Regulations Regarding the Minimum and Maximum Amount of the Object of Mandatory and Voluntary Contributions of State Social Insurance

Issued pursuant to
Section 14, Paragraphs two, five and six of
the Law On State Social Insurance and
Section 9, Paragraph five of the Micro-enterprise Tax Law

1. The Regulation prescribes the minimum and maximum amount of the object of mandatory contributions and the object of voluntary contributions (hereinafter together - object of contributions) of State social insurance and the procedures for determination thereof.

2. The minimum annual amount of the object of contributions for a self-employed person and a voluntarily insured person shall be 12 minimum monthly wages stipulated by the Cabinet.

3. For a self-employed person and a voluntarily insured person who have had the status of a self-employed person and a voluntarily insured person accordingly for less than a year the minimum amount of the object of contributions shall be determined in proportion to the number of months, in which the person had had the status of a self-employed person and a voluntarily insured person accordingly in the calendar year.

4. Paragraphs 2 and 3 of this Regulation in relation to the minimum amount of the object of contributions shall not be applied to employees of a micro-enterprise who have voluntarily joined social insurance.

5. The maximum amount of the object of contributions shall be EUR 46 400 per year.

6. If a person has had several statuses of an insured person (the status of a mandatorily insured person, the status of a voluntarily insured person, the status of an employee of a micro-enterprise) during a calendar year, the maximum amount of the object of contributions in all statuses together shall not exceed the maximum amount of the object of contributions laid down for the current year.

7. The Ministry of Welfare shall calculate the maximum amount of the object of contributions for each calendar year. The maximum amount of the object of contributions shall be calculated, applying the index of changes in the monthly average gross work remuneration (in actual prices) (hereinafter - work remuneration) of persons employed in the national economy to the maximum amount of the object of contributions of the previous calendar year.

8. The index of changes in the work remuneration referred to in Paragraph 7 of this Regulation shall be calculated, taking into account the increase or reduction of work remuneration anticipated by the Ministry of Finance for the subsequent calendar year. If the actual increase or reduction of work remuneration of the previous calendar year is higher or lower than anticipated, in calculating the index of changes in the work remuneration the difference between the increase of reduction of work remuneration shall be taken into account, using the following formula:

D_(t+1)progn = (t_m(t+1)progn + (t_m(t)fakt - t_m(t)progn))) +1, where

D_(t+1)progn - the index of changes in the work remuneration;

t_m(t+1)progn - the increase or reduction of work remuneration anticipated by the Ministry of Finance for the subsequent calendar year;

t_m(t)fakt - the actual increase or reduction of work remuneration of the previous calendar year;

t_m(t)progn - the increase of work remuneration anticipated by the Ministry of Finance for the previous calendar year.

9. If in accordance with Paragraph 8 of this Regulation the calculated index of changes in the work remuneration is higher or lower than 1, the maximum amount of the object of contributions for the subsequent calendar year shall be calculated, using the following formula:

I_max(t+1) = I_max(t) x D_(t+1)progn, where

I_max(t+1) - the maximum amount of the object of contributions for the subsequent calendar year;

I_max(t) - the maximum amount of the object of contributions for the previous calendar year;

D_(t+1)progn - the calculated index of changes in the work remuneration.

10. The calculated maximum amount of the object of contributions shall be expressed in euros and rounded up to whole hundred euros.

11. The maximum amount of the object of contributions for 2014 is determined, applying the indices of changes in the work remuneration (in actual prices) for 2009-2014, which have been calculated on the basis of the information of the Ministry of Finance on the actual and anticipated increase in the work remuneration in the relevant years and expressed in euros, rounding up to whole hundred euros.

12. Cabinet Regulation No. 992 of 2 December 2008, Regulations Regarding the Minimum Amount of the Object of Mandatory Contributions of State Social Insurance and the Procedures for Determination Thereof for a Self-employed person (Latvijas Vēstnesis, 2008, No. 190), is repealed.

13. This Regulation shall come into force on 1 January 2014.

Prime Minister Valdis Dombrovskis

Minister for Welfare Ilze Viņķele

Translation © 2014 Valsts valodas centrs (State Language Centre)