ADMINISTRATION, BUDGETING AND CASH MANAGEMENT OF SOCIAL INSURANCE PROGRAMES

1. ADMINISTRATION, BUDGETING AND CASH MANAGEMENT OF SOCIAL INSURANCE PROGRAMES BULGARIAN EXPERIECE PhD J. Hristoskov

2. Bulgarian reforms in the public social insurance - administration and financing • Integral social insurance administration - National Social Security Institute and Health Insurance Fund • Institutional autonomy – the both institutions are autonomous public entities, established by law • Unification – all population is covered in one statutory public insurance scheme • Financial independency of the contributive social insurance programs • Clear distinction in financing the contributive and non-contributive programs • Jointly (unified) collection of social insurance contributions and taxes – National Revenue Agency (NRA) at the Ministry of Finance (MOF)

3. Social security programs in Bulgaria and their financial background • Public employment related (contributive) social insurance programs – financed mainly by social insurance contributions • Public non-contributive social protection programs – financed by the state budget • Private pension and health care programs - financed by mandatory and voluntary contributions

4. Public employment related social insurance programs financed by contributions • Old age, invalidity and survivors pensions • Sickness and maternity – cash benefits and prophylactic and rehabilitation • Work injuries and occupational sickness - cash benefits, prophylactic and rehabilitation, prevention measures • Unemployment – cash benefits • Health care – in kind health services

5. Public social protection programs financed by state budget • Family benefits – means tested • Social assistance – family income support in cash and in kind - means tested • Integration supplements for the disabled persons • Social (non-contributive) pensions • Tax reductions for every child in the family

6. State budget transfers to pension fund • Transfer equal to 12% of the total annual tax base • Transfer for the granted insurance periods – maternity, army service, legitimized strikes • Transfer for health insurance of the pensioners - 8% of the monthly pension • Transfers for special supplements and one time payments

7. SOCIAL INSURANCE CONTRIBUTIONS - CASH FLOWS STATE BUDGET/ MOF EMPLOYERS SELF-EMPLOYED ORDERS AND PERSONAL INFORMATION FOR TAXES AND CONTRIBUTIONS PAYMENTS ORDERS AND PERSONAL INFORMATION FOR CONTRIBUTIONS AND TRANSFERS DAYLY REVENUES DAYLY REVENUES BANK ACCOUNTS OF NRA REGIONAL OFICES NSSI ACCOUNTS BY FUNDS IN BULGARIAN NATIONAL BANK NRA ACCOUNTS IN BULGARIAN NATIONAL BANK

8. Advantages of the unified collection of taxes and contributions • Single register of taxpayers and contributors • Employers and self-employed save more time • The compliance should be improved (?) • The administrative costs should be decreased (?) • The illegal labor market should be limited (?)

9. Disadvantages of the unified collection of taxes and contributions • The new administration pays more attention to tax collection • The collection of data for the personal register is disparaged • The lack of the personal information (or correct information) leads to delay of the benefits payment • The attitude to the social insurance contribution became negative

10. THANK YOU? QUESTIONS ?