Farmers’ Old Age Pension
Ubezpieczenie społeczne rolników
Coverage
Mandatory insurance
- Self-employed entrepreneurs and spouse/partner working in the agrarian sector (e.g. farmers, foresters, winemakers) who own at least one hectare of land and who are not compulsorily insured in the statutory old age pension scheme.
Financing
General finances
- Mainly tax-financed out of the general budget.
- Partly PAYG-financed from insurance contributions.
Contribution rates
- Flat-rate monthly contribution payments independent of declared income for insured entrepreneurs and spouse/partner; size of contribution payments is dependent on the size of the cultivated area.
Taxation of contribution payments
- Tax exemptions for insurance contributions excluding state subsidies.
Administration
- The ‘Farmers’ Social Insurance Institution’ (Kasa Rolniczego Ubezpieczenia Społecznego) manages the scheme and pays benefits directly to the person.
Qualifying Conditions
Qualifying conditions
- Statutory retirement age is 60 years for women and 65 for men; minimum insurance period: 20 years for women and 25 years for men.
Early retirement
- No possibilities for early retirement.
Deferred retirement
- Retirement can be deferred.
Combining employment & retirement
- Ceased agricultural activity is a precondition for claiming pension benefits.
Benefits
Pension benefits
- Defined benefit; primarily based on the length of insurance/credited period and the minimum amount of the statutory old age pension scheme.
- If the amount of the old age pension is lower than the amount of the minimum pension in the statutory old age pension scheme, the amount of such benefit is ex officio increased to this amount.
Benefit calculation
- The benefit consists of two parts: (1) the contributory part is 1% of the ‘basic pension’1 for each year of insurance; (2) the supplementary part: if the number of years taken to calculate the contributory part is less than 20, then 95% of the ‘basic pension’ are added. For each full year over a period of 20 years taken into account for the contributory part, the supplementary part is reduced by 0.5% of the basic pension.
- Adjustments: yearly adjustments of benefits according to adjustment ratio based on the annual consumer price index and growth of average earnings.2
Taxation and social security contributions
- Pension benefits are subject to income tax.
- Mandatory contributions for health insurance.
Coverage
Financing
Administration
Qualifying Conditions
Benefits
Mandatory insurance
- Self-employed entrepreneurs and spouse/partner working in the agrarian sector (e.g. farmers, foresters, winemakers) who own at least one hectare of land and who are not compulsorily insured in the statutory old age pension scheme.
General finances
- Mainly tax-financed out of the general budget.
- Partly PAYG-financed from insurance contributions.
Contribution rates
- Flat-rate monthly contribution payments independent of declared income for insured entrepreneurs and spouse/partner; size of contribution payments is dependent on the size of the cultivated area.
Taxation of contribution payments
- Tax exemptions for insurance contributions excluding state subsidies.
- The ‘Farmers’ Social Insurance Institution’ (Kasa Rolniczego Ubezpieczenia Społecznego) manages the scheme and pays benefits directly to the person.
Qualifying conditions
- Statutory retirement age is 60 years for women and 65 for men; minimum insurance period: 20 years for women and 25 years for men.
Early retirement
- No possibilities for early retirement.
Deferred retirement
- Retirement can be deferred.
Combining employment & retirement
- Ceased agricultural activity is a precondition for claiming pension benefits.
Pension benefits
- Defined benefit; primarily based on the length of insurance/credited period and the minimum amount of the statutory old age pension scheme.
- If the amount of the old age pension is lower than the amount of the minimum pension in the statutory old age pension scheme, the amount of such benefit is ex officio increased to this amount.
Benefit calculation
- The benefit consists of two parts: (1) the contributory part is 1% of the ‘basic pension’1 for each year of insurance; (2) the supplementary part: if the number of years taken to calculate the contributory part is less than 20, then 95% of the ‘basic pension’ are added. For each full year over a period of 20 years taken into account for the contributory part, the supplementary part is reduced by 0.5% of the basic pension.
- Adjustments: yearly adjustments of benefits according to adjustment ratio based on the annual consumer price index and growth of average earnings.2
Taxation and social security contributions
- Pension benefits are subject to income tax.
- Mandatory contributions for health insurance.
1 The ‘basic pension’ for the farmers’ old age pension scheme is defined in the act; as of 1 March 2020 it amounts to PLN 972.40 (PLN 1,013.63 in 2021).
2 The adjustment ratio is the average annual consumer price index in the previous calendar year increased by at least 20% of the real growth of the average wage in the previous calendar year.
Legal Basis: Farmers’ Social Security Act (ustawa o ubezpieczeniu społecznym rolników).