Social Insurance

Though two Russian laws regulating social insurance promulgated on 23 June, 1912 had remained effective in the pre-war Lithuania – the Law on Provision of Industrial Workers in Case of Disease and the Law on Workers’ Accident Insurance, they could not be applied in Lithuania under the new living conditions without essential changes in their structure (as they were applicable to only large-scale industry). The former Ministry of Labour and Social Security had drafted the Law on Health Insurance in1919. The draft Law was approved, however it was promulgated only on 27 May 1926 (Valstybės Žinios, No. 227) under the title of the Law on Patients’ Funds. For the purposes of management of social insurance matters, the Chief Social Insurance Board was established by a separate law promulgated on 18 May, 1926 (Valstybės Žinios, No. 225). Having completed the preparatory organisational work, the Board established the first 7 patients’ funds in 1928 in the districts with the largest number of the insured. 1931 saw the introduction of compulsory health insurance in the whole territory of independent Lithuania. A number of difficulties arose at the beginning of implementation of the first enacted Law on Patients’ Funds, especially in the area of funds administration, insurance, amount of the tax, medical aid, and others. A number of amendments and supplements were made to the Law, and 23 January, 1934 (Valstybės Žinios, No. 434) saw the promulgation of a completely changed Law on Patients’ Funds.

The Senior Social Insurance Fund Board established and supervised the activities of patients’ funds. It consisted of two representatives from the Ministry of Internal Affairs, and two representatives from both employers and the insured (6 members in total). The Board drafted the statute for the patients’ funds, approved and changed their annual estimates, allowed the patients’ funds to purchase real estate, settled various disputes between the Board of the patients’ fund and the insured, punished employers for violations of the Law on Patients’ Funds, and in general supervised the administration and operation of patients’ funds. In case of failure of the Board or Council of patients’ funds to manage their affairs or fulfil the responsibilities assigned to them by the Law or statute, such Board or Council could be dissolved. In this case the rights of the Board and the Council would be exercised by the appointed manager of a patients’ fund. All employees were subject to compulsory insurance in patients’ funds. The Law provided for a possibility of insurance to people under 50, those having no disability, chronic or terminal diseases. The means of patients’ funds were formed from equal contributions of the insured and the insurers as well as extra payments from the state budget meant for maternity benefits to the members of patients’ funds.

The tax was set by means of a certain table and amounted to 5-50% of the salary of the insured. In case of illness, the members of the funds and their families were entitled to receiving all medical aid, medicine, treatment measures, and a monetary benefit (from half to full salary); parturient women were given medical aid and maternity benefits. In general, the function of patients’ funds provided for by this Law included not only treatment of and support to the sick, but also for care of mothers and their health. Patients’ funds would pay death benefits, provide first aid in case of an accident, and take care of the elderly and the disabled in the event they were family members of the insured. A patients’ fund’s Board, Council and Audit Commission as well as the Conciliatory Commission used to be elected for the purposes of management of the patients’ fund. The Council consisted of 10 representatives of the members of the patients’ fund and 10 representatives of employers elected for a 4-year period as prescribed by the statute. The Board consisted of 4 representatives elected by the Council – two from the insured and two from employers, and a representative of the authorities used to be appointed as a fifth member of the Board. Not more than 12% of the annual revenue of patients’ fund could be spent on its administrative matters. Only the State Control and labour inspectors were entitled to auditing a patients’ fund.

10 county patients’ funds in the whole territory of Lithuania were administered under this Law. 60,777 members of the patients’ funds and 46,786 family members were insured as of 1 October 1937. In 1937, the revenue estimates of the patients’ funds amounted to LTL 5,127,928. During a considerably short period of time, patients’ funds conducted a considerable amount of work: several child detention centres, sanatoriums, private houses were constructed with the resources of the patients’ funds; in the private houses, various treatment institutions with modern treatment measures of the time were established. The patients’ funds published a periodical Sveikata ir Darbas (The Health and Work) on social insurance issues.

Apart from these patients’ funds administered by the general Law, Lithuania also had patients’ funds of other types regulated by separate laws and statutes: 1) the Patients’ Fund of the Ministry of Transport, having 5,701 insured persons; 2) the Patients’ Fund of Free-lance Foresters of the Ministry of Agriculture, having 1,555 members; 3) the Patients’ Fund of the Bank of Lithuania, having 536 members; 4) the Patients’ Fund of Kaunas Power Station, having 208 members, and 5) the Patients’ Fund of St. Zita Servants’ Association, having 508 members.

30 January, 1936 saw the promulgation of the Law on Accident Insurance (Valstybės Žinios, No. 531), which came into force on 1 January, 1937.

Accident insurance was compulsory in factories, other industrial enterprises similar to factories, and for the employees working in the areas of forest maintenance and rafting, construction, railway, in ports and harbours, road building and waterways, telegraph, telephone and radio, street management, water supply, and sewage. People who suffered injury during an accident received complete medical aid and a monetary benefit equalling 2/3 of their actual salary till they regained their working capacity or till they were eligible to a pension. Medical treatment was provided via local patients’ funds. The amounts of the pensions were as follows: for those who had lost 100% of their working capacity –3/4 of their annual salary; for those who had lost less than 100% of their working capacity – an amount proportional to the lost working capacity. Those who had lost 70% of their working capacity or more received a “child benefit” for every child, i.e. 10% of the amount of the pension. If the accident caused the death of the insured, pensions were paid to his family members: 1/3 of the annual salary of the diseased to the wife, 1/5 of the annual salary to children under 15, and 1/6 of the annual salary to parents and other relatives supported by the insured. Insurance means were formed from the main and additional tax paid by employers only. The main tax depended on the group of occupational hazard, of which there were 16. A tax was set for every group and was deducted from employees’ salaries. The range of the amount of the tax was from 0.6 % (group 1) to 6% (group 16). If the main tax was not sufficient for forming the pensions capital, an additional tax was imposed on employers amounting to not more than 50% of the main tax. Employers paid insurance taxes via local patients’ funds. An Accident Insurance Fund was established for the purposes of implementation of this insurance managed by the Board. In 1937, the Fund’s revenue amounted to LTL 1,430,000, and in 1938 – to approximately LTL 1,689,000. At the beginning of 1937, the number of the insured of the Fund amounted to 60,120.

Social insurance of the Klaipėda region is also noteworthy. It was managed by the so-called Klaipėda Region Insurance Agency in accordance with the social insurance provisions inherited from the Germans. Agricultural workers’ health, disability, and accident insurance was compulsory in Klaipėda region. On 1 October, 1937, this institution had 33,623 of the insured.  

Last updated: 17-01-2024