REPUBLIC OF LITHUANIA                                     
                                                                                
                LAW ON INDIVIDUAL INCOME SECURITY                               
                                                                                
                                                                                
     This law   shall  establish  the  principles  of  supporting               
individual income  taking   into account   minimum  standard   of               
living  and thedynamics of  prices. Guarantees  provided by  this               
law   shall   be applied  to   the citizens  of the  Republic  of               
Lithuania, as  well as foreign citizens  permanently residing  in               
Lithuania   and persons  without citizenship    if  it    is  not               
otherwise provided by the laws of the Republic of Lithuania or by               
interstate agreements.                                                          
                                                                                
                            Chapter 1                                           
                        Basic Definitions                                       
                                                                                
     Article 1. As used in this law:                                            
      wages  (used   for the  indexation of  income) -payment  by               
time, piece work payment and salary;                                            
     indexation-adjustment of  nominal income  or its  rates with               
the aim  to  fully    or  partially    compensate  income    loss               
associated  with changes in prices of goods and services;                       
     minimum standard  of living  -  means  the  sum  of  monthly               
earnings of a family per capita per month and guaranteeing to all               
its  members  socially  acceptable    minimal  level    of  needs               
corresponding  to   the  physiologically   acceptable  norms   of               
nutrition as  well as  needs  in  clothing,  footwear,  furniture               
household and  sanitary commodities,  needs  in  housing,  public               
utilities, transportation,  communication services,  and services               
in culture and education;                                                       
     income -  nominal income of the whole family (wages together               
with incentive   payments,   royalties,    pensions,    stipends,               
benefits, income received  from small  holding and  from  private               
economic activity,  income   from private    property,  interest,               
dividends and  others) as   well as  income received in kind free               
of charge  or on preferential terms  at a job ,valued in terms of               
money at current retail prices;                                                 
     income subject   to  support   is computed   for  one family               
member by  deducting from  income  compulsory  payments  and  not               
including  social-security   benefits  paid   under   this   law,               
compensations (with  the exception   of  cases  provided in  this               
law) as well as income received from  all kinds  of  insurance                  
     with  the  exception  of temporary disablement allowances;                 
lost income  means the difference between basic income multiplied               
by retail price index and real income;                                          
     family -   from  the   point of   view  of  social  support,               
spouses, couples,  widows   and widowers   regardless of  whether               
they   have children (dependants)  or not,  guardians with  wards               
and  single persons shall  be considered  as a  separate  family.               
     Pensioners regardless   of   whether  they  live  separately               
or   with    their  childrens'  (guardians')  families  shall  be               
considered  as   a  single   family.  Single  students  shall  be               
considered as  members of  their  parents'  (guardians')  family.               
Servicemen who  are on  active duty,  children  deemed  wards  of               
State and   placed  in  boarding  homes  or  other  institutions,               
persons serving   their   sentence   in imprisonment institutions               
shall not  be considered  as part of a family.                                  
                                                                                
                            Chapter 2                                           
       Minimum Standard of Living and Indexation of Income                      
                                                                                
     Article 2.  Minimum standard  of living shall be approved by               
the  Supreme   Council  of  the  Republic  of  Lithuania  on  the               
recommendation of  the Executive  Branch at least once every five               
years.                                                                          
     Minimal  wages     and    minimal    pensions    shall    be               
established  by separate laws.                                                  
                                                                                
     Article 3. Indexation base shall be the summary retail price               
index which is computed and made available to the public at least               
every three  months by  the Department  of Statistics  under  the               
auspices of the Government of the Republic of Lithuania.                        
                                                                                
     Article 4.  The minimum  standard of living shall be indexed               
at the  same frequency  as the  Department  of  Statistics  shall               
compute and  make available  to the  public the  index of  retail               
prices but  no less  frequently than  once a  year.  The  minimum               
standard of living is indexed by the Ministry of Social Security.               
                                                                                
     Article 5.  Regular earnings  (stipends,  salaries,  social-               
security benefits) and minimal wages shall be indexed in the same               
manner as  the minimum standard of living. Wages shall be indexed               
at all enterprises seeking profit if it is provided for in labour               
or employment contracts.                                                        
     Single earnings   and  income  received from  property shall               
not be indexed.                                                                 
                                                                                
     Article  6.   The  income   which  through   indexation   is               
established as lost shall be subject to compensation. It shall be               
compensated at  the same  frequency as it shall be indexed if the               
retail  price   index  exceeds   1.1  computing   from  the  last               
compensation. The  lost income shall be compensated from the same               
resources  as   the  given   income  is   paid  out.  Claims  for               
compensations that had to be paid out shall be resolved by court.               
                                                                                
     Article  7.  The  government  may  suspend  the  payment  of               
compensations but for no longer than six months.                                
                                                                                
     Article 8.  The amount of compensations shall be established               
according to the minimum standard of living, the amount of income               
liable for  compensation and  lost income,  as well  as  rate  of               
compensation determining the portion of lost income.                            
The amount  of lost regular payments that are smaller or equal to               
minimum standard  of living calculated after indexation, shall be               
fully compensated,  i.e. the  rate of compensation shall be equal               
to one.                                                                         
     The amount  of lost  regular payments  exeeding the  minimum               
standard of  living   calculated   after   indexation,  shall  be               
compensated according  to the  decreasing rate of compensation of               
income.                                                                         
     The Government   shall  establish   the level   of   regular               
payments  which   are  not  subject  to  compensation,  i.e.  the               
compensation rate  shall be  equal to  zero. The  Government must               
compensate regular  payments  which  are  not  lower  than  three               
average   minimum    standards   of   living   calculated   after               
indexation,according to the decreasing rate of compensation.                    
                                                                                
     Article 9.  At enterprises the lost amount of wages shall be               
compensated in  the same  manner as  regular payments  if  it  is               
provided for  in labour or employment contracts. A certain amount               
of wages shall be lost when retail price index exceeds the growth               
rate of  average wages  at a given enterprise. The lost amount of               
wages shall be calculated by multiplying that exceeding amount by               
the given base wages.                                                           
                                                                                
                                                                                
                            Chapter 3                                           
                     Social Security Benefit                                    
                                                                                
                                                                                
                                                                                
     Article 10.  Social security  benefit shall  be  paid  to  a               
family whose  income per  capita is  lower than income subject to               
State support.  The benefit  shall be  computed according  to the               
principle adverse  to income  tax, i.e.  income which  is smaller               
than income  liable to  support,shall not  be subject to taxation               
and social security benefit shall be added thereto.                             
                                                                                
     Article 11.  The amount  of social  security  benefit  shall               
depend upon  the rate  of social  security benefit  (r)  and  the               
amount by  which family  income is lower than minimum standard of               
living. The rate of social security benefit shall be equal to the               
proportion between  income  guarantee  (G)  paid  to  the  family               
without any income, and minimum standard of living (MSL):                       
                                                                                
r = G/MSL                                                                       
                                                                                
     The amount   of  income that  is subject  to social security               
benefit, the  rates  of social  security benefit  and the  amount               
of income guarantee shall be established by the Government.                     
The amount  of income  guarantee cannot be lower than the portion               
of income spent on food ( when eating at home ) under the indexed               
minimum standard of living.                                                     
                                                                                
     Article 12.  Social  security  benefit  of  a  family  whose               
average monthly  income calculated  for one  person (Y)  is lower               
than or  equal to  real income per capita (RI), shall be computed               
by multiplying  the difference  between MSL and Y by the rate (r)               
of social security benefit (SB).                                                
                                                                                
SB = r(MSL - Y),                                                                
                                                                                
when Y RI, SB = 0.                                                              
                                                                                
     Article 13.  Persons shall  be held  responsible for  filing               
correct  income  return  under  procedure  established  by  laws.               
Sheltered income  and a  penalty equal to 300% of social security               
benefit paid  out to  a person,  shall be recovered and deposited               
into the  local budgets.   Local  governments shall  institute  a               
legal action  to recover  the said  amount. The  Government shall               
establish  the  procedure  according  to  which  social  security               
benefits shall  be paid  out and the correctness of income return               
shall be supervised.                                                            
                                                                                
                                                                                
VYTAUTAS LANDSBERGIS                                                            
President                                                                       
Supreme Council                                                                 
Republic of Lithuania                                                           
                                                                                
Vilnius                                                                         
27 September 1990                                                               
No I-618