• Applicable Legislation
• Regulatory Framework
• Social Security Contributions and Social Benefits

The social security system in Lithuania is comprised of the social insurance system, the medical insurance system and the social support system. The most significant components of the State social security system are the social insurance system (including pension insurance) and the medical insurance system. Though the 30 June 1999 Law on Pension Funds came into effect on 1 January 2000, private pension funds do not actually function yet. At present, all employees are insured on a mandatory basis. Employers (i.e. Lithuanian economic entities or individuals that pay wages to employees) are required by law to pay or withhold contributions in full on behalf of their employees. Additionally, the law also provides for voluntary social insurance.


Applicable Legislation

1. The 13 December 1990 Law No. I-864 of the Republic of Lithuania "On Support of the Unemployed";
2. The 21 May 1991 Law No. I-1336 of the Republic of Lithuania "On State Social Insurance";
3. The 28 July 1994 Law No. I-549 of the Republic of Lithuania "On State Social Insurance Pensions";
4. The 21 May 1996 Law No. I-1343 of the Republic of Lithuania "On Health Insurance";
5. The 3 June 1999 Law No. VIII-1212 of the Republic of Lithuania "On Pension Funds";
6. The 23 December 1999 Law No. VIII-1509 of the Republic of Lithuania "On Occupational Accidents and Occupational Diseases Insurance";
7. The 12 September 2000 Law No. VIII-1926 of the Republic of Lithuania "On the Guarantee Fund";
8. The 12 December 2000 Law No. IX-110 of the Republic of Lithuania "On Social Insurance of Maternity and Illness";
9. The 18 November 1994 Resolution No. 1156 of the Government of the Republic of Lithuania "On Approval of the Regulations of Grant and Payment of State Social Insurance Pensions";
10. The 4 July 1997 Resolution No. 727 of the Government of the Republic of Lithuania "On Approval of the Terms and Procedure of Payment of Compulsory Health Insurance Contributions";
11. The 23 March 2000 Resolution No. 339 of the Government of the Republic of Lithuania "On Approval of the Regulations of State Voluntary Social Pensions Insurance".

The Ministry of Labour and Social Protection of the Republic of Lithuania determines and implements policies regarding social support and social insurance, prepares drafts of legal acts and adopts legal acts within its competence.

The Board of the State Social Security Fund and its territorial departments collect contributions and distribute insurance payments.

The Ministry of Health Care determines medical care policies, prepares drafts of legal acts and adopts legal acts within its authority.

The Board of Compulsory Medical Insurance, an administrative unit under the Government of the Republic of Lithuania, and the National Patients' Fund are the main institutions in charge of compulsory medical insurance. The National Patients' Fund receives its funding from a portion of the social insurance contributions made to the State Social Security Fund and a portion of personal income taxes collected by the State Tax Inspectorate.

The Securities Commission will be the main supervisor of pension fund activities. In this respect, the Securities Commission is empowered to issue legal acts and regulations within its competence. Its main functions are to issue and revoke licences for pension fund activities, to give permissions to reorganise pension funds, to provide official interpretations and recommendations on pension fund activities, to apply sanctions and to take other actions within its authority.


Social Security Contributions and Social Benefits

Social Security Contributions by Employers

Employers must pay to the State Social Security Fund a mandatory social security contribution for every employee. The employer's contribution equals 31% of the employee's gross wage: 1% - labour accidents' insurance, 3% - medical insurance, 22.5% - pension insurance; 3% - sickness and maternity or paternity insurance; and 1.5% - unemployment insurance. Therefore, social security contributions depend on the employee's gross wage which may not be less than the minimum wage set by the Government (from 1 January 2001 set at LTL 430 (EUR 124.54) per month). Employer's social security contributions are not withheld from the gross wage, but must be calculated separately on top of the gross salary and paid not later than the last working day before the 15th day of the following month. The State Social Security Fund transfers medical insurance contributions to the National Patients' Fund.

Contributions by Employers to Guarantee Fund

The purpose of the Guarantee Fund is to ensure the payment of limited amount salaries to the employees of the enterprises that are under bankruptcy procedures or have been adjudged bankrupt. Employers must pay to the Guarantee Fund a mandatory contribution for every employee. The employer's contribution equals 0.2% of the employee's gross wage.

Contributions by Employees

Employers must withhold 3% of the employee's gross wage as a social insurance contribution (2.5% for pension insurance and 0.5% for sickness and maternity or paternity insurance) payable to the State Social Security Fund.

State Social Insurance for Self-Employed Persons

The State Social and Medical Insurance is obligatory for self-employed persons:

1. owners or tenants of personal enterprises;
2. members of general and limited partnerships;
3. attorneys-at-law and assistant attorneys;
4. notaries;
5. persons working under a tax patent;
6. farmers and adults who work on the farm.

Social Benefits

Insured individuals are entitled to the following benefits under the social and medical insurance system:

1. old-age pensions;
2. disability pensions;
3. widow, widower or orphan's pensions;
4. sickness or temporary disability benefits;
5. maternity or paternity benefits;
6. medical services;
7. unemployment benefits;
8. compensation for occupational accidents (compensation for illness resulting from an occupational accident or occupational disease; single payment of compensation for work disablement; periodic payment of compensation for work disablement);
9. funeral benefits.