The president signed into law an amendment to the bridging pensions law, which removes their debtor nature and increases the annual limit on deductions from the income expenses for membership dues paid to unions in a given tax year.
– People who started working after January 1, 1999, or in circumstances that are injurious to health or are particularly stressful, or in circumstances of special physical or psychophysical stress, have worked in occupations such as miners, steel workers, fishermen or persons who for a care home about people who suffer from a mental illness, or have a paramedic or other profession, but with such characteristics […] have full service and are 55 years old for women and 60 years old for men, thanks to this law they can retire on a bridging basis, President Andrzej Duda said after signing the law.
The amendment removes the debtor character of bridging pensions, introduces a regulation on the protection of union activists in employment law matters, increases the annual limit for deducting income costs for membership fees paid to unions in a given tax year, excludes the surcharge for special employment conditions from the remuneration component list , which is taken into account when calculating the amount of the employee’s minimum remuneration.
What does the amendment change?
The amendment assumes that a person who applies for the determination of the right to bridging pension before the termination of employment and meets the other conditions for determining the right to bridging pension (including 55 years for a woman and 60 years for a a man, total seniority, who performs work subject to conditions after 31 December 2008), the pension authority will issue a decision on the granting of a bridging pension.
However, the bridging pension entitlement of such a person shall be suspended until the employment relationship is terminated.
The amendment expands the powers of the National Labor Inspectorate (PIP) in verifying the qualification of work as work performed under special circumstances or of a special nature, in connection with a complaint by an employee for not recording in the employee register the performance of work under special circumstances or of a special nature, for which contributions are payable to the Bridging Pension Fund.
It is estimated that the increase in expenditure for bridging pensions in the first year (2024) will be 12.6% (in discounted amounts of PLN 220 million) and will increase systematically compared to the projected expenditure from now on (due to the current cut-off mechanism) . These expenses will be financed from the national budget, because the Bridging Pension Fund, from which bridging pensions are financed, already needs considerable support in the form of subsidies from the national budget (approx. 80% of the FEP income).
Income tax change
The amendment also provides for an amendment to the provision of the Personal Income Tax Act, consisting of an increase in the annual limit for deducting expenses from income from membership fees paid to unions in the tax year from PLN 500 to PLN 840.
The proposed increase in the deduction limitation is intended to increase citizens’ interest in social activities to improve working conditions through union membership. It applies to income (income) earned from January 1, 2023.
It is estimated that the proposed solution will reduce the revenues of public finance sector entities by up to approximately PLN 50 million for one year. The above value is determined on the basis of the number of taxpayers on the basis of the PIT-11 return for 2022, in which payers have indicated the collected membership fees for trade unions (1,218,000 taxpayers) and the assumption that each taxpayer makes a deduction equal to the limit .
The deduction for the payment of membership fees in trade unions was introduced from January 1, 2022, initially with an annual limit of PLN 300, and from July 1, 2022 this limit was increased to PLN 500. However, this limit applied to income earned from January 1, 2022. For example, taxpayers applied the deduction for the first time in their tax returns for 2022.
The amendment expands the catalog of remuneration components that are not taken into account in the calculation of the remuneration amount with a supplement for special employment conditions as a result of work performed under particularly stressful or particularly harmful conditions for health, work with a high physical or mental strain effort or work that is particularly dangerous.
The amendment also contains an unequivocal provision on the need to impose on the employer, in the judgment declaring the termination of the employment contract non-binding or resuming the employee, the obligation to keep the employee employed until the final conclusion of the procedure.
The Bridging Act regulates the conditions for acquiring the right to a periodic payment in the form of a bridging pension and types of work under special conditions and of a special nature, the performance of which gives entitlement to a bridging pension. They are paid until the date on which a person receiving a bridging pension acquires the right to a universal old-age pension after reaching retirement age.
This applies, for example, to miners, metal workers, carers of residents of nursing homes for the chronically mentally ill, mentally handicapped children, young people or adults, teachers of educational institutions or paramedics.
In April this year, 40.8 thousand people received a bridging pension. In 2022, the expenditure on bridging pensions will amount to approx. PLN 1.8 billion.
Source: Do Rzeczy
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
