- Voluntary health insurance for self-employed – Significant percentage of self-employed workers in physically demanding professions, do not apply sickness insurance benefits for years. This insurance for them is a pure cost with no benefit. In case of voluntary sickness insurance their disposable income would increase and they could use it in various ways (for example, to purchase critical illness insurance).
- Adjusting of the contribution reduction – Current system allows to lower health contributions for low income workers (while keeping full benefits of health insurance). Switching the reduction mechanism from health to social insurance will increase the amount of actually reduced labor costs at the level of minimum wage income and increase the net income of employees. This change will increase the states fiscal contribution on the low income people. It would contribute to a net reduction of labor costs of the minimum wage earners (totaling -25 EUR) and increase the net income of the employee.
- 200 € exemption of temporary contracts from all contributions – Temporary contracts are special kind of agreement used for seasonal and temporary work. Prior to the introduction of obligatory health and social contributions in 2013 (a step which made seasonal and short term workers much more expensive) more than 80% of the agreements fell below the limit of 200 euros. Most of the contracts therefore served students, pensioners, mothers, and ordinary employees needing an extra income, which should had improved their income situation. Currently, only students have contribution-free temporary contracts (with 200 EUR income ceiling). This should be extended on general population. Exemption for retirees included 1.1.2018.
- Reducing the ceiling assessment basis for contribution calculation to 3 times the average national wage – Three years ago the government increased the contribution burden by extending the maximal bases and thus substantially increased the contribution burden of higher-earning employee groups. In addition to social security contributions, which are united at the rate of 5 times the average wage maximum, ceilings were increased for health insurance contributions, from 3 times to 5 times the average wage. It may not therefore be argued that the consumption of health care increased, for example, benefit from health insurance is limited by a ceiling of 1.5 times the average national wage. Retirement pension can be received a maximum of 2.3 times the average wage, and therefore more than half of the wedge is in the form of tax from which the insured does not obtain any rights to benefits (simply given, the employee pays circa double the insurance for a pension he will get). Such funding is not transparent and hides the true nature of the payments. We propose reducing the ceiling on social and health contribution payments to three times of the average national wage.
- Reduce the rate of employee contributions from 9.4% to 7.4% – One approach to reducing the burden on the work is to regulate rates of individual social insurance funds to a level that allows them to be funded in balance. This removes non-transparent transfers of contributions between the funds (currently, the pension fund within the Social Insurance Agency cannibalizes other funds, like sickness fund) and the government will be forced to admit the real hole in the financing of retirement pensions and finance it transparently from the state budget and not from other social funds. If the rates are reduced only for employees, they would fall from 9.4% to 7.4% and allow the growth of net income of the employee.
- Cancel contributions from non-financial benefits of employees – It is illogical to pay health insurance and social security contributions for a company car or theater tickets, given out as a benefit by company. In addition to overcharging and unnecessary bureaucracy, it also worsens the position of the pension system in the future.
- Cancel health insurance contributions from lotteries and prizes – Paying health contributions from prizes does not fit into the logic of health insurance. Additionally it greatly complicates the joy of wins especially for poorer people. If they win for example a new passenger car, they have to pay taxes and contributions worth thousands of euro in cash, which often forces them to immediately sell the prize or abandon it.
Cancel health insurance contributions of dividends for the individual – Dividend income is a capital gain and as such is only selectively loaded with health insurance contributions, which distorts the optimal structure of financing. Extremely complicated administration carries disproportionate cost to taxpayers at a very low overall gain. Cancelled 1.1.2017.