State social insurance system

The key goal of the social insurance system is to guarantee income of the insured in cases of incapacity for work due to disease, maternity, old-age, disability, etc. as provided for in the Law on State Social Insurance. The social insurance system is based on the pay-as-you-go principle. From 1 January 2004, the accrual of a portion of social insurance contribution was allowed serving as a basis for the funded pension scheme.

From 1991, the financial framework of the state social insurance system is an independent and separate state social insurance fund budget. The major source of income of the state social insurance fund budget is state social insurance contributions paid by the insurers and the insured. They account for over 90 % of all income. The remaining part is comprised of the operational income of the State Social Insurance Fund Board (delay interest, fines, etc.), allocations from the state budget and contributions paid under voluntary insurance agreements. The Law on State Social Insurance also provides for the possibility to use appropriations from the national budget to the state social insurance fund budget if the expenditure from the state social insurance fund budget exceeds its income because of the decisions adopted by the Seimas or the Government.

As in many other countries, Lithuania has the following traditional types of social insurance: for pensions, sickness, maternity, health, unemployment, accidents at work and occupational diseases.

Last updated: 02-01-2019