September 14, 2022 - The Minister of Labour, Pension System, Family and Social Policy, Marin Piletić, was a guest on Croatian Radio's show "A Sada Vlada”, where he discussed the government measures of help for the upcoming winter, as well as the changes to the Labour Act.

As Poslovni writes, he commented on the Government's package of measures to help businesses and citizens.

“Part of the package encompasses measures from our department, but the largest part is concerned with HEP, where the government has enabled many to pay a price that is not market but artificially created. A good number of entrepreneurs pay the price for electricity that households do. Also, all social care institutions from the category of entrepreneurship will pay for electricity like households, Minister Piletić said.

He pointed out that there is no category that they did not include, from farmers, fishermen, students, beneficiaries of child benefits, pensioners...

“When it comes to pensioners, the Government has intervened for the third time in just a year and a half with a one-time cash supplement for those with lower monthly incomes. Not only did we raise the grade level, but we also increased the pension threshold that can receive a one-time supplement. Also, one of our goals was to raise the lowest pensions by three percent from January 1, 2025. By intervening in the final bill, we made it so that the percentage increase of the lowest pensions does not wait for 2025, but starts on January 1, 2023, he said.

Measures for the unemployed

He added that they included the unemployed for the first time.

“Those who were on the labour exchange before September 1 will receive a quarterly cash supplement of HRK 250 in the next three months. It has been shown that the government intervenes at the right time, that the package is strong and comprehensive, and most of all fair. We must protect all categories of citizens, especially those with lower incomes”, he emphasized.

When asked if he expects an increase in the number of unemployed since the tourist season is coming to an end, Minister Piletić said that the number of unemployed increases slightly after each tourist season, but that they do not expect the number to grow alarmingly.

“We are at record low unemployment rates. The number is around 110,000 registered. This is significantly less than at the beginning of this government's mandate”, he said.

He also referred to the amendments to the Labour Act.

“The percentage of workers who work on a fixed-term contract is decreasing from year to year, which we are satisfied with, we have reached a kind of European average, but we still have a large number of short-term contracts. That is why we are introducing the novelty of limiting fixed-term contracts to a maximum of three years and a maximum of three contracts”.

“He pointed out that one of the key innovations is platform work”, i.e. work from home.

“The employer can come to the employee's home and see what kind of conditions he is working in, with prior notice and the worker's consent”.

“There was a proposal that there be no notice period or severance pay for workers over the age of 65 and 15 years of service unless the worker and the employer agree otherwise. Here we wanted to encourage employers that after reaching the age of 65 if the worker wants to stay working and meets all the conditions for a pension, that the employer is not obligated to pay severance pay. Someone who fulfils the conditions for a pension will not be neglected, but will receive a pension and then the employer is not obliged to pay severance pay. This way, we stimulate both the employer and the employee, so that if they wish, they can stay longer in the world of work, but we have left it up to the employer and the employee to agree”.

Increasing wages in the public sector

Minister Piletić said that the negotiations have not started yet, and that at the next government session, he will appoint negotiating committees on behalf of the government, for both state and public servants and employees.

“We want to react and increase the salary base in both state and public services, following the situation of economic growth and filling the budget. Considering the autumn package, there is a lot of pressure on the budget, but I believe that in negotiations and dialogue we will find the best solution that would show that we want to increase the base”, Piletić pointed out.

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ZAGREB, 15 October 2021  - The Croatian Pensioners Party (HSU) warned on Friday that over 600,000 pensioners in Croatia received pensions below the poverty line, and that the ratio of the average pension to the average wage was never lower, amounting to 35.9 percent.

The number of poor people in Croatia is growing by the day, and according to Eurostat, the poverty line is currently HRK 2,927, while the risk of poverty rate is higher than ever before, HSU leader Veselko Gabričević told a press conference, held to mark the International Day for the Eradication of Poverty, observed on 17 October.

"We are seeing a surge in energy prices, notably in prices of petroleum products, which is having a direct impact on prices of all staples. The last pension adjustment of HRK 68 is almost next to nothing. Regardless of the legal requirement for pensions to be adjusted twice a year, pensioners' purchasing power is decreasing and their lives are becoming harder," Gabričević said. 

The HSU is dissatisfied with the present pension indexation formula, saying that it leads pensioners into even greater poverty. It says that this issue has been raised with the National Council for Pensioners to stop a further decline of pensions in relation to wages. The party is calling for a comprehensive pension reform to increase the lowest pensions.

According to the Croatian Pension Insurance Institute, 1,113,522 pensions were paid out this September, and 722,644 pensioners have pensions ranging between HRK 500 and 3,000.

Gabričević noted that 9,195 pensions paid out in September exceeded HRK 8,000, including those of members of Parliament. 

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ZAGREB, 6 July, 2021 - The Croatian Pension Insurance Institute (HZMO) said on Tuesday that the number of pension insurance contributions had been on the rise for five months in a row, and the number of insurees was higher by 3.54% at the end of this June compared to June 2020.

At the end of this June, the contributions were paid by 1,596,112 insurees, or by 54,499 people more than the year before.

Broken down by sector, the highest number of pension insurees was registered in the processing industry (more than 246,000 people covered by insurance contributions).

The rise in the number of insurees has been registered in several sectors, for instance, in construction, IT, the hospitality industry and so on.

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ZAGREB, 6 July, 2021 - The Croatian Pension Insurance Institute (HZMO) said on Tuesday that the number of pension insurance contributions had been on the rise for five months in a row, and the number of insurees was higher by 3.54% at the end of this June compared to June 2020.

The government-sponsored amendments were forwarded to the parliament at the session of the Andrej Plenković cabinet on 1 July.

In May, there were 216,000 family pension beneficiaries, and most of them were surviving spouses whose average monthly pension allowance was HRK 2,096, which was below the average pension. For instance, in May, pension associations reported that the average pension paid out  for February stood at HRK 2,567.

The budget allocation for this purpose has been ensured for 2022 and 2023.

According to the government's estimates, this year, an estimated 1,100 recipients of family pensions can exercise this right to work part-time and continue receiving family pensions. In 2022, the numbers can rise to 3,200 and in 2023 to 4,100 beneficiaries.

(€1 = HRK 7.484635)

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ZAGREB, 9 March, 2021 - Labour Minister Josip Aladrović said on Tuesday that negotiations were underway with pensioner unions and associations about COVID supplements for retirees.

"We've had a few operational meetings and that issue is something that cannot be resolved in such a short time however, I am certain that we are on the right track for an agreement regarding a COVID supplement," said Aladrović, when asked by the press whether the talks reached a standstill.

He announced that talks on that issue would continue at the end of this week and in the coming period.

"I am certain that Croatia can become one of the countries that introduces a COVID supplement but we have to be aware on the other hand of the fiscal limits in our budget," he added.

Aladrović added that he would leave all options open,however, he is certain that good will for an agreement exists and that it is possible.

Asked whether the decision was waiting for the local election, Aladrović said that this is a supplement that is unknown in other European countries and that it cannot be brought into the context of current political circumstances and situations.

Last month during a meeting with Prime Minister Andrej Plenković, pensioner associations raised the issue of a COVID supplement and asked for just over 800,000 pensioners with a pension allowance of up to HRK 2,710 to be paid a COVID supplement of €150 (HRK 1,125).

They also proposed that about 244,000 pensioners with pension allowances between HRK 2,710 and HRK 5,000 be given a supplement of €100 (HRK 750) and for 7,200 single pensioners who receive a pension allowance of more than HRK 5,000 to be given a supplement of €50 (HRK 375).

The supplement would, according to their calculations, come to HRK1.93 billion.

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ZAGREB, Dec 18, 2020 - Prime Minister Andrej Plenkovic said on Friday that regardless of the duration of the COVID-19 crisis, salaries and pensions would not come into question and that job-retention measures would remain in force as long as necessary.

He was asked by the press how long the current lockdown could last without salaries and pensions coming into questions. "They haven't this year, they won't the next either. Salaries will be here, pensions will be here, we'll retain jobs."

Plenkovic said they would do everything that a responsible government and state should do, and which proved to be good, in these particular circumstances.

"The next six months are key. If we look at the experience from last spring, when the weather gets a little warmer, the epidemic likely won't be as strong as it is today. Secondly, the vaccine will come and we will vaccinate our citizens, showing resilience to the further spread of the infection."

He said the government would find the money for job-retention measures as long as they were necessary, while at the same time working on economic recovery and resilience as well as investment.

The government will use this opportunity to reset Croatia for a digital and green transition and to invest in the fourth industrial revolution, while at the same time preventing deep inequality in society and other crises, Plenkovic said. "That's the responsibility of the government and the state, and we will stand behind that. Everything we have done so far has been in line with that."

Commenting on central bank forecasts, he said this time of holiday shopping was important for the functioning of the state, adding that the COVID-19 measures were balanced.

The central bank estimated yesterday that real GDP could drop by 8.9% this year, up from the 8% drop estimated in mid-October, and rebound by 5% in 2021, down from the estimated 5.2%.

The central bank does not expect GDP to reach the pre-crisis level next year but in 2022. If the COVID situation is not put under control by the end of March 2021 and some parts of the economy need to remain locked, the estimate is that the pre-crisis level could be achieved only in 2023.

ZAGREB, Dec 14, 2020 - The Croatian Pension Insurance Fund (HZMO)  will start accepting applications by elderly persons for the right to a national pension as of tomorrow, and about 20,000 beneficiaries who will receive HRK 800 per month are expected next year, Minister Josip Aladrovic said on Monday.

The law on a national allowance for the elderly, which enters into force on 1 January 2021, provides for an income for Croatian citizens over the age of 65 who have not secured an old age income and are not entitled to a pension.

The allowance will be paid by the HZMO  through commercial banks, and first payments will be made in February 2021 for January 2021.

The national allowance for the elderly will cover the most vulnerable part of the population, Labour, Pension System, Family and Social Policy Minister Josip Aladrovic told reporters ahead of a government session.

The estimated cost in the state budget is HRK 132 million, and we have ensured that much for 2021, he said.

It will be possible to submit an application for the national allowance in person at a regional HZMO office, by mail or online through the e-Citizen system.

Aladrovic said that the target group were elderly citizens who did not have enough years of insurance and who were not covered by the social welfare system for some reason.

Those are citizens who have more than 20 years of uninterrupted residence in the Republic of Croatia, fewer than 15 years of pensionable service and who are over 65 years of age, he said.

ZAGREB, November 9, 2020 - A new family pension model, to be introduced in 2022 at the earliest, will enable family members to receive a percentage of their deceased family member's pension and keep their own pension, according to unofficial information carried by the Jutarnji List daily.

According to the current family pension system, 70% of a deceased family member's pension can be inherited, but the new beneficiary, who is mostly the widow, must give up their pension if that is a better option for them, Jutarnji List said in its Monday issue.

Family members, namely widows and widowers, common law partners, life partners and informal life partners, are entitled to a family pension if the union lasted for at least three years and if they reached 50 years of age before the death of their partner, providing that the deceased insured person completed five years of insurance periods or ten years of qualifying periods.

The Croatian Democratic Union and the government made a commitment in their programmes to regulate family pensions in a different, fairer way, and a working group to be tasked with drawing up a bill should be established soon, while the bill should be ready by the end of 2021.

The percentage that a family pension beneficiary will receive is to be determined by the working group, but the request by pensioners' associations for it to be 50% of the inherited pension is not realistic, as it would be too much for the state budget to withstand.

The cheapest version would cost over HRK 1 billion a year, so the government says that the new model could only be introduced once the crisis caused by the coronavirus pandemic is over.

(€1 = HRK 7.5)

ZAGREB, November 6, 2020 - An unfavourable worker to pensioner ratio, longer average life expectancy and low pensions are the main challenges for the Croatian pension system, it was said at an international online conference on the state and prospects of pension reforms.

The conference was organised by the Institute of Public Finance (IJF) and the Friedrich Ebert Foundation, with most opening speeches pointing to the fact that the pension reform carried out close to 20 years ago was a successful example.

At the time, along with the first pension pillar, a second and a third pension insurance pillar were introduced, which individualise pension saving and encourage voluntary saving to a greater extent.

Finance Minister Zdravko Maric said that pensions accounted for the largest portion of budget expenditures, with a share of around 10% in GDP.

Despite the challenges, Croatia has managed to maintain both the second and the third pillar, of which we are proud, and they will be strengthened in the future, said Maric.

The longer life expectancy, owing to development of technology, medicine and science, is good but has certain consequences for the pension system, he noted.

Speaking of the specificities of the Croatian pension system, he pointed to a rather unfavourable worker to pensioner ratio as well as an above-average share of people who have retired early, which, he said, are some of the reasons for further reforms of the pension system.

As many as 34% of elderly at risk of poverty, social exclusion

A senior economic advisor at the European Commission's Representation in Croatia, Judita Cuculic Zupa, recalled that payments into the second pension pillar had amounted to 5% since its establishment, suggesting that the government, as soon as fiscal circumstances allow it, should increase contributions to the second pillar, which are set aside from each insuree's gross wage.

She also noted that Croatia had too few people making payments into the pension system, which is due to a very low employment rate, the third lowest in the EU.

Cuculic Zupa said this was the biggest macroeconomic problem in the country whose resolution required the implementation of many reforms.

She warned that the share of elderly people at risk of poverty and social exclusion in Croatia was 34%, 15 percentage points higher than the EU average and largely due to low pensions.

She noted that one more specificity of the Croatian pension system was a significant share of privileged pensions and pensions granted under special regulations.

Pension funds' assets amount to more than HRK 120 bn

Croatian Financial Services Supervisory Agency (HANFA) director Ante Zigman said that with assets worth HRK 120 billion pension funds could continue providing assistance to the business sector, including in the context of potential privatisation and financial market development.

The head of the UMFO association of companies managing pension funds and pension insurance funds, Petar Vlaic, said that in the last two financial crises in Croatia pension funds had acted as real stabilisers on financial markets.

The importance of the four obligatory pension funds in Croatia is reflected, among other things, in the fact that individually they are the biggest holders of government bonds and they also hold stakes in many Croatian companies, said Vlaic.

He also said that assets held by Croatian pension funds would enable a future with adequate income for pensioners.

ZAGREB, Oct 1, 2020 - Increasing pensions and changing the pension indexation model in relation to the average wage are some of the key topics to be discussed by the National Council for Pensioners and Elderly Persons, which held its first session on Thursday, on the International Day of Older Persons.

Associations of pensioners and the trade union of pensioners  SUH welcome the establishment of the national council as an advisory body to the government, said SUH head, Jasna Petrovic, ahead of the Council's session, held in the building of the Ministry of Labour, Pension System, Family Affairs and Social Policy.

She said that they hoped the council would soon start working on serious issues since 61% of pensioners had pensions below the Croatian poverty threshold.

The council has recently been established through an agreement between the government and pensioners' associations as an advisory body in the area of pension and health insurance, social policy, and the protection of the elderly.

Increasing pensions allowances, changing the model of indexing them to the average wage, and changing the model of family pensions are some of the priorities for the sessions of the national council, said Petrovic.

"Our interest is to establish a kind of social dialogue with pensioners with the aim of improving the pension system, the social welfare system and all systems that deal with the elderly," Minister Josip Aladrovic said.

Although the council is an advisory body, Aladrovic said they wanted its work to result in concrete measures and visible effects.

Sixty-six residents of care homes die from COVID-19

One of the topics will be preventing the spread of the COVID-19 epidemic among elderly persons, and mid-October a campaign will be launched to raise awareness about the spread of the disease among the elderly population.

For this purpose, a committee for preventing and curbing the spread of the COVID-19 epidemic among elderly persons was established on August 24, led by epidemiologist Branko Kolaric.

To date, 66 residents of care homes have died, which 25% of the total number of coronavirus-related deaths.

Kolaric said Croatia had done a very good job compared to other countries where the percentage is between 50 and 70 percent.

He said their goal was for elderly citizens to receive the best possible care during the epidemic.

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