Remission of claims in respect of social security contributions

  • Katarzyna Michalik
  • 16 March 2021
  • Covid-19

The Covid-19 epidemic has radically remodelled local markets, eliminating some Polish entrepreneurs from them.

Financial website Money.pl, citing a Caface report, published information in January that clearly shows the scale of the reduction of economic activity affected by the two lockdowns introduced by the government last year. Money.pl concludes that in 2020, the number of bankruptcies and restructurings of Polish companies amounted to 1,243, 22% more than a year earlier (according to data as of the end of December 2019), and the Polish economy contracted by 3.4%. Although forecasts for 2021 look much better, the next wave of insolvencies and the associated prospect of another lockdown may contribute to the continuation of the unfavourable trend for business.

Therefore, there is a real risk that some entrepreneurs, who will continue to face the impossibility of conducting business and will incur costs related to maintenance of employees and public law benefits, will join the ranks of the insolvent entities. For this reason, it is worthwhile not only to apply for various forms of support for entrepreneurs proposed by the government but also to use those generally available under the existing legislation.

One of them is the possibility to write off social insurance contributions, dedicated to entrepreneurs in an extremely difficult situation. An entrepreneur may apply for a waiver of contributions when the Social Insurance Institution (ZUS) has stated that the liabilities are completely uncollectible or the debtor is not able to pay the liabilities due to his/her financial standing and family situation, as this would entail too severe consequences for the obligor and his/her family, in particular in the case

when the payment of the dues would deprive the obligee and his family of the possibility of satisfying the necessary needs of life;
the material losses suffered as a result of a natural disaster or another exceptional occurrence would make the payment of contributions unbearable
a chronic illness of the obliged person or the necessity to take care of a chronically ill family member deprives the obliged person of the possibility to earn an income allowing for the payment of the dues.

However, it should be borne in mind that the submission of an application for remission of dues does not constitute a guarantee of their remission, nor does it constitute the basis for suspending pending enforcement proceedings. Neither does the application stop the accrual of interest for delay in the payment of contributions.

Who can apply for a waiver of contributions

Redemption of ZUS dues takes place at the request of the entity applying for this form of support. A person may apply for a remission of contributions:

a payer of contributions and a former payer of contributions (e.g. an entrepreneur),
a person to whom liability for liabilities due to unpaid contributions has been transferred (e.g. an heir, partner, or legal successor),
a spouse who is liable from the joint property for the debts of their spouse,
the debtor’s representative.

Application for remission of liabilities

The application form for cancellation of Social Security debts has been made available on the website of the Social Insurance Institution. The application should contain the following data:

  • identification data or data of the person on whose behalf the application is submitted: name and surname/name, identifier (NIP, PESEL), telephone, correspondence address,
  • the dues for which redemption is requested – their amount and the period for which they should be paid,
  • reasons for discontinuing payment of contributions,
  • the justification why the applicant is unable to pay,
  • type of public aid applied for – if the applicant is still an entrepreneur (even after the suspension of activity).

The application shall bear a personal signature or the signature of an attorney and shall be accompanied by documents

  • confirming that the applicant cannot even partially repay the debt,
  • demonstrating financial standing and ability to pay,
  • proof of health or the need to care for a sick family member, if the applicant applies for remission on these grounds,
  • concerning public aid,
  • original or officially certified copy of power of attorney (if the application is submitted by a proxy).

An entrepreneur may also use the assistance of relief and write-off advisors available at all ZUS branches in preparing a request for the write-off of debts (https://www.zus.pl/firmy/ulgi/umorzenia/doradca-w-sprawie-ulg-i-umorzen)

Contributions subject to remission

Not all overdue contributions can be written off by ZUS. In the case of entities employing employees, the contributions that are subject to remission due to their uncollectibility are those for the person running the business and the part of the contributions for the employed employees (financed by the payer of the contributions). However, in the case of debts subject to remission due to difficult financial situation, the applicant will have to pay the contributions for employed employees both in the part-financed by the employee and the payer of contributions – only the debts due for contributions for the person running the business will be remitted.

Decision of ZUS (The Social Insurance Institution)

Once the application is received by ZUS, it is analysed to ensure that the statutory prerequisites for the remission of dues are met.

According to statistics presented by ZUS, in 2019 it issued 685 decisions to write off dues for contributions. The cases positively reviewed by ZUS accounted for 12% of all cases of write-off of receivables. In 2020, 343 decisions were issued to write off dues. They accounted for 6% of all cases on write-off of receivables.

After considering an application for the cancellation of receivables due to social insurance contributions, ZUS issues a decision on cancellation or refusal to cancel the receivables. In the case of receiving a refusal from ZUS to write off an application for the write-off of dues, an entrepreneur may apply for reconsideration of the case by the President of ZUS or lodge a complaint to the Voivodship Administrative Court.

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