Contributions to the Guaranteed Receivables of Workers and Employees (GRWE) Fund

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The Act for Guaranteed Receivables of Workers and Employees in Case of Insolvency of the Employer guarantees up to a certain amount the rights of workers and employees to receive employment-related remunerations and benefits, accrued to them but unpaid until the declaring of the employer insolvent. Liable under the Act shall be the employers against whom an insolvency procedure may be initiated, and entitled individuals pursuant to the Act shall be their workers and employees.

The guaranteed receivables shall be the accrued and unpaid:

  • employment remunerations;
  • cash benefits.

The right of guaranteed receivable shall arise as of the date of promulgation in the State Gazette of the court decision for:

  •  initiation of an insolvency procedure;
  • initiation of an insolvency procedure with simultaneous declaring of insolvency;
  • initiation of an insolvency procedure, ordering the termination of the company’s operations, declaring the debtor insolvent, and termination of the insolvency procedure due to insufficiency of the property for covering the expenses for the procedure.

The right to use a guaranteed receivable shall arise when a legal employment relationship:

  • has not been terminated as at the date of promulgation of the decision declaring the insolvency;
  •  has been terminated during the last three months prior to the date of declaring the insolvency.

No guaranteed receivables shall be paid to:

  • partners in companies;
  • members of the trader’s management and supervisory bodies;
  • spouses and lineal relatives of the trader – individual, or of the persons enumerated hereinabove.

The employers shall be obligated to declare once and by names before the relevant competent Territorial Directorate of the National Revenue Agency the workers and employees possessing the listed characteristics, upon signing of the employment contracts with them or at the time of arising or changing the relevant characteristics.

IMPORTANT!: Pursuant to Art.15, Para.1 of the State Social Security Budget Act for the year 2013 no contributions shall be maid to the Guaranteed Receivables of Workers and Employees Fund.

In case that during 2013 employers make contributions to the fund for previous years, these shall be transferred to the respective account of the competent TD of NRA, with code for type of payment  11 11 11.

Type and amount of the contribution:

Employers shall deposit the mandatory monthly contributions to the Fund for the workers or employees working for them under employment relationship, with the exception of the persons listed hereinabove whilst they possess the relevant characteristics.

Income for which the contribution is due:

The contributions shall be calculated based on the amount of the guaranteed receivables under Art.22 and 23 of the Act. For the year 2013 the maximum amount of the guaranteed receivables as per Art.22, Para.2 and Art.23, Para.2 of Act for Guaranteed Receivables of Workers and Employees in Case of Insolvency of the Employer shall be BGN 1,000.

The contributions to the Fund shall be due for the paid, including the accrued and unpaid, gross employment remunerations, or the unaccrued monthly remunerations, but not for more than the maximum monthly amount of the insurable earnings stipulated by the State Social Security Budget Act, and shall be entirely at the expense of the employers.

The contributions to the Guaranteed Receivables of Workers and Employees Fund shall be paid simultaneously with the contributions for the state social security.

Pursuant to Art. 5, Para. 4 of the Social Security Code employers shall regularly submit to NRA  declarations with data about the persons for whom contributions to the GRWE Fund are due. the data about the received including the accrued but unpaid gross work remunerations, as well as about the amount of the contributions due to the GRWE Fund, shall be submitted within the deadlines and as per the procedure stipulated in Ordinance Н-8/29.12.2005.

Control

The control over the payment of the contributions to the Fund shall be carried out by the bodies of the National Revenue Agency.

The control over the disbursement of the guaranteed receivables shall be carried out by the control bodies of the National Social Security Institute.

The contributions due but not paid shall be collected in pursuant to the procedure of the Tax and Social Security Procedure Code, applying the rules for assessment and collection of mandatory social security contributions.

Administrative and penal liability:

An employer or an official who does not fulfill their obligations under this Act or the legislative acts for its implementation shall be penalized with a fine from BGN 100 to 2,000 for each separate case.

  • The violations shall be established by means of official statements drawn up by the control bodies of the National Social Security Institute or by the revenue bodies of the National Revenue Agency in conformity with their powers.
  • The penal decrees shall be issued by the Head of the Territorial Division of the National Social Security Institute or by an official duly authorized by him, or by the revenue bodies of the National Revenue Agency in conformity with their powers.
  •  The establishment of the violations, the issuing, appealing and execution of the penal decrees shall be carried out in accordance with the procedure established by the Administrative Violations and Penalties Act.
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