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POLAND: Proposed changes to ZUS

On Saturday, during the PiS election convention in Katowice PM Morawiecki announced the “Package for Entrepreneurs”, which amongst others includes certain changes to the ZUS social insurance system:

PLN 500 for ZUS for companies – small ZUS for small entrepreneurs

Entrepreneurs with revenues not exceeding PLN 6000 per month and the income up to PLN 10000 per month will benefit from lower ZUS levies. According to the proposal, entrepreneurs will on average save PLN 500.

Lump sum ZUS without changes

Entrepreneurs, which do not fall into the above-mentioned group will continue to pay the lump sum ZUS contributions on current rules.

Furthermore, on Tuesday the Council of Ministers adopted a draft bill on the 2020 budget. According to the budget proposal, the government foresees a return to its previous plan of removing the insurance cap. Currently, the law permits Poles to stop paying monthly ZUS contributions after their income exceeds approximately PLN 120 thousand – a mechanism which allows the insurer to avoid paying excessive retirement pensions in the future. In November 2018, the Constitutional Tribunal found that the bill abolishing the maximum contribution for national insurance levies (ZUS), passed by the Sejm in December 2017, is in contempt of article 7 of the Polish constitution. Article 7 states: The organs of public authority shall function on the basis of, and within the limits of, the law. The core of the judgement revolved around the voting procedure in the Senate, with the Tribunal arguing that it was impossible to confirm the quorum during voting on this bill.