How and where our insurance money goes

22.02.2022

HOW AND WHERE OUR INSURANCE MONEY GOES

Have you ever wondered where your money from your monthly social security contributions goes? Although these monthly cash payments guarantee material protection for workers, some people prefer to be insured at an unrealistically low amount or even work without social security and therefore - without a guarantee of payment, for sick leave, for compensation, etc. According to business about a fifth of the country's economy is in the informal sector.

According to the National Social Security Institute, almost every third working Bulgarian is insured on the minimum wage or even on a smaller amount. And the amount of pension you will receive depends on how much money you have in the account. That is why it is important to insure your real income. Non-declaration of income and receiving money "under the table" are among the main reasons for low pensions in our country. To break this vicious practice, everyone needs to know how their money is distributed and what risks they cover.

Types of insurance

- Health insurance - it provides a basic health package guaranteed by the state. The quality of "insured person" must be acquired under the Health Insurance Act (HIA). Usually, Bulgarian citizenship is the basis for acquiring this quality and has nothing to do with employment. Foreign citizens can also acquire the status of "insured person" for the purposes of compulsory health insurance, but in the presence of the conditions provided for in the Health Insurance Act.

- State Social Insurance (SSI) - social insurance for general illness, maternity, pensions, unemployment, accidents at work and occupational diseases. All natural persons who perform labor activity for which they are subject to compulsory insurance are insured; the self-insured persons are insured for the time during which the due advance insurance contributions have been paid; seafarers are insured for the time during which the due insurance contributions are paid.

- Supplementary mandatory pension insurance - SMPI is the second pillar of the pension system. Mandatory insurance: in the universal pension fund - all born after December 31, 1959, if they are insured in the Pension fund of the state social insurance; in an occupational pension fund - employees of the first and second category of work, regardless of age.

Social risks covered by social security

Persons who are subject to state social insurance are insured in the following funds:

- General Sickness and Maternity Fund for general illness and maternity, which includes insurance for temporary incapacity for work, temporary incapacity for work and maternity;

- Pension Fund for invalidity due to general illness, old age and death;

- Fund "Pensions for persons under Art. 69“ for disability due to general illness, old age and death;

- the Accident at Work and Occupational Disease Fund for occupational accidents and diseases, which includes disability, death, temporary incapacity for work and temporary incapacity for work due to an accident at work and occupational disease;

- Unemployment Fund for Unemployment.

Social Security provides benefits, allowances and pensions for temporary incapacity for work, temporary reduced working capacity, disability, maternity, unemployment, old age and death.

Social Security income

The insurance income determines the amount of your insurance contributions for all types of insurance. The State Social Insurance Budget Act sets limits on insurance income for each year.

Insurance check

If you want to know exactly how much insurance your employer provides and monitor your status, you can check the NSSI website. All you have to do is enter your PIN and PIC (Personal Identification Code). If you do not have a PIC, you can personally get one at the nearest NSSI office only against an ID card or through an authorized person by presenting a notarized power of attorney.

Restoration of overpaid insurances

If you have overpaid for compulsory social security contributions that you want to recover from the National Revenue Agency, see Refunds. For a VAT refund, see also VAT refund.