How much can a retiree earn toward retirement?  Important changes as of September 2023 and high penalties!




Author: Simon Starnowski / Murator Group
The maximum penalty is failure to report to the ZUS income that exceeds the applicable limits in a given year, which change quarterly



How much can a retiree earn toward retirement? Although people who have reached retirement age can earn money without any restrictions, even when they already receive a pension from the ZUS, large groups of people using pensions and other benefits have limits on their earnings and the obligation to notify the ZUS of their income. There are high financial penalties for breaking the rules!

Contents

  1. How much can a retiree earn before retiring in September 2023?
  2. Who can earn extra money until retirement without limits?
  3. What earnings will take away or reduce your pension?
  4. Earnings restriction – who else does this apply to?
  5. Pensioner supplementing his pension: how and what should be reported to the ZUS

The most stringent penalty is failure to report to the ZUS income generated in excess of the applicable limits in a given year. They change every three months. A person receiving a pension or other benefit, if he has income and does not report it to ZUS, may be obliged to return benefits to which he was not entitled for three years. If you notify ZUS, you will only request a refund of these benefits for the past year.

How much can a retiree earn before retiring in September 2023?

According to the announcement of the President of the Social Insurance Institution dated August 10, 2023 regarding the income amounts corresponding to 70% and 130% of the declared average monthly wage for the second quarter of 2023 used when reducing or stopping old-age and disability pensions, as of September 1, 2023, the corresponding income amount For the following:

  • 70% of the average monthly salary declared for the second quarter of 2023 is 4,904.10 Polish zlotys;
  • 130% of the average monthly salary announced for the second quarter of 2023 9,107.50 PLN.

The first of the listed amounts is the monthly income limit, which does not cause any consequences. Crossing the second reasons – Suspension of the payment of pensions and similar benefits. Income between these amounts causes ZUS to reduce the benefit accordingly.


Who can earn extra money until retirement without limits?

As a general rule, ZUS will not suspend or reduce a pension – regardless of how much income the pensioner receives – if the pensioner is entitled to a pension and has reached the statutory retirement age.

It is also worth noting that if someone is entitled to an old-age pension and has reached general retirement age (age 60 for women and 65 for men) and is entitled to another pension, for example, a survivor’s pension, he/she is entitled to a more appropriate benefit. The pension is paid in full, regardless of how high a person’s income is.

In addition, ZUS will not suspend or reduce an earning person’s benefit – regardless of how much income he or she earns – if that person:

  • is entitled to a partial pension;
  • He is entitled to receive a war disability pension to reside in camps and isolation places, or a family pension after this disability.
  • He is entitled to a military disability pension in connection with military service or a survivor’s pension for a soldier whose death is related to military service.

What earnings will take away or reduce your pension?

This applies to all profits and income resulting from activities for which social security contributions are mandatory.

The list of these entries is long. The most common are income from full-time work, but also from commissions (agency, services, etc.), from commercial activity, but also, for example, from sickness, maternity and care benefits, and from pay for the period of incapacity for work. Work, including qualification benefits, compensatory allowance, compensatory allowance, compensatory allowance, or even a reward for performing the job of a supervisory board member.

However, there are cases where income is earned and does not give rise to the obligation to pay social security contributions, yet ZUS will withdraw or reduce the pension after exceeding the current limits. This will happen when the retiree:

  • You receive income from additional employment and are excluded from Social Security liability because you receive a pension or disability pension;
  • Performs additional work that you don’t have to pay Social Security contributions for, because you’re already paying Social Security contributions for a different address.

It is also worth noting that when ZUS determines the income on which it depends whether to reduce or suspend the pension, it takes into account the amount on which contributions for pension and disability insurance are calculated (this is the so-called basis of contribution assessment). If the pensioner carries out a non-agricultural activity, ZUS will accept the income that is the basis for calculating social security contributions.


Earnings restrictions – who else does this apply to?

Under the same rules as the standard pension, the ZUS may reduce or suspend certain other benefits.

Persons receiving such penalties from ZUS should take into account the following:

  • the retirement;
  • Bridging the pension;
  • teachers’ compensation benefits;
  • disability pension;
  • Disability pension due to: an accident at work, an accident on the way to or from work before 1 January 2003, or an occupational disease;
  • Military disability pension if your inability to work is not related to military service;
  • Military disability survivor pension, if the disabled person’s death was not related to military service;
  • survivor’s pension.

A pensioner completing his pension: how and what he must notify the ZUS about

If, when applying for a pension or disability pension, a person knows that he will have additional income, he must indicate this in the application.

If he is already retired and has not reached the statutory retirement age, he must notify us as soon as possible about entering gainful employment and about the amount of income. You can use the ZUS EROP form for this.

In addition, every year – by the end of February – the supplementary retiree or pensioner subject to the earnings limitation provisions must submit to the ZUS the income certificate for the previous year. On its basis, ZUS will determine whether it has paid the benefit in the correct amount.

If it turns out that the pensioner received income and did not report it to ZUS, ZUS will demand the return of benefits to which the pensioner was not entitled for the previous three years. If notified, ZUS will only claim back these benefits for the past year.

More details can be found on the ZUS official website.

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