In the search for measures to improve the economic position of retirees, a proposal from the National Council for Retirees and the Elderly has been published, which would allow retirees to be employed full-time while simultaneously receiving half of their pension. The initiative is justified by the need to equalize retirees who have acquired the right to a pension under general pension regulations with military personnel, police, and persons with special powers who have acquired the right to a pension under special law and who can already choose between part-time employment with full pension and full-time employment with half pension.
These are individuals with special powers who had the right to a longer service period, had their retirement age lowered, and acquired the right to a pension at an earlier age compared to general pension regulations.
Current Situation
Currently, pension beneficiaries under the general Pension Insurance Act can be employed up to half of full-time and receive a full pension during that time, without reduction. This right can be exercised by beneficiaries of old-age pensions, pensions for long-term insured persons, early pensions, and disability pensions due to partial incapacity for work.
Beneficiaries of disability pensions due to total loss of work capacity cannot be employed and receive a pension. If they are employed, their pension is suspended, except for pension beneficiaries under the Law on Croatian Veterans, but even they are limited to working less than three and a half hours a day. According to the regulations currently in force, it is not possible to perform crafts while receiving a pension; only home production and secondary occupations are allowed alongside receiving a pension.
Effects of Possible Change
If pension insurance regulations were amended to allow full-time employment with simultaneous payment of half a pension, as proposed, in addition to the current 33 thousand retirees who work part-time while receiving a pension, a new group would emerge – workers entitled to half a pension. What is the change and what are the possible effects?
A worker employed full-time earns all rights from the employment relationship with the employer. They accumulate full insurance service, their working hours are arranged so that they work forty hours a week, they can work overtime up to 180 hours a year, and if determined by a collective agreement, up to 250 hours annually; they have the right to one day of weekly rest, and for each day they work at least six hours, they have the right to a daily break that counts as working time. If they work in occupations or positions where, according to special law, a longer service period is achieved, for every 12 months of work, they have the right to additional months of new pension service, and the employer is obliged to pay an additional contribution for the increased service. Along with a full salary, they would receive half a pension, so it is reasonable to expect that many workers, upon first meeting the conditions for retirement, whether early or old-age, would request a pension. Their employment relationship would not change; they would simply receive half a pension as additional income alongside a salary equal to what it was before retirement. The introduction of the possibility of full-time employment with the payment of half a pension would encourage demands to allow craftsmen to perform crafts while receiving half a pension. As with those who currently work up to half of full-time, employers and pension payers would have to pay attention to the use of personal deductions when paying salaries or pensions. The right to a personal deduction as a non-taxable part of income can be used by a taxpayer earning income from dependent work with multiple payers only with one or can be divided between two or more payers, in the ratio they decide. This data is recorded in the tax card, and each payer is obliged to act according to the data specified in the tax card of the individual when calculating income tax.
