In the Federation of Bosnia and Herzegovina, if you are engaged under a work contract, even though the employer pays six percent for you monthly for contributions to pension and disability insurance and four percent for health, you do not get any seniority, nor can you be treated on that basis.
We asked the Federal Ministry of Finance to clarify who benefits from these contributions if there is no engaged person, where the money from the contributions goes.
The difference between a work contract and an employment contract
– Income based on a concluded work contract has the character of taxable income from other types of independent activity and occasional non-independent work, to which contributions are paid: for pension and disability insurance (based on six percent) and contribution for health insurance (based on four percent), and the engagement of a person under this contract is based on the Law on Obligations, which states that the contract obligates the contractor to perform certain work, such as making or repairing something or performing some physical or intellectual work etc., and the client undertakes to pay him a fee for that.
The main difference between an employment contract and an employment contract is that, in contrast to an employment contract, the aforementioned contract engages a person to perform some specific work (such as making or repairing something or performing some physical or intellectual work) and that it does not represent a job for which an employment contract is concluded for a fixed or indefinite period of time, as well as the fact that it is concluded for a shorter period of time. We state this for the reason that in practice it often happens that, in order to avoid payment of prescribed obligations, work contracts are concluded instead of work contracts, which is one of the causes of the gray economy – they state for Faktor from the Ministry and add:
– Please note that, in accordance with the Law on Pension and Disability Insurance, a person engaged on the basis of a work contract can exercise rights based on the paid contributions for pension and disability insurance only if contributions have been paid for it (at the same rates) as for the insured employee.
Financing the treatment of your country, expensive medicines…
The Health Insurance Institute of the Canton of Sarajevo explains that the money that is paid on the basis of the health service contract has the character of a fiscal-solidarity contribution, the purpose of which is to finance health programs and needs of interest to the Federation of Bosnia and Herzegovina as a whole (such as treatment abroad, procurement of expensive drugs, therapy for rare diseases, etc.), and not individual realization of the right to health care.
The Federal Institute for Pension and Disability Insurance says that if full contributions were paid to employment contracts, this could be counted in seniority. However, since this is not the case, the persons hired under the employment contract do not benefit.
In the Federal Ministry of Finance, they state that this issue was treated through the drafting of a new legal solution in the field of contributions in such a way as to prescribe the same contribution rates for pension and disability insurance on the incomes of persons who earn on the basis of concluded employment contracts as well as on the salaries of persons on the basis of concluded employment contracts, so that they can realize rights from pension and disability insurance, it says Factor.
