
 
Article 10. Income for which social insurance contributions are calculated
1. Social insurance contributions for insured persons referred to in Article 4 shall be calculated on the basis of the salary amount of each insured person that equals at least the minimum hourly rate approved by the Government or the minimum monthly salary approved by the Government recalculated in proportion to the time worked, or on the basis of income received from sports or performance activities and/or income received under copyright contracts, irrespective of the sources of payment including (except for income and cases referred to in Article 11):
(1) the salary due to the insured person and all additional remuneration (specific hourly rates; monthly payments; higher remuneration rates than usual; remuneration for time used for preparations for travel and settlement in a new place; other forms of remuneration; other payments associated with employment relations) as provided for in the Labour Code of the Republic of Lithuania and other legislation, in any way calculated by the insurer for work performed by the insured person;
(2) the salary due to the insured person which includes the official salary, bonuses, supplements, remuneration for work during holidays, night time and overtime and standby duty and for participation in project activities as provided for in the Law on Civil Service and other legislation governing such payments;
(3) the salary due to the insured person as provided for in the Law on Work Remuneration for State Politicians and Civil Servants and the Law on Salaries of Judges;
(4) bonuses and severance payments due to persons referred to in Articles 4(1) to (4);
(5) compensations due for annual and ad hoc leaves (except for pregnancy and childbirth leave, parental leave and childcare leave), cash payments due for unused annual leave and compensations payable in accordance with Article 218(4) of the Labour Code or downtime;
(6) bonuses, benefits and other payments;       
(7) remuneration, bonuses, allowances and other payments to undercover participants in criminal activity on the grounds of written undercover cooperation contracts in accordance with the procedure laid down by the management of the central authorities of criminal intelligence entities;
(8) compensations and other payments received from an international or European Union institution or public authorities of other countries unless social insurance contributions have been calculated for them in accordance with legislation under which such benefits are due;
(9) income due to heads of small partnerships who are not members of those small partnerships in accordance with the Law on Small Partnerships under civil (service) contracts for managing activities which is subject to individual income tax in accordance with the Law on Individual Income Tax;
(10) shares of profits;
(11) remuneration for activity within a supervisory board or a management board or a loan committee paid instead of or along with a share of profits.
2. Social insurance contributions of persons referred to in Article 5(1) shall be calculated on the basis of remuneration due on the grounds of contracts concluded.
3. Social insurance contributions for persons listed in Article 5(2) shall be calculated as follows:
(1) the base of social insurance contributions of the owner of an individual enterprise, a member of a small partnership and a full member of a partnership as of the commencement of their activity shall include the amount taken out by the owner of an individual enterprise, a member of a small partnership and a full member of a partnership for personal needs declared with the State Tax Inspectorate under the Ministry of Finance of the Republic of Lithuania (‘the State Tax Inspectorate’) as income associated with employment or equivalent relations. The base of social insurance contributions of the owner of an individual enterprise, a member of a small partnership and a full member of a partnership as of the commencement of their activity shall include the amount of funds taken out by the owner of an individual enterprise, a member of a small partnership and a full member of a partnership for personal needs declared with the State Tax Inspectorate as income associated with employment or equivalent relations where social insurance contributions for those persons are paid by the individual enterprise or the small partnership, or the general partnership, or the limited partnership or they pay the contributions as persons engaging in individual activities within the meaning of the Law on Individual Income Tax, except for those who engage in individual activity on the grounds of a business certificate, or they are persons referred to in Article 4, they are imprisoned or by a court ruling in accordance with the procedure laid down in the Criminal Code of the Republic of Lithuania are subject to forced inpatient medical treatment or correctional measures in specialised mental health institutions, or are granted state social insurance pensions for old age or lost capacity for work (disability), old age or lost capacity for work (disability) (social insurance) pensions relating to social insurance in another European Union Member State, in a country of the European Economic Area, the Swiss Confederation or a country with which the Republic of Lithuania has an international agreement on the application of social security, or where the owner of an individual enterprise, a member of a small partnership or a member of a partnership is no older than 29 years (applicable to the period before the end of the calendar year during which the person reaches the age of 29 years). The base of social insurance contributions of the owner of an individual enterprise, a member of a small partnership and a full member of a partnership as of the commencement of their activity shall include the amount of funds taken out by the owner of an individual enterprise, a member of a small partnership and a full member of a partnership for personal needs which is declared with the State Tax Inspectorate as income associated with employment or equivalent relations and which may not be lower than the minimum monthly salary approved by the Government per month of a calendar year. Where a person is the owner of an individual enterprise and a member of a small partnership, and/or a full member of a partnership, or a full member of several small partnerships or partnerships, social insurance contributions on the basis of the minimum monthly salary shall be calculated by the insurer who is registered the earliest. These provisions shall not apply where an individual enterprise, a small partnership or a partnership holds the status of turning or being bankrupt, or has temporarily suspended its activity and declared it in accordance with the procedure laid down in the Law on Tax Administration and relevant implementing legislation;
(2) the base of social insurance contributions of persons engaging in individual activities within the meaning of the Law on Individual Income Tax shall include the amount of 50% of taxable income from individual activities (without deducting compulsory health insurance and social insurance contributions). The base of social insurance contributions of farmers and their partners shall include the amount of taxable income from each person’s agricultural activity (without deducting compulsory health insurance and social insurance contributions). The base of social insurance contributions of farmers and their partners whose income during the tax period is not subject to individual income tax in accordance with the provisions of the Law on Individual Income Tax and who do not declare income from individual agricultural activity shall be the sum of 12 minimum monthly salaries approved by the Government. The base of social insurance contributions of members of a household shall be income for the subsistence of a member of a household as provided for in the Law on Households.
4. Social insurance contributions of persons referred to in Article 5(3) shall be calculated on the basis of the minimum monthly salary.
5. The base of social insurance contributions of persons referred to in Articles 5(1) and (2) (except for farmers and their partners and members of households) that must be applied by all insurers during a calendar year may not exceed the sum of 28 ANWs for the previous year. The base of social insurance contributions of farmers and their partners during a calendar year may not exceed the sum of 7 ANWs for the previous year.
6. Social insurance contributions shall be calculated on the basis of the base of social insurance contributions set in proportion to the period of activity where individual enterprises, small partnerships, partnerships or self-employed persons have not been active throughout the whole of the tax year.
7. The base of social insurance contributions of persons insured in accordance with this Law, except for paragraph 5 of this Article that must be applied by all insurers during and insured persons when calculating social insurance contributions during a calendar year may not exceed 120 ANWs for the previous year. The base of social insurance contributions of persons insured in accordance with this Law between 2018 and 2022 shall be reduced by 12 ANWs each calendar year. The base of social insurance contributions of persons insured in accordance with this Law after 2022 that must be applied by all insurers during and insured persons when calculating social insurance contributions during a calendar year may not exceed 60 ANWs for the previous year.
8. Social insurance contributions paid during the year in excess of the limit set in paragraph 7 shall be returned to insured persons and insurers by 31 May of the following year.
 
Article 11. Income and cases where no social insurance contributions are calculated
1. Social insurance contributions shall not be calculated on:
(1) the amount of the benefit paid out by an employer to an insured person in the case of death of that insured person’s spouse, children (step-children) or parents (step-parents) as well as in the case of natural disasters, fires and explosions, not exceeding 5 minimum monthly salaries approved by the Government. The amount on which social insurance contributions are not calculated shall be increased as many times as many deceased family members of the insured person referred to in this paragraph are paid the benefit for;
(2) the benefit which the insurer pays to the spouse, children (step-children) or parents (step-parents) of a deceased insured person;
(3) payments for accommodation rental, electricity and heating, hot and drinking water, utilities and communications services, use of personal transport and food for employees paid in the amount and in the cases stipulated in legislation;
(4) benefits for covering posting expenses not subject to individual income tax and posting expenses for persons travelling abroad for official purposes where only a return trip is paid for (including visa arrangements, sickness insurances and other pertinent expenses relating to the crossing of state borders) paid in the amount and in the cases stipulated in legislation;
(5) statutory payments to compensate for material damage relating to personal injury, trauma or health disorder or the death of the bread-winner;
(6) amounts paid by enterprises, establishments and organisations for personnel training, professional development and retraining. These amounts shall not include scholarships paid to an employee or other additional payments relating to personnel training, professional development or retraining;
(7) sickness benefits paid from an employer’s funds for the first two days of incapacity;
(8) late-payment fine for the late payment of benefits relating to employment relations;
(9) the insurer’s funds paid for personnel vaccination from contagious diseases and mandatory preventive health checks of personnel;
(10) amounts awarded by a court and received for compensate for material damage, except for loss of income, and non-material damage;
(11) scholarships, allowances and compensations for students of educational establishments for covering expenses on travel and studies abroad which are paid from the State and municipal budgets of the Republic of Lithuania, funds of non-profit entities established in accordance with the statutory procedure in the Republic of Lithuania and other countries where a scholarship beneficiary is not a participant or employee of the entity paying the scholarship and where that scholarship is not related to works performed or to be performed or services provided or to be provided by the scholarship beneficiary for those entities;
(12) compensations paid when admitting or transferring an employee to another location;
(13) compensations for the use of instruments or assets owned by employees;
(14) compensations paid to maintain spouses and children (step-children) of civil servants, delegated persons or military professionals going abroad together with those persons;
(15) compensations of expenditure relating to work abroad paid to civil servants, delegated persons and military professionals as well as the staff of the representation who are members of the diplomatic staff or the administrative technical staff of the representation;
(16) wages received from an international or European Union institution or public authorities of other countries where social insurance contributions have been calculated for them in accordance with legislation under which institutions pay the wages;
(17) insurance contributions paid by the insurer for the benefit of employees for supplementary (voluntary) health insurance where the object of insurance is the payment for healthcare services of the insured person and where within the tax period they do not exceed 25% of employment-related income calculated for an employee for the respective tax period;
(18) insurance contributions paid by an employer to an insurance company for employees’ life, accident or civil liability insurance where an insurance contract sets out that in the case of an insured event the insurance cover is to be paid to the employer while in the case of civil liability – to the employer or a third party;
(19) the value of income received by an employee from an employer in kind which is not subject to individual income tax under the Law on Individual Income Tax;
(20) pension payments paid from an undertaking’s pension funds or target funds to former employees;
(21) insurance contributions the payment of which is required in accordance with legislation of the Republic of Lithuania for supplementary life and health insurance of an employee;
(22) average wages provided for in Article 147 of the Labour Code paid to a dismissed employee for the delay where no payment is made to the employee through no fault of that employee;
(23) remuneration paid through collective administration measures to authors and related rights entities for the use of works and the subject matter of related rights under licences issued for the use of works and the subject matter of related rights as well as compensations paid to authors and related rights entities for the use books in libraries, reprographic reproductions of works and reproduction of works and the subject matter of related rights for personal purposes, and income received for the right to use industrial property transferred or provided under a licensing agreement;
(24) the amount of the sales value added tax accounted for goods supplied and services provided;
(25) shares received under options where entitlement to shares is granted to employee no earlier than in 3 years.
2. Persons engaging in individual activity on the grounds of a business certificate, farmers and their partners may pay no social insurance contributions (that period shall not be included in the social insurance record and throughout that period they shall not be deemed covered by social insurance) where those persons:
(1) receive (are given) social insurance pensions for old-age or social insurance pensions for lost capacity for work (disability) granted under the Law of the Republic of Lithuania on State Social Insurance Pensions;
(2) receive social assistance pensions or compensatory allowances, except for social assistance pensions for orphans allocated in accordance with the Law of the Republic of Lithuania on Social Assistance Pensions;
(3) receive (social insurance) pensions for old age or lost capacity for work (disability) relating to social insurance relations from another European Union Member State, a country of the European Economic Area, the Swiss Confederation or a country with which the Republic of Lithuania has an international treaty on the application of social security;
(4) are imprisoned or by a court ruling in accordance with the procedure laid down in the Criminal Code are subject to forced inpatient medical treatment or correctional measures in specialised mental health institutions;
(5) are covered by social insurance in accordance with legislation of the Republic of Lithuania;
(6) have reached the old-age retirement age for social insurance in accordance with the Law on State Social Insurance Pensions.
3. Farmers and their partners whose income during the tax period are not subject to individual income tax under the provisions of the Law on Individual Income Tax may pay no social insurance contributions (that period shall not be included in the social insurance record and throughout that period they shall not be deemed covered by social insurance) where those persons are no older than 29 years (applicable to the period before the end of the calendar year during which the person reaches the age of 29 years).
 
Article 12. Payment of social insurance contributions
1. Social insurance contributions to the Fund from the insurer and the insured person shall be calculated, deducted and paid by the insurer from the day on which the insured person starts to work, irrespective of the insurer’s date of registration in the Taxpayers Register. Social insurance contributions for persons referred to in Article 6(1) shall be paid by a public authority having transferred or sent a civil servant to work in a diplomatic mission or a consular unit of the Republic of Lithuania, a representation of the Republic of Lithuania in an international organisation, an international or European Union institutions or a public authority of other countries, or sending to work in a special mission or deploying a military professional to serve in a diplomatic mission or a consular unit of the Republic of Lithuania, a representation of the Republic of Lithuania in an international organisation or a foreign or international military or defence authority, as well as by a delegating authority of the Republic of Lithuania having delegated the person or the Office of the President of the Republic. Social insurance contributions shall be paid from State budget appropriations of the Republic of Lithuania allocated to respective authorities. Social insurance contributions to the Fund of the insurer and the insured person for persons receiving income under copyright contracts and for persons receiving income from sports or performance activities (Articles 4(1) and 5(1)) shall be calculated, deducted and paid by the insurer on the day of payment of respective remuneration which is deemed the start date of the person’s social insurance. Social insurance contributions to the Fund for persons holding the status of an artist as referred to in Article 6(7) shall be calculated, in accordance with the procedure and deadlines set in the Rules for the Drawing Up and Discharge of the Budget of the State Social Insurance Fund, by the Fund Board and paid by the State budget appropriations manager referred to in the Law of the Republic of Lithuania on the Approval of Financial Indicators of the State and Municipal Budgets for the respective year, in accordance with the procedure approved by the Government from the Social security programme for artists.
2. The insurer shall pay any social insurance contributions due no later than by the 15th day of the following month, unless otherwise provided for in this Law.
3. Agricultural undertakings, agricultural cooperatives and farmers may pay social insurance contributions to the Fund in advance, at the time indicated in contracts signed by and between the insurer and the regional branch of the Fund Board but no later than by 15 November. A contract for payments for the current calendar year may be signed during a calendar year.
4. Social insurance contributions for persons referred to in Articles 5(2) and (3) shall be paid as follows: individual enterprises shall pay contributions for owners of those enterprises, small partnerships – for their members, general partnerships and limited partnerships – for their full members, households – for members of the household, as of the date of registration of that individual enterprise, small partnership, partnership or household in the Register of Legal Entities, while other self-employed persons shall pay respective social insurance contributions due to the account of the Fund for the period between the start and the end of their activity. Persons holding business certificates shall pay social insurance contributions for the period of validity of the business certificate.
5. Social insurance contributions of owners of individual enterprises, members of small partnerships, full members of partnerships, farmers and their partners and members of households shall be paid once a month no later than by the last day of the current month. Other persons referred to in Article 5(2) may calculate and pay social insurance contributions in advance and pay them once a month no later than by the last day of the current month. Monthly social insurance contributions of farmers and their partners shall be calculated and paid on the basis of the amount that they choose themselves. Monthly social insurance contributions of farmers and their partners whose income during the tax period is not subject to individual income tax in accordance with the provisions of the Law on Individual Income Tax and who do not declare income from individual agricultural activity shall be calculated and paid on the basis of the minimum monthly salary approved by the Government. Social insurance contributions (the difference between contributions paid and contributions due) where their base depends on the person’s income received during the past year shall be paid before the last day for the submission of the annual income tax return to the State Tax Inspectorate.
6. Persons intending to obtain a business certificate for a period shorter than 3 months shall pay social insurance contributions for the entire period of validity of the business certificate in advance. Persons obtaining business certificates for 3 months or more shall pay social insurance contributions on a quarterly basis no later than by the 15th day of the first month of the following quarter. Where a business certificate is not issued to a person having paid social insurance contributions or individual income tax overpaid for a business certificate issued is repaid, the amount of social insurance contributions shall be returned to the person or included in the following period in the case and in accordance with the procedure laid down in the Rules for the Drawing Up and Discharge of the Budget of the State Social Insurance Fund.
7. Social insurance contributions for persons referred to in Articles 6(2) to (6) and (10) shall be paid from the State budget by State budget appropriations manages listed in the Law of the Republic of Lithuania on the Structure of the Budget.
8. Persons referred to in Article 7(1) shall pay social insurance contributions to the Fund’s account. The amount of social insurance contributions shall be indicated in contracts concluded in accordance with the procedure laid down by the Government.
9. The procedure for the payment of social insurance contributions shall be laid down in the Rules for the Drawing Up and Discharge of the Budget of the State Social Insurance Fund.
 
Article 13. Submission and storage of notices on social insurance contributions calculated
1. With a view to ensuring the accurate calculation of social insurance contributions and social insurance benefits, the Register of the Republic of Lithuania of persons covered by state social insurance and beneficiaries of state social insurance benefits shall collect data about insured persons, their insurers and recipients of social insurance benefits. The procedure for the accumulation and use of those data shall be laid down by the Government or an institution authorised thereby.
2. Insurers shall present social insurance notices and other documents required for calculating insured income, social insurance contributions, benefits and social insurance record. Data of social insurance notices submitted by the insurer on amounts of insured income attributed to insured persons and social insurance contributions shall not be recorded in the Register of the Republic of Lithuania of persons covered by state social insurance and beneficiaries of state social insurance benefits where the insurer is inactive. The insurer shall be deemed inactive where:
(1) they do not pay social insurance contributions for 3 or more successive months and
(2) they do not apply for deferred payment of debt for social insurance contributions or where no deferred payment of the debt is granted, and
(3) the insurer (members of management bodies of the insurer as a legal entity) cannot be found at the addresses indicated thereby or in the Register of Legal Entities or the insurer fails to produce documentary evidence at the request of the Fund administrations.
3. Should it be established that the insurer is inactive, on the grounds of social insurance notices submitted by the insurer data on amounts of insured income attributed to insured persons and social insurance contributions shall not be recorded in the Register of the Republic of Lithuania of persons covered by state social insurance and beneficiaries of state social insurance benefits as of the start date of such inactivity. These data may be recorded as of the moment where the circumstances leading to the conclusion that the insurer is inactive disappear. Insured persons shall be informed about the non-recording of the amounts of insured income attributable to them and of social insurance contributions in the Register of the Republic of Lithuania of persons covered by state social insurance and beneficiaries of state social insurance benefits. On the grounds of social insurance notices submitted by the inactive insurer, data on the amounts of insured income of the insured person and on social insurance contributions shall be recorded in the Register of the Republic of Lithuania of persons covered by state social insurance and beneficiaries of state social insurance benefits where the insured person proves that amounts on which insured income is calculated are attributed to them for the performance of their work functions. These data may be recorded for the period for which the insured person manages to prove receipt of the amounts on which insured income is calculated for the performance of their work functions. The procedure for establishing the inactivity of an insurer, the procedure for proving receipt by an insured person of the amounts on which insured income is calculated for the performance of their work functions, forms of social insurance notices and other documents and deadlines and the procedure for submitting them, for informing insured persons of the amounts of insured income attributed to them and the non-recording of social insurance contributions and the recording of data in the Register of the Republic of Lithuania of persons covered by state social insurance and beneficiaries of state social insurance benefits shall be established by the Government or an institution authorised thereby.
4. All social insurance benefits shall be calculated on the grounds of the data in the Register of the Republic of Lithuania of persons covered by state social insurance and beneficiaries of state social insurance benefits.
 
Article 14. Social insurance benefits
Social insurance benefits mean payments provided for in the Law on State Social Insurance Pensions, the Law on Sickness and Maternity Social Insurance, the Law on Social Insurance of Accidents at Work and Occupational Diseases and the Law on Unemployment Social Insurance.
 
CHAPTER III
RIGHTS, DUTIES AND RESPONSIBILITIES OF INSURERS, INSURED PERSONS AND BENEFICIARIES OF SOCIAL INSURANCE BENEFITS AND OTHER PAYMENTS WITHIN THE REMIT OF REGIONAL BRANCHES OF THE FUND BOARD
 
Article 15. Right to receive information
1. Insurers, insured persons and beneficiaries of social insurance benefits and other payments within the remit of regional branches of the Fund Board shall be entitled to receive information stored on them in the information system of the Fund Board. At its own initiative and in accordance with the procedure and periodicity established by the Fund Board, the Fund Board shall provide persons with information on their social insurance.
2. Information on insurers, insured persons and beneficiaries of social insurance benefits and other payments within the remit of regional branches of the Fund Board may only be disclosed to other persons subject to written or equivalent consent or request of the insurer, insured person or beneficiary, except for the cases referred to in paragraph 3 of this Article and in other legislation where no consent of the insurer, insured person or beneficiary is required. The procedure for the provision of information shall be established by the Director of the Fund Board.
3. The following insurer data shall be public:
(1) the insurer’s code and its start and end dates;
(2) the number of the insurer’s insured persons;
(3) the insurer’s debt on social insurance contributions, penalties, late-payment fines and interest;
(4) the average income subject to social insurance contributions attributable to insured persons of the insurer whose number of insured persons is more than 3;
(5) the sum of social insurance contributions calculated for the insurer whose number of insured persons is more than 3.
4. When providing information referred to in paragraph 3(3) of this Article, Article 21(3) of the Law of the Republic of Lithuania on Legal Protection of Personal Data shall not apply.
5. The cases where data of the information system of the Fund Board are provided for a fee and the amount of the fee shall be established by the Government or an institution authorised thereby.
 
Article 16. Processing of data on insurers, insured persons and beneficiaries of social insurance benefits and other payments within the remit of regional branches of the Fund Board
Data on insurers, insured persons and beneficiaries of social insurance benefits and other payments within the remit of regional branches of the Fund Board submitted to the Fund administrations shall be processed in accordance with the Law on Legal Protection of Personal Data and other legislation, with the exceptions provided for in this Law.
 
Article 17. Insurers’ duties
1. All insurers shall register with the respective local tax administration (the institution handling the register) in accordance with the procedure laid down in the Law on Tax Administration, except for insurers who are subject to automated insurer registration.
2. Insurers shall accurately and duly calculate and pay social insurance contributions on the basis of rates and within the time frame set in this and other laws.
3. Insurers shall provide the respective local tax administration (the institution handling the register) and the Fund administrations with accurate data on themselves and insured persons in accordance with the procedure laid down in this Law and other legislation.
 
Article 18. Duties of insured persons and beneficiaries of social insurance benefits and other payments within the remit of regional branches of the Fund Board
Insured persons and beneficiaries of social insurance benefits and other payments within the remit of regional branches of the Fund Board shall duly provide the Fund administrations with accurate information required for implementing social insurance and paying benefits, in accordance with the procedure laid down in laws governing social insurance and other legislation.
 
Article 19. Responsibility for undue and incorrect payments of social insurance contributions
1. Social insurance contributions transferred to the Fund with delay shall be subject to late-payment fines. Late-payment fines shall be calculated as of the day following the day on which social insurance contributions are due and up to and inclusive of the day on which social insurance contributions are paid. Late-payment fines may not be calculated for longer than 180 days as of the day on which the right to impose forced recovery of social insurance contributions arises. The amount and the procedure for calculating late-payment fines shall be set by the Minister for Finance of the Republic of Lithuania (‘the Minister for Finance’).
2. Where the inspection reveals that social insurance contributions are unlawfully reduced, the missing amount of social insurance contributions shall be accounted and a fine of 50% of that amount shall be imposed. In this case no late-payment fine provided for in paragraph 1 of this Article shall not be calculated. Where an insurer notices that social insurance contributions calculated are too low but has voluntarily corrected the errors, paid the missing amount of social insurance contributions and submitted updated social insurance notices and notified the insured income of insured persons before the date indicated in the order to inspect the insurer (where there is no order, before the start of the inspection), no penalty shall be imposed for the infringement. In this case late-payment fines shall be calculated in accordance with the procedure laid down in paragraph 1 of this Article.
3. In accordance with the procedure laid down in the Rules for the Drawing Up and Discharge of the Budget of the State Social Insurance Fund, the Fund Board, and in the cases referred to in Article 34(16) its regional branch, may defer the payment of the debt on social insurance contributions to the Fund for up to one year and allow paying the deferred amount on the basis of a debt repayment timetable drawn up by the insurer and the Fund administration which may not exceed 4 years. Should the repayment schedule be breached, forced recovery of the debt on social insurance contributions shall be launched.
4. In accordance with the procedure laid down in the Rules for the Drawing Up and Discharge of the Budget of the State Social Insurance Fund, the Fund Board, and in the cases referred to in Article 34(16) its regional branch, may defer the recovery of the late-payment fine imposed on insurers for the late payment of social insurance contributions for up to one year and allow paying the deferred amount on the basis of a debt repayment timetable drawn up by the insurer and the Fund administration which may not exceed 4 years. Should the repayment schedule be breached, forced recovery of the late-payment fine shall be launched.
5. In accordance with the procedure laid down in the Rules for the Drawing Up and Discharge of the Budget of the State Social Insurance Fund, the Fund administrations may grant an exemption to the insurer from:
(1) the payment of the late-payment fine calculated where the insurer proves that too small amounts of social insurance contributions were calculated or social insurance contributions due could not be paid in due time because of circumstances which were out of their control and which they did not and could not foresee;
(2) the payment of the penalties imposed where the insurer proves that too small amounts of social insurance contributions were calculated because of circumstances which were out of their control and which they did not and could not foresee.
6. The Fund administrations may defer the recovery of penalties for up to one year drawing up a penalty payment timetable in accordance with the procedure laid down in the Rules for the Drawing Up and Discharge of the Budget of the State Social Insurance Fund which may not exceed 4 years. Should the repayment schedule be breached, forced recovery of the penalty shall be launched.
7. The limitation period for forced recovery of social insurance contributions not paid to the Fund by insurers and insured persons and late-payment fines, interest and penalties due shall be 5 years. Overdue contributions, late-payment fines and penalties shall be subject to interest applicable throughout the debt repayment deferral period, the amount of which shall be set by the Minister for Finance in accordance with the procedure laid down in the Law on Tax Administration. The debt overdue in accordance with the debt recovery timetable agreed upon between the insurer and the Fund administration shall be subject to the increased interest rate. The increased interest rate shall apply until the day on which respective amounts are paid (credited). The amount of increased interest shall equal the amount of late-payment fine for overdue contributions.
8. The right to impose forced recovery of contributions, late-payment fines, interest and penalties shall emerge as of the day on which social insurance contributions, late-payment fines, interest and penalties are due. The limitation period for forced recovery shall be calculated as of the day on which the right to impose forced recovery of overdue contributions, late-payment fines, interest and penalties emerges. The limitation period for forced recovery shall apply to all debts on social insurance contributions, irrespective of the moment when they are generated (including any debts on social insurance contributions that are generated before the entry into force of this Law).
9. The expiry of the limitation period for forced recovery of social insurance contributions shall coincide with the expiry of the limitation period for forced recovery of related late-payment fines, interest and/or penalties due.
10. After the launch of forced recovery procedures for overdue social insurance contributions, late-payment fines, interest and penalties by means referred to in Article 20, the implementation of those procedures may continue even if the limitation period for forced recovery expires in the course of the procedures. In the case of a decision to defer the payment of the debt on social insurance contributions, the recovery of late-payment fines or the payment of penalties, the limitation period for forced recovery shall be interrupted. In that case the limitation period for forced recovery that has been interrupted shall be renewed as of the moment when an agreement or a decision whereby the payment or recovery of the respective amount are deferred are terminated or annulled. Upon expiry of the limitation period for forced recovery of debts on social insurance contributions, the Fund administrations may not take action to recover those contributions and related late-payment fines, penalties or interest due.
11. Data on insured income and social insurance contributions may be updated for a period of no more than 5 years as of the insurer’s request. At the request of an insured person, data about insured income and social insurance contributions, after the insurer pays social insurance contributions due for the insured person, shall be updated without applying the 5-year limit. Moreover, this period shall not apply where funds for pension rights acquired by a person from the pension scheme of European Union institutions are transferred to the Fund in accordance with the Law of the Republic of Lithuania on the Preservation and Transfer of Pension Rights of the Staff of European Union Institutions and Members of the European Parliament and where data are updated as a result of the application of European Union regulations harmonising social security systems or provisions of international treaties governing the personal right to social insurance.
12. Before submitting the updated data on higher income of insured persons for the previous period, insurers shall pay the missing amount of social insurance contributions and late-payment fines to the Fund on the basis of effective rates. Where insured income of insured persons for the previous period becomes lower because of the updated data produced by the insurer and social insurance benefits have already been calculated and paid out to insured persons on the basis of insured income now to be reduced, such overpaid social insurance benefits shall be reduced by the amount of overpaid social insurance contributions. The remaining amount of overpaid social insurance contributions shall be accounted as the amount of social insurance contributions for future periods or returned to the insurer at their request.
13. Social insurance contributions, penalties and late-payment fines accounted in the course of an inspection shall be paid by the deadline set in the Law on Tax Administration.
14. Where insurers are late to pay social insurance contributions additionally calculated as indicated in the inspection report, late-payment fines shall be calculated as of the day following the day on which a decision of the State Tax Inspectorate approving the inspection report enters into force.
 
Article 20. Forced recovery measures for social insurance contributions, late-payment fines, interest and penalties
1. Regional branches of the Fund Board may impose forced recovery of overdue social insurance contributions, late-payment fines, interest and penalties through the following measures:
(1) by ordering a credit, payment and/or e-money institution to debit unpaid social insurance contributions, late-payment fines, interest and penalties from the account of the insurer or the insurer’s debtor having missed the deadline for debt repayment to the insurer, and where documents and other evidence collected during an inspection show that the insurer’s cash assets are held by other insurers, from accounts of such insurers in a credit, payment and/or e-money institution in accordance with the procedure laid down in Article 754 of the Code of Civil Procedure of the Republic of Lithuania;
(2) by ordering the debtor’s employer or the payer of pensions, scholarships, allowances or other payments to the payer to recover unpaid social insurance contributions, late-payment fines, interest and penalties to the Fund;
(3) by ordering a credit, payment and/or e-money institution to debit overdue social insurance contributions, late-payment fines, interest and penalties from deposits of the insurer or the insurer’s debtor having missed the deadline for debt repayment to the insurer, and where documents and other evidence collected during an inspection show that the insurer’s cash assets are held by other insurers, from deposits of such insurers in a credit, payment and/or e-money institution and any interest due;
(4) by initiating bankruptcy proceedings.
2. Where amounts are recovered as provided for in subparagraphs (1) and (3) of paragraph (1), insurers shall cover the administrative costs of those procedures.
3. With a view to ensuring debt recovery, regional branches of the Fund Board may:
(1) order credit, payment and/or e-money institutions of the Republic of Lithuania to interrupt cash dispensation and transfers from accounts of insurers or insurers’ debtors having missed the deadline for debt repayment to the insurer, and where documents and other evidence collected during an inspection show that the insurer’s cash or other assets are held by other insurers, from accounts of such insurers where the insurers are indebted and fail to pay social insurance contributions for longer than 3 months;
(2) file an application to register forced mortgage or pledging of assets of an insurer or an insurer’s debtor having missed the deadline for debt repayment to the insurer, and where documents and other evidence collected during an inspection show that the insurer’s cash assets are held by another insurer, of that other insurer’s assets in accordance with the procedure laid down in the Code of Civil Procedure;
(3) arrest assets of an insurer or an insurer’s debtor having missed the deadline for debt repayment to the insurer, and where documents and other evidence collected during an inspection show that the insurer’s cash assets are held by another insurer, that other insurer’s assets where any social insurance contributions, penalties, interest and/or late-payment fines are not paid to the Fund.
4. Regional branches of the Fund Board may delegate the recovery of contributions, late-payment fines, interest and penalties to bailiffs.
5. Where it is impossible to recover unpaid social insurance contributions, late-payment fines, interest and penalties from an individual enterprise, a general partnership or a limited partnership, unpaid social insurance contributions, late-payment fines, interest and penalties may be recovered from assets of the owner of an individual enterprise and full members or members of a general partnership or a limited partnership and those assets may be used to secure the debt recovery.
6. Where an insurer’s debtor or other insurers holding an insurer’s cash assets are subject to the debt recovery and recovery security measures provided for in paragraphs (1) and (3) of this Article, the amounts (the share of assets) in respect of which relevant action is taken may not exceed the amount of the debt of the insurer’s debt to the insurer or the amount of the insurer’s cash assets held by another insurer (the value of the assets (a share thereof) of another insurer). The debt recovery from an insurer’s debtor as provided for in paragraphs (1) and (3) of this Article shall be carried out applying mutatis mutandis the provisions of Article 688 of the Code of Civil Procedure.
 
Article 21. Responsibility for damage caused to the Fund
1. Legal and natural persons for whose fault the Fund administrations have unlawfully paid out certain benefits to insured persons or whose unlawful (default) actions have caused other material damage to the Fund shall reimburse the Fund for that damage in accordance with the statutory procedure.
2. Where social insurance benefits or other payments within the remit of regional branches of the Fund Board are unlawfully paid through the fault of respective beneficiaries, by a decision of the Director or the Deputy Director of a regional branch of the Fund Board the resulting overpayment shall be recovered from any social insurance benefit received by the beneficiary when paid to that person from the Fund and/or any other payment within the remit of regional branches of the Fund Board. The monthly amount recovered may not exceed 50% of the amount of social insurance benefits and other payments within the remit of regional branches of the Fund Board due to the beneficiary. Where a person receives no social insurance benefits and other payments within the remit of regional branches of the Fund Board, the overpayment shall be recovered through a judicial procedure.
3. Where data updated by an insurer in respect of a person’s insured income for the previous period result in overpayment of social insurance benefits, the overpaid amount may also be recovered from the insurer as described in Article 20.
 
CHAPTER IV
SOCIAL INSURANCE FINANCES AND ASSETS
 
Article 22. Fund’s finances and assets on the Fund’s accounting books
1. The Fund’s finances is the independent budget of the State Social Insurance Fund of the Republic of Lithuania which is not part to the State, municipal and other budgets. The Fund also has the Social Insurance Reserve.
2. The accounting books of the Fund shall include tangible, intangible and financial assets acquired with the Fund’s resources or received without consideration from other entities. These assets are property of the State. The management, use and disposal thereof shall be entrusted to the Fund administrations in accordance with the procedure laid down in the Law of the Republic of Lithuania on the Management, Use and Disposal of the State and Municipal Assets. Funds received from leasing the Fund’s assets as well as funds gained by selling the Fund’s assets, after deducting statutory costs of (remuneration for) safe-keeping and selling assets, shall be transferred to the Fund’s budget.
3. The composition of the consolidated financial statements of the Fund and the requirements for drawing them up shall be laid down in the Law of the Republic of Lithuania on Public Sector Accounts. The drawing up and discharge of the Fund’s budget and the composition of the Fund’s consolidated budget discharge reports and the procedure for drawing them up shall be governed by the Constitutional Law of the Republic of Lithuania on the Implementation of the Fiscal Contract, the Law of the Republic of Lithuania on the Composition of the Budget of the State Social Insurance Fund and the Rules for the Drawing Up and Discharge of the Budget of the State Social Insurance Fund.
4. The Fund’s accounts may not be subjected to:
(1) any recovery, except for the cases where in accordance with the statutory procedure and time frame the Fund fails to implement or unduly implements its commitments under arbitration or court rulings ordering the Fund to compensate material and non-material damages;
(2) the application of any interim measures.
 
Article 23. Relationship between the Fund budget and the State budget
1. The general part of social insurance pensions shall be financed by the State budget. During the transitional period, until the financing of the general part is fully transferred to the State budget, the general part of social insurance pensions (until 31 December 2017 – the main part of social insurance pensions) shall also be financed by the Fund budget. In 2017 the rate of social insurance contributions for funding the main part of the pension shall be reduced by 1%point, in 2018 and in the following year the amount of the State budget appropriations for funding the general part of social insurance pensions shall be set only having assessed the impact on the financial sustainability of the public sector ensured in accordance with the fiscal discipline rules regulated by national and European Union legislation.
2. The amount of social insurance contributions for pensions shall be calculated taking into account the State budget appropriations allocated for the funding of the general part of social insurance pensions.
3. The amount of the State budget appropriations to the Fund budget including appropriations for funding the general part of social insurance pensions shall be established by the Law of the Republic of Lithuania on the Approval of Financial Indicators of the State and Municipal Budgets for the respective year and the Law on the Approval of Indicators of the Budget of the State Social Insurance Fund for the respective year.
4. Appropriations from the State budget may be allocated where the adoption of legislation by the Seimas or the Government leads to an increase in expenditure relating to a certain kind of social insurance or a reduction of income while the rates of social insurance contributions for that kind of social insurance remain unchanged or change insignificantly.
5. Appropriations from the State budget or other cash resources of the State may be allocated for expenditure relating to reforms of the pension system, compensating for the amount of social insurance contributions transferred to pension funds managed by pension accumulation companies.
 
Article 24.      Relations of the Fund administrations with credit, payment and/or e-money institutions and other institutions, undertakings and organisations
1. Credit, payment and/or e-money institutions and other institutions, undertakings or organisations active in the Republic of Lithuania shall perform turnover transactions with the Fund’s funds free of charge.
2. A credit, payment and/or e-money institution shall perform an order of the Fund administration to debit overdue social insurance contributions, late-payment fines, interest and penalties from a person’s account opened with that credit, payment and/or e-money institution within the time frame for the performance of a payment order set in the Law of the Republic of Lithuania on Payments. A credit, payment and/or e-money institution shall perform an order of the Fund administration to debit overdue social insurance contributions, late-payment fines, interest and penalties from a person’s deposit with that credit, payment and/or e-money institution together with interest due at the first request of the depositor or at maturity of the deposit. An order of the Fund administration to debit unpaid social insurance contributions, late-payment finds, interest and penalties from a person’s account opened with that credit, payment and/or e-money institution shall also be accepted and performed where there is no money in the account of the insurer or the insurer’s debtor or the balance is smaller than the amount to be debited. In that case the debiting shall be performed in instalments until the total amount indicated is debited from the account of the insurer or the insurer’s debtor. An order of the Fund administration to debit overdue social insurance contributions, late-payment finds, interest and penalties from a person’s deposit with that credit, payment and/or e-money institution with any interest due shall also be accepted and performed where the deposit amount of the insurer or the insurer’s debtor is smaller than the amount to be debited. In that case the order to debit overdue social insurance contributions, late-payment fines, interest and penalties shall be performed to the extent of the amount of that person’s deposit with any interest due. The Fund administrations shall reduce the amount to be debited as indicated in an order already submitted to a credit, payment and/or e-money institution where overdue social insurance contributions, uncontested late-payment fines, uncontested interest and uncontested penalties are partially covered by other means. In that case the Fund administrations shall immediately notify the reduction of the claim to the credit, payment and/or e-money institution which then performs the order after having adjusted the amounts.
3. Orders of the Fund administration to compulsorily debit unpaid social insurance contributions, late-payment fines, interest and penalties from the account of the insurer or the insurer’s debtor shall be performed in accordance with the procedure laid down in the Code of Civil Procedure.
4. Where the Fund administration issuing an order to a credit, payment and/or e-money institution to restrict a person’s right to dispose of funds in an account opened with that credit, payment and/or e-money institution issues directions that the person may perform certain transactions with the funds in their account, the specific amount of money which may be used for payments during one calendar month shall be indicated.
5. In the event of a beneficiary’s death, social insurance benefits or other payments within the remit of regional branches of the Fund Board unduly credited to the deceased person’s account may be recovered by an order of the Director of a regional branch of the Fund Board to debit the overpaid amounts of social insurance benefits or other payments within the remit of regional branches of the Fund Board from the funds in the deceased person’s account with a credit, payment and/or e-money institution. Where the amount of funds in the deceased person’s account with a credit, payment and/or e-money institution is smaller than the amount of social insurance benefits or other payments within the remit of regional branches of the Fund Board unduly transferred to the deceased person’s account with the credit, payment and/or e-money institution, the remaining non-repaid part of the amount shall be recovered in accordance with the statutory procedure.
 
Article 25. Relationship of the Fund Board with funds
1. In accordance with the procedure laid down in the Law on Health Insurance, the Fund Board shall transfer compulsory health insurance contributions set in the Law on Health Insurance and received as well as insurance contributions additionally recovered as part of compulsory health insurance to the account of the budget of the Compulsory Health Insurance Fund of the National Health Insurance Fund under the Ministry of Health (‘the National Health Insurance Fund’). The Fund Board may make settlements with the budget of the Compulsory Health Insurance Fund by off-setting compulsory health insurance contributions set by the Law on Health Insurance with social insurance contributions of healthcare established financed from the budget of the Compulsory Health Insurance Fund.
2. The Fund Board shall transfer cumulative pension contributions to pension funds managed by pension accumulation companies within the time frame and in accordance with the procedure laid down in the Law on the Accumulation of Pensions.
3. The Fund Board shall transfer the funds of unemployment social insurance for the implementation of active labour market policy measures established by the Law on Employment within the time frame and in accordance with the procedure laid down by the Government or an institution authorised thereby to the Ministry of Social Security and Labour of the Republic of Lithuania (‘the Ministry of Social Security and Labour’) to establish the Employment Fund. The amount of social insurance funds for unemployment for the implementation of active labour market policy measures under the Law on Employment shall be established by the Law on the Approval of Indicators of the Budget of the State Social Insurance Fund for the respective year.
4. Pension accumulation companies, the Compulsory Health Insurance Fund, and the Employment Fund shall pay for the collection of contributions and their transfer to the funds to the Fund Board compensating the Fund’s operating costs. The procedure for calculating and paying those compensations shall be established by the Director of the Fund Board.
 
Article 26. Late-payment fines paid by the Fund Board
The Fund Board shall pay late-payment fines for overdue funds transfers to insurers for payments of social insurance benefits for sickness and for maternity or cumulative pension contributions to pensions accumulation companies overdue for its own fault. The amount of late-payment fines shall be established in accordance with the rate set by the Minister for Finance applicable to overdue payments. Late-payment fines shall be calculated as of the day of the deadline for transferring cumulative pension contributions to pension accumulation companies as set out in the Law on the Accumulation of Pensions and shall continue to be calculated until the amount of cumulative pension contributions unpaid to pension accumulation companies is fully transferred.
 
CHAPTER V
MANAGEMENT SYSTEM FOR SOCIAL INSURANCE
 
Article 27. Management system and participants of social insurance and management structure of the Fund
1. The management system for social insurance shall comprise:
(1) the Ministry of Social Security and Labour;
(2) the Fund Council;
(3) the Fund Board;
(4) regional branches of the Fund Board.
2. Participants of the social insurance scheme shall also include:
(1) insurers and insured persons;
(2) the fund of Social Insurance Reserve;
(3) the State Tax Inspectorate;
(4) the Lithuanian Labour Exchange under the Ministry of Social Security and Labour (‘the Lithuanian Labour Exchange’);
(5) the National Health Insurance Fund;
(6) pension accumulation companies.
3. The management structure of the Fund shall include the Fund Board and regional branches of the Fund Board.
 
Article 28. Functions of the Ministry of Social Security and Labour within the management system for social insurance
In performing management functions for social insurance and developing a national policy in this area, the Ministry of Social Security and Labour shall:
(1) coordinate the development of social insurance and its strategies;
(2) analyse whether social insurance guarantees meet the interests of the State and of insured persons and beneficiaries;
(3) set prospective and immediate social insurance objectives;
(4) control the activities of the Fund Board and organise inspections of these activities;
(5) within its remit shall approve the regulations of the Fund Board;
(6) submit the draft budget of the Fund, annual consolidated accounts of the Funds and conclusions and suggestions on ongoing reformations of the social insurance scheme to the Government.
 
Article 29. Fund Council
1. The Fund Council is a collegial body established on the grounds of equal tripartite cooperation that examines and adopts decisions on the implementation of the social insurance policy.
2. The Fund Council shall consist of 15 members.
3. The Fund Council shall be formed from an equal number of equal members representing organisations protecting the rights of insured persons, employer organisations and public authorities.
4. Representatives of insured persons and employers shall be delegated by organisations represented in accordance with their agreement while representatives of public authorities shall be appointed by the Government. The composition of the Fund Council shall be approved by the Government at the proposal of the Minister for Social Security and Labour of the Republic of Lithuania (‘the Minister for Social Security and Labour’).
5. Activities of the Fund Council shall be managed by its President on a rotating basis. The members of the Fund Council shall elect him or her for a period of 6 months.
6. Decisions of the Fund Council shall be made by the majority of votes of its members. Where the votes are divided equally, the vote of the President of the Fund Council shall be decisive.
7. The Fund Council shall act on the grounds of approved regulations.
8. Technical assistance for the work of the Fund Council shall be provided by the Fund Board.
9. The Fund Council may have public advisers. Their number shall be established in the regulations of the Fund Council. When drawing up conclusions, the Fund Council may use the help of experts in a specific field and consult them on matters that require specialised knowledge or that need to be assessed. Minimum requirements for expert qualifications, special requirements for the procurement of expert services as well as payment conditions, eligibility criteria for expenditure, controls and other requirements shall be established and public procurement procedures, in accordance with the procedure laid down in the Law of the Republic of Lithuania on Public Procurement, shall be organised and performed by the Fund Board, subject to agreement with the Fund Council.
10. Decisions, suggestions and conclusions of the Fund Council shall be published and notified to the Seimas and institutions participating in the management system for social insurance in accordance with the procedure laid down in the regulations of the Fund Council.
 
Article 30. Competence of the Fund Council
The Fund Council shall:
(1) examine and submit proposals and conclusions to the Ministry of Social Security and Labour on how legislation governing social insurance is implemented and how activities of the Fund Board are performed;
(2) submit proposals and conclusions to the Ministry of Social Security and Labour in respect of draft laws governing social insurance and at the request of the Seimas present conclusions to the Seimas in respect of draft laws governing social insurance registered at the Seimas;
(3) submit proposals to the Ministry of Social Security and Labour in respect of the rates of social insurance contributions, the State budget appropriations and the establishing and use of the fund of Social Insurance Reserve;
(4) examine and submit proposals to the Fund Board in respect of insurers’ requests to defer or waive the payment of debts on social insurance contributions, late-payment fines or penalties exceeding EUR 30 000;
(5) examine and submit a conclusion on the draft budget of the Fund to the Fund Board, the Ministry of Social Security and Labour and the Seimas;
(6) examine annual consolidated accounts of the Fund together with the report of the National Audit Office of the Republic of Lithuania (if any) and submit its conclusion to the Fund Board and the Ministry of Social Security and Labour in respect of the annual consolidated accounts of the Fund. The conclusion shall be recorded as a resolution of the Fund Council;
(7) submit conclusions to the Seimas in respect of the guidelines for reforming the state social insurance and pension scheme approved by the Seimas and proposals what additional measures are needed to ensure the financial stability of the social insurance scheme and the adequacy of benefits;
(8) at least once every 4 years submit to the Seimas a conclusion and forecasts on the course and expected results of the long-term reform of the social insurance and pension scheme;
(9) approve and publish indicators established in the Law on State Social Insurance Pensions;
(10) in accordance with the Law on Social Insurance  of Accidents at Work and Occupational Diseases, approve the attribution of insurers to a specific group of contribution rates;
(11) examine and deal with other matters relating to social insurance and affecting its organisation and performance.
 
Article 31. Fund Board
1. The Fund Board is a public administration organising social insurance and carrying out fast processing and accounting of the Fund’s funds ensuring the collection and recovery of social insurance contributions, penalties and late-payment fines due, the proper processing of data on insured persons and the allocation and payment to beneficiaries of social insurance benefits and other payments within the remit of regional branches of the Fund Board as provided for in laws as well as performing the functions of the state provider of information technology services. The Fund Board shall ensure the lawfulness, cost-effectiveness, efficiency and high performance of the use of the Fund’s funds. The Fund Board is a State-budget institution with its own seal with its name and the coat of arms of the Lithuanian State, a stamp with its name and symbols approved in accordance with the statutory procedure and special accounts with credit institutions registered in the Republic of Lithuania and draws up the Fund’s consolidated accounts.
2. The Fund Board shall be founded by the Government and supported with the Fund’s funds and act in accordance with this Law and the regulations of the Board of the State Social Insurance Fund approved by the Minister for Social Security and Labour. The Fund Board may receive payments from other sources for the performance of other functions delegated to it by the State.
3. The Fund shall be administered by the Fund Board managed by the Director. The Director shall be appointed on a competitive basis and dismissed by the Minister for Social Security and Labour in accordance with the procedure laid down in the Law on Civil Service. The Director of the Fund Board shall report directly to the Minister for Social Security and Labour.
 
Article 32. Functions and rights of the Fund Board
1. When organising social insurance and discharging the Fund’s budget, the Fund Board shall:
(1) draw up and, subject to coordination with relevant public authorities, submit to the Ministry of Social Security and Labour a draft budget and consolidated accounts of the Fund along with the conclusion of the Fund Council;
(2) within its remit administer social insurance contributions, ensure the accurate accounting and allocation of social insurance benefits and other payments within the remit of regional branches of the Fund Board set in legislation regulating social insurance and organise the due payment of social insurance benefits and other payments within the remit of regional branches of the Fund Board;
(3) conclude contracts with legal or natural persons in respect of the performance of social insurance functions;
(4) coordinate and ensure the efficient and quality work of regional branches of the Fund Board and control them;
(5) in accordance with the procedure laid down by the Government, organise social insurance of persons referred to in Article 7(1);
(6) report to the Minister for Social Security and Labour and the Fund Council in respect of the Fund’s activities and provide information on the Fund’s budget discharge;
(7) manage the information system of the Fund Board;
(8) process data of insured persons participating in pension accumulation in accordance with the Law on the Accumulation of Pensions and of pension accumulation contracts;
(9) organise the transfer of cumulative pension contributions to pension funds managed by pension accumulation companies selected by insured persons, the transfer of compulsory health insurance contributions to the account of the budget of the Compulsory Health Insurance Fund and the transfer of social insurance funds for unemployment to the Ministry of Social Security and Labour for establishing the Employment Fund;
(10) set and approve the number of posts of civil servants and staff of the Fund administrations;
(11) approve the procedure for the use of the Fund’s funds;
(12) organise training for civil servants and staff of the Fund administrations;
(13) ensure the proper and due allocation and/or payment of benefits from the State budget as provided for in laws and other legislation;
(14) examine complaints of insured persons, insurers, beneficiaries of social insurance benefits, healthcare establishments and other parties concerned in respect of actions and decisions of civil servants and staff of the Fund administrations;
(15) organise and carry out inspections of the reasonableness, lawfulness and fairness of established temporary incapacity for work and long-term and permanent lost capacity for work (disability) and provide methodological and practical assistance on those matters to regional branches of the Fund Board;
(16) submit proposals to the Ministry of Social Security and Labour on the improvement of social insurance legislation;
(17) give directions to regional branches of the Fund Board in respect of the application of legislation governing the allocation and payment of benefits;
(18) provide the State Tax Inspectorate with information required to ensure control of the accounting of social insurance contributions;
(19) in the cases referred to in European Union legislation and other international treaties of the Republic of Lithuania on social security, act as a competent authority and ensure the implementation of those treaties;
(20) examine, interpret and solve matters relating to the application of legislation governing social insurance;
(21) through legal, technical and organisational measures, ensure the automated registration of insurers;
(22) inform the public on matters of social insurance;
(23) perform other functions established by laws and other legislation.
2. The Fund Board may:
(1) in accordance with the procedure laid down in laws and other legislation, on the grounds of a trust, manage, use and dispose of assets put on the Fund’s accounting books;
(2) in accordance with the statutory procedure, purchase securities and manage and dispose of them;
(3) in accordance with the statutory procedure, conclude contracts with economic operators of the Republic of Lithuania and other countries;
(4) represent the Fund administrations in international organisations;
(5) in accordance with the statutory procedure, approve the regulations of undertakings or institutions relating to the performance of state social insurance functions or assisting in performing them;
(6) subject to consent of the Fund Council, waive or, in accordance with the procedure laid down by the Fund Board, transfer all or some of financial claims of creditors;
(7) subject to coordination with the Fund Council, implement measures to gain additional revenue;
(8) defer the payment of debt on social insurance contributions exceeding EUR 30 000 for up to one year, the recovery of late-payment fines calculated on overdue social insurance contributions exceeding EUR 30 000 for up to one year and the recovery of penalties imposed exceeding EUR 30 000 for up to one year and waive the payment of late-payment fines and penalties exceeding EUR 30 000;
(9) recognising debts on social insurance contributions, late-payment fines, penalties and interest as bad debts where they are impossible to recover for objective reasons or their recovery is not socially and/or economically feasible where no assets of the payer of social insurance contributions are discovered or the assets discovered are not liquid (hardly liquid); forced recovery costs exceed the debt on social insurance contributions, late-payment fines, penalties and interest; it is not feasible to enforce recovery of unpaid amounts as the economic (social) situation of a natural person is difficult where that natural person requires state support (the person is of retirement age or disabled (before 1 July 2005 – invalids), treatment, medical preventive measures and/or rehabilitation, the person is unemployed or receives social benefits) or such support is already provided to them;
(10) in accordance with the procedure laid down by the Government or an institution authorised thereby, appeal against the fairness of establishing the level of capacity for work ( lost capacity for work), its cause, the moment of emergence and the period;
(11) in performing its functions, obtain required information and data in accordance with the statutory procedure;
(12) subject to mutual agreement, transfer the right to claim debts on social insurance contributions, late-payment fines, penalties and interest of an undertaking subject to bankruptcy or restructuring proceedings to a centralised state assets manager;
(13) in accordance with the procedure laid down by the Director of the Fund Board and coordinated with the Ministry of Finance of the Republic of Lithuania, borrow from credit institutions;
(14) identify cases where documents are served on insurers, insured persons and beneficiaries of social insurance benefits and other payments within the remit of regional branches of the Fund Board only through telecommunications terminal equipment or by publishing.
3. The Fund Board shall perform the statutory functions of the state provider of information technology services.
 
Article 33. Regional branches of the Fund Board
1. Regional branches of the Fund Board are regional institutions of the Fund Board whose key task is immediate administration of the Fund’s funds ensuring the timely collection and recovery of social insurance contributions and the proper allocation and payment of social insurance benefits and other payments within the remit of regional branches of the Fund Board to beneficiaries. Regional branches of the Fund Board shall report and be accountable to the Fund Board. Each regional branch of the Fund Board shall be managed by the Director. The Director shall be appointed and dismissed by the Director of the Fund Board in accordance with the procedure laid down in the Law on Civil Service.
2. Regional branches of the Fund Board shall be financed from the Fund’s funds and function in accordance with this Law and the regulations of regional branches of the Fund Board approved by the Director of the Fund Board.
3. Regional branches of the Fund Board shall be founded for performing social insurance functions, taking into account customer flows and needs. Activities of regional branches of the Fund Board shall be governed by their regulations.
4. Regional branches of the Fund Board are State-budget institutions with their own seal with their name and the coat of arms of the Lithuanian State, a stamp with its name and symbols approved in accordance with the statutory procedure and special accounts with credit institutions registered in the Republic of Lithuania and draw up consolidated financial and budget discharge accounts of the respective regional branch of the Fund Board.
 
Article 34. Functions of regional branches of the Fund Board
Regional branches of the Fund Board shall:
(1) control the payment of calculated social insurance contributions, late-payment fines, interest and penalties and carry out forced recovery of overdue social insurance contributions, late-payment fines, interest and penalties;
(2) accept applications for and grant pensions, allowances or other benefits;
(3) process data of insured persons in the Register of the Republic of Lithuania of persons covered by state social insurance and beneficiaries of state social insurance benefits and control grounds for amending these data, assigns personal social insurance numbers to insured persons and register insurers on the grounds provided for in this Law and the Rules for the Drawing Up and Discharge of the Budget of the State Social Insurance Fund;
(4) analyse social insurance indicators and implement measures to improve those indicators and submit relevant proposals to the Fund Board;
(5) in accordance with the procedure laid down by the Director of the Fund Board, carry out the accounting of social insurance funds;
(6) calculate late-payment fines and interest;
(7) in accordance with the statutory procedure, recover overpaid amounts of pensions, allowances and other payments;
(8) draw up and maintain files on beneficiaries of pensions, allowances and other payments and issue certificates of the set form to them;
(9) pay and carry out the accounting of pensions, allowances and other payments;
(10) examine applications and complaints relating to social insurance matters and in exceptional cases help applicants to obtain documents required for granting a pension or allowance;
(11) in accordance with the statutory procedure, allocate and pay benefits from the State budget funds;
(12) subject to agreement with municipal authorities, make social payments from municipal budgets;
(13) control the lawfulness and reasonableness of the issuance and renewal of incapacity certificates, professional rehabilitation certificates and pregnancy and childbirth leave certificates (the lawfulness and reasonableness of establishing temporary incapacity for work);
(14) in accordance with the procedure laid down by the Government or an institution authorised thereby, check and appeal against the reasonableness and fairness of establishing the level of capacity for work (lost capacity for work), its cause, the moment of emergence and the period;
(15) in accordance with the procedure laid down by the Director of the Fund Board, collect data on social insurance and equivalent record of persons who have not reached the old-age retirement age and their insured and equivalent income;
(16) defer the recovery of penalties (except for penalties imposed in accordance with the Code of Administrative Infringements of the Republic of Lithuania) not exceeding EUR 30 000 for up to one year, the payment of debts on social insurance contributions not exceeding EUR 30 000 for up to one year and the recovery of late-payment fines calculated on overdue social insurance contributions not exceeding EUR 30 000 for up to one year and waive the payment of late-payment fines and penalties not exceeding EUR 30 000;
(17) in accordance with the statutory procedure, provide data on insurers, insured persons or beneficiaries of social insurance benefits or other payments within the remit of regional branches of the Fund Board;
(18) conclude contracts with persons referred to in Article 7(1) and process social insurance data of those persons;
(19) ensure and account for social insurance of persons covered at the cost of the State;
(20) subject to consent of the Fund Board, take over financial claims of insurers;
(21) in accordance with the procedure laid down in laws and other legislation, on the grounds of a trust, manage, use and dispose of assets put on the Fund’s books;
(22) perform other functions established by laws and other legislation.
 
Article 35. Fund of Social Insurance Reserve
1. The fund of Social Insurance Reserve shall necessarily be established every budgetary year by transferring a share of revenue of a certain kind of social insurance exceeding the amount of expenditure of the respective kind of social insurance. The fund of Social Insurance Reserve shall consist of a reserve part for pensions and a reserve part for other social insurance benefits.
2. Activities of the fund of Social Insurance Reserve shall be governed by the Regulations for the establishment and management of the fund of State Social Insurance Reserve approved by the Government providing for sources for establishing the fund of Social Insurance Reserve, its size, the procedure for its use, actuarial justification and audit and the incorporation, structure (the board and an investment committee), activities and responsibilities of management bodies.
3. The fund of Social Insurance Reserve shall be managed by the Fund Board.
4. The funds of the Social Insurance Reserve’s Fund shall only be used on the grounds of a decision of the Government, after assessing the economic situation where the Fund revenue for a certain kind of social insurance is not adequate for funding relevant benefits provided for in laws governing social insurance benefits.
 
Article 36. Functions of the State Tax Inspectorate within the social insurance system
On the grounds and in accordance with the procedure laid down in this Law and the Law on Tax Administration, the State Tax Inspectorate shall perform the following functions relating to the control of accounting of social insurance contributions and dispute settlement:
(1) register insurers, except for insurers subject to automated insurer registration and provide them with information about payment duties pertaining to social insurance contributions;
(2) check the accounting of social insurance contributions of insurers and insured persons and the payment thereof to the extent related to insurers under inspection and impose penalties for infringements revealed by inspections;
(3) document and approve inspection findings;
(4) examine tax disputes concerning the new amounts of social insurance contributions recalculated and fines imposed during inspections;
(5) represent the Fund’s interests at undertakings and public institutions subject to bankruptcy or restructuring proceedings in accordance with the creditor rights granted in accordance with the Law of the Republic of Lithuania on Bankruptcy of Undertakings and the Law of the Republic of Lithuania on Restructuring of Undertakings on the grounds of a mutual agreement between the State Tax Inspectorate and the Fund Board;
(6) provide the Fund administrations with information required for the performance of social insurance. The procedure for the control of and information provision on social insurance contributions shall be laid down by the State Tax Inspectorate, subject to coordination with the Fund Board.
 
Article 37. Functions of the Lithuanian Labour Exchange within the social insurance system
The Lithuanian Labour Exchange shall provide the Fund Board with data required for establishing or preserving the right to an insurance benefit in the case of unemployment and for suspending, renewing or discontinuing payments of insurance benefits for unemployment.
 
Article 38. Functions of the National Health Insurance Fund within the social insurance system
The National Health Insurance Fund shall:
(1) in accordance with the statutory procedure, dispose of funds received from the Fund;
(2) in accordance with the statutory procedure, discharge the budget of the Compulsory Health Insurance Fund.
 
Article 39. Functions of pension accumulation companies
Pension accumulation companies shall:
(1) in accordance with the statutory procedure, conclude a data provision contract with the Fund Board;
(2) in accordance with the statutory procedure, conclude pension accumulation contracts with persons wishing and entitled to become participants of the pension accumulation scheme and notify any pension accumulation contracts concluded and terminated to the Fund administrations;
(3) at least once every calendar year inform each participant of the pension accumulation scheme about the amount of pension assets accumulated in their personal account.
 
CHAPTER VI
RIGHTS OF THE FUND ADMINISTRATIONS AND APPEALS AGAINST DECISIONS AND ACTIONS
 
Article 40. Rights of the Fund administrations
1. The Fund administrations may check documents justifying social insurance contributions and social insurance benefits administered by them as well as payments within the remit of regional branches of the Fund Board.
2. When performing the functions vested in them by this Law, civil servants of the Fund administrations may:
(1) receive free information, clarifications and copies of documents relating to social insurance which are required for the performance of their duties from undertakings, institutions and organisations and other persons including credit, payment and/or e-money institutions,;
(2) without prior notice, with their service card, access an insurer’s premises (including leased ones) or territory associated with their activities. Access to an insurer’s premises or territory (including leased ones) without prior notice shall only be possible during the insurer’s working hours. In other cases, the insurer’s consent must be obtained;
(3) on a provisional basis, for up to 30 calendar days, take documents from the insurer showing employment revenue on which social insurance contributions are calculated and social insurance benefits from the Fund’s funds against leaving a certificate on the taking of those documents (in that case the insurer shall be allowed to make copies of the documents taken);
(4) on a provisional basis, for up to 30 calendar days, seal the locations of storage of documents, securities, cash and valuables (where possible, without hindering the insurer’s activities) and make copies or extracts of documents and mark the insurer’s documents to avoid counterfeiting thereof;
(5) issue binding orders to the insurer relating to social insurance matters;
(6) in accordance with the Code of Administrative Infringements, draw up reports on administrative infringements concerning infringements the disclosure of which falls within the remit of civil servants of the Fund administrations;
(7) request that the insurer put their accounting books in order;
(8) obtain the insurer’s explanations on the payment of social insurance contributions and social insurance benefits, the insurer’s explanations on social insurance data presented and explanations of persons located within the territory of the insurer in respect of employment relations where there are grounds to believe that they actually work there;
(9) draw up reports on any infringements detected relating to the calculation of social insurance benefits, the compensation of any damage caused to the Fund or the payment of underpaid amounts to beneficiaries as well as on the fulfilment of other requirements laid down in this Law;
(10) carry out other statutory actions.
3. Directors and Deputy Directors of regional branches of the Fund Board may:
(1) carry out forced recovery of overdue social insurance contributions, late-payment fines, interest and penalties and secure the debt recovery as provided for in Article 20;
(2) submit proposals to the manager of the Register of Legal Entities to launch winding-up proceedings against an insurer in the cases listed in the Civil Code of the Republic of Lithuania.
4. Directors of regional branches of the Fund Board may authorise civil servants of a regional branch of the Fund Board to perform actions referred to in paragraph 3 of this Article.
5. Directors and Deputy Directors of regional branches of the Fund Board may:
(1) in accordance with the statutory procedure, impose administrative penalties. Any penalties imposed shall be included in the Fund’s budget;
(2) contact heads of undertakings, institutions and organisations in respect of circumstances and conditions preventing civil servants of the Fund administrations from duly performing their functions. Heads of undertakings, institutions and organisations shall examine directions issued by civil servants of the Fund administrations and immediately notify any measures undertaken to the Fund administration.
6. The Director and Deputy Directors of the Fund Board may choose not to recover the overpayment of social insurance benefits or payments paid in accordance with the statutory procedure by the Fund administrations from the State budget where it is impossible to recover the overpayment in accordance with the statutory procedure or where the overpayment is without any fault of the beneficiary (dishonesty) and it is impossible to recover it in accordance with the statutory procedure from defaulting persons (successors of their rights and duties), or where it is impossible to recover it for objective reasons, or its recovery is not socially and/or economically feasible where no assets of the person are discovered or the assets discovered are not liquid (hardly liquid); recovery costs exceed the overpayment; it is not feasible to enforce recovery of the overpayment as the economic (social) situation of a natural person is difficult where that natural person requires state support (the person is of retirement age or disabled (before 1 July 2005 – invalids), treatment, medical preventive measures and/or rehabilitation, the person is unemployed or receives social benefits) or such support is already provided to them.
7. In the cases referred to in subparagraph 2 of paragraph 3 of Article 20, data on the imposition, change or expiry of forced mortgage (pledging) shall be immediately but no later than within 24 hours submitted to the Mortgage Register and the forced mortgage (pledging) shall be registered in the Mortgage Register in accordance with the procedure laid down in the regulations of the Mortgage Register. A decision to recover debts from assets pledged as forced mortgage is an executive document enforced in accordance with the procedure laid down in the Code of Civil Procedure.
8. Directors and Deputy Directors of regional branches of the Fund Board may adopt decisions on the recovery of amounts of social insurance and other payments within the remit of those regional branches overpaid because of defaulting beneficiaries without limiting them time-wise.
9. In implementing their statutory rights and duties, civil servants or staff of the Fund administrations shall document any action they take. The form of (an act, certificate, order, resolution, invitation, etc.) and the procedure for drawing up those documents shall be set by the Director of the Fund Board.
 
Article 41. Appealing against decisions and action (omission) of the Fund administrations
1. Insurers, insured persons and other parties concerned (‘the parties concerned’) may appeal against decisions and action (omission) of regional branches of the Fund Board to the Fund Board. The Fund Board is a mandatory extrajudicial dispute resolution authority.
2. Complaints to the Fund Board in respect of decisions and action (omission) of regional branches of the Fund Board shall be examined if they are filed within 20 working days following the day on which the party concerned becomes or should have become aware of the action (omission) disputed or the decision contested while complaints concerning a decision not adopted shall be lodged within 20 working days following the deadline for adopting the decision. Complaints on the granting and/or payment of pensions, annuity and compensatory allowances to creative staff of theatres and concert facilities shall be examined if they are filed within 6 months following the day on which the party concerned becomes or should have become aware of the adoption of the decision contested while complaints concerning a decision not adopted shall be lodged within 20 working days following the deadline for adopting the decision. The deadline for submitting a complaint missed for important reasons for which the party concerned produces documentary evidence may be extended subject to a decision of the Director or Deputy Director of the Fund Board. The procedure for handling complaints within the Fund Board shall be established by the Director of the Fund Board.
3. Any complaint lodged with the Fund Board by the deadline referred to in paragraph 2 of this Article shall be examined and a decision shall be made no later than within 20 working days following the date of receipt of the complaint. This time limit may be extended by 20 more working days where the complaint examination requires additional investigation. This shall be notified to the party concerned.
4. Having examined the complaint, the Fund Board may uphold it fully or partially or reject it. A decision made by the Fund Board in the course of preliminary extrajudicial dispute settlement proceedings may be appealed against in court.
5. Decisions and action (omission) of the Fund Board (except for those referred to in paragraph 4 of this Article) may be appealed against to the Chief Administrative Disputes Commission or a court in accordance with the procedure laid down in the Law of the Republic of Lithuania on Administrative Proceedings.
6. Complaints by insurers about amounts of social insurance contributions calculated additionally as a result of inspections, penalties imposed and other actions of officials of the State Tax Inspectorate shall be examined in accordance with the procedure laid down in the Law on Tax Administration.
7. Disputes relating to the social insurance record for pensions and insured and equivalent income shall be dealt with in court.
8. The Fund administrations shall be exempt from the stamp duty in all cases where they perform their functions assigned to them by laws and other legislation.”
 
Article 2. Entry into force and enforcement of this Law
1. This Law, with the exception of paragraphs (2), (3) and (4) of this Article shall enter into force on 1 January 2017.
2. The Government of the Republic of Lithuania shall adopt implementing acts for this Law by 31 December 2016. 
3. Amounts of the State budget appropriations for funding the general part of pension social insurance (before 31 December 2017 – the main part of pension social insurance) provided for in Article 1 enshrined in Article 23(1) of the Law of the Republic of Lithuania on State Social Insurance shall be established by the Law of the Republic of Lithuania on the Approval of Financial Indicators of the State and Municipal Budgets of 2017 and later. The annual determination of the funds required for funding the general part of pension social insurance shall also take into account the funds required for financing the general part of pension social insurance (in cash equivalent) earmarked after 1 January 2017. The State-funded general part of pension social insurance (in cash equivalent) shall match the reduced part of the rate (in cash equivalent) for funding the general part of pension social insurance.
4. In accordance with the approved methodology, in 2017 the Council of the State Social Insurance Fund shall approve insured income for the previous year and establish insured income for the current year. The Government of the Republic of Lithuania shall approved insured income for the current year 2017 in accordance with the approved procedure.
5. Any contracts on voluntary state pension social insurance concluded before the entry into force of this Law shall expire on the date of entry into force of this Law.
6. I hereby repeal the Law No XII-2280 amending Article 4 of the Law No XII-1990 amending Articles 4, 31 and 36 of the Law No I-1336 of the Republic of Lithuania on state social insurance.
 
I promulgate this Law passed by the Seimas of the Republic of Lithuania.
 
 
 
President of the Republic                                                                                     Dalia Grybauskaitė