Access to Social Protection by Immigrants, Emigrants and Resident Nationals in Serbia

Abstract

Turbulent political events of the 1990s marked by the Yugoslav wars, protracted transition from socialism to capitalism, and unstable economic outlook since 2000, have contributed to the preservation of a Serbian welfare system focused on ‘old social risks’, also marked by an exclusionary social protection model that limits access to some benefits to migrants – both foreigners in Serbia and Serbians abroad. Access to most social protection benefits for foreigners residing and working in Serbia depends on the same criteria and requirements as those applied for resident nationals. As the Serbian welfare regime is based on the social insurance model, the entitlement for most social benefits in cash or in kind is based on the employment period and/or payment of compulsory social insurance contributions. However, foreigners remain excluded from accessing non-contributory benefits such as the parental benefits, child allowances or the guaranteed minimum resource scheme. Non-resident nationals have access to social benefits depending on whether the country they reside in has signed social security agreements with Serbia, but range of benefits varies depending on the country.

18.1 Overview of the Welfare System and Main Migration Features in Serbia

18.1.1 Main Characteristics of the National Social Security System

Similar to the other former socialist countries from the South Eastern European region, Serbia’s welfare policy development at the beginning of the twenty-first century was characterized by a reform delay. Due to the protracted transition from socialism to capitalism disturbed by severe economic crisis and affected by the Yugoslav wars in the 1990s, the country started the so-called ‘de-blocked’ transformation of its welfare state only in 2000 (Perišić 2016). Since then, the efforts to reform the national welfare state have been relatively unsuccessful, mainly due to the country’s unstable economic outlook. Consequently, the national welfare system is characterized by the focus on the old rather than the new social risks. Today, welfare provision in Serbia is one of the public sectors facing fundamental demographic and economic challenges and a sector that is, to a large extent, shaped by economic decisions (Perišić and Vidojević 2015).

The national social security system is based on the social insurance model and financed mainly by social insurance contributions and, to a lesser extent, the general state budget via taxes. The entitlement for most social benefits is based on employment period and/or payment of compulsory insurance contributions. More specifically, unemployment, health benefits and pensions are based on the payment of insurance contributions. Some family benefits are based on employment, whereas others depend on citizenship and residence. The guaranteed minimum resources scheme is conditioned solely by citizenship and residence.

As most social benefits are contributory, foreigners residing and working in Serbia have access to these benefits under the same eligibility conditions as Serbian nationals. There are, however, certain exceptions. One of them is in the area of guaranteed minimum resources, which is a non-contributory scheme available only for national citizens. Another exception are parental benefits. To qualify for the benefit, the parent must be a citizen and resident of Serbia. Foreigners are also excluded as potential beneficiaries of child benefits as the later are means-tested and require the child to be a Serbian national residing in Serbia. However, certain categories of foreigners, such as those coming from countries that have a bilateral social security agreement with Serbia, can benefit from a differential treatment in terms of accessing social protection in Serbia.

As most social benefits are linked to employment and/or previous contributions, Serbian citizens residing abroad are generally excluded as potential beneficiaries and there are very limited possibilities of exporting these benefits when deciding to permanently reside abroad. The only exception are pensions. If during the period spent working abroad, Serbian citizens are not compulsory insured with the foreign insurance authority, or if they cannot use their rights outside of the territory of the state they work in, they can join the Serbian pension insurance scheme. At the same time, Serbians living abroad in one of the three countries that represent the 3 largest destinations for Serbian citizens (Germany, Austria and Switzerland) are able to receive some social benefits based on bilateral social security agreements between Serbia and these countries.

18.1.2 Migration History and Key Policy Developments

The evolution of Serbia’s migration trends can be better understood in light of the country’s political and historical development. From 1945 until 1992, Serbia was a communist state and one of the six republics of the Socialist Federal Republic of Yugoslavia. After Yugoslavia’s breakup, from 1992 to 2006, the country was first in federation and then in union with Montenegro. In 2006, Serbia became an independent state. These changes in the statehood status and other events such as the Yugoslavia’s civil war (1991–2001) and the NATO bombing (1999) had a strong impact on the political and socio-economic situation in the country and a significant influence on migration flows. In fact, most migration flows have been largely motivated by economic (labour) and/or political reasons (Fassman and Munz 1994; Pavlov 2009).

According to the Ministry of Foreign Affairs,¹ in 2018 there are around 4.5 million Serbian citizens living abroad, compared to 7 million individuals residing in Serbia. At the same time, in 2017, there were around 500.000 foreigners living in Serbia, coming mainly from former Yugoslavia republics.² The three countries with the largest number of Serbian nationals are Germany, Austria and Switzerland. At the same time, the three largest groups of foreigners residing in Serbia come from former Yugoslavia republics – Bosnia and Herzegovina, Croatia and Montenegro. Currently, Serbia has bilateral social security agreements signed with all these six countries. These agreements are based on the principle of equal treatment and the general condition that foreigners residing in Serbia must be legally entitled to these benefits in their home countries in order to receive them in Serbia. The agreements also allow for the aggregation of insurance periods between the two countries, as in the case of pensions.

Generally speaking, Serbian social protection policies toward migrants can be explained by the structure of the country’s welfare system based on social insurance contributions. Since employment is the basis of most benefits entitlement, they are granted to foreigners living and working in Serbia, while Serbians abroad have access to these benefits only depending on social security agreements between Serbia and the respective country. More substantially, however, the very limited access to non-contributory benefits for both foreigners in Serbia and Serbians abroad can be explained by different reasons. For foreigners, by the exclusionary principle according to which certain benefits are granted only to resident Serbian citizens. For Serbians abroad, by the elites’ perception of diaspora as mainly an economic resource, and as a supplement to the country’s social-safety net, rather than its beneficiary.

To this date, no recent Serbian government has put forward a pro-active policy towards the integration of immigrants or the Serbian diaspora into the country’s social protection system. The only move in this direction, regarding immigrants, was the adoption of the 2014 Law on Employment of Foreigners,³ which stipulates that foreigners employed in Serbia have equal rights and obligations with respect to work, employment and self-employment as Serbian nationals (Article 4). However, the law also introduces the possibility of limiting the number of non-national employees in Serbia, depending on situation on the Serbian labor market.⁴

18.2 Migration and Social Protection in Serbia

As explained above, both citizens of Serbia and foreigners residing in Serbia gain access to most social protection benefits based on employment and/or previous contribution period, but access to some benefits is dependent on both citizenship and residence. In 2018, contributions for pension (and invalidity) insurance amount to 26% of the salary, 10.3% for healthcare (including benefits in kind, sickness cash benefits and invalidity cash benefits), and 1.5% of the salary for unemployment insurance.⁵ For healthcare, insurance contributions cover workers and their families, while contributions of specific social groups independently of their employment status (such as pregnant women, children, or blood donors) are covered by the state (taxes). Family benefits (including maternity, paternity, parental and child benefits) are non-contributory, but eligibility to some of these benefits still depends on previous employment (maternity and paternity benefits). Pensions and unemployment benefits depend on periods of previous employment and contributions. The social protection benefits that are non-contributory are those provided under the guaranteed minimum resources scheme (financial social assistance) and two types of family benefits (parental and child allowance). As mentioned above, these last three types of benefits are also granted exclusively to resident citizens, since both citizenship and residence represent key eligibility criteria.

Currently, Serbia is a member in 14 regional integration organisations,⁶ but none of them provides for social security coordination, nor they facilitate in any way the access to social benefits for community migrants.

18.2.1 Unemployment

The unemployment insurance (osiguranje u slučaju nezaposlenosti) for both national citizens and foreign residents is regulated by the Labour Law,⁷ the Law on Employment and on Unemployment Insurance,⁸ and the Law on Employment of Foreigners. The institution in charge of these benefits is the National Employment Service (Nacionalna Služba za Zapošljavanje – NSZ).

Unemployment benefits are financed by the social insurance scheme, which includes compulsory contributions set at 1.5% of workers’ wages (of which employers pay 0.75% and employees 0.75%). Resident nationals and foreigners who are employed or self-employed are eligible for unemployment benefits if they have previously been insured for at least 12 months continuously or discontinuously for at least 18 months. Prior residence in Serbia is not an eligibility requirement. To receive unemployment insurance benefits, nationals and foreigners must be registered as unemployed/job seekers, available for work, and prove regular job search.

Individuals are obliged to claim the benefit within 30 days since s/he stopped paying unemployment insurance. Claimants must wait around 2 months for the approval of the benefits, after which they receive the first payment ‘retroactively’ (thus covering the whole period since the individual submitted the claim). The amount received depends on previous earnings and duration of employment. The maximum duration depends on insurance periods.⁹ Those who need two more years until reaching the retirement age can receive the unemployment benefits for up to 2 years. While receiving unemployment benefits, individuals can temporarily leave the country as long as they fulfil their obligations towards the NSZ (including presence at the NSZ every 30 days, and response to NSZ’s calls, job offers, and participation in activation programs and trainings). While the law does not actually stipulate sanctions, if the individual does not fulfil these obligations, s/he is excluded from the national unemployment register, this leading to the temporary suspension of the benefit. Those who receive unemployment benefits in Serbia can export them when deciding to move abroad only if the country to which they have moved has a bilateral social security agreement with Serbia covering unemployment benefits.

After the unemployment insurance benefit comes to an end, there is no separate unemployment assistance.

18.2.2 Health Care

The access to health benefits in cash and kind and invalidity benefits is regulated by several pieces of legislation.¹⁰ Resident nationals and foreigners can access these benefits based on the compulsory social insurance scheme financed mainly by contributions and, to a much lesser extent, by taxation. Contributions for social health insurance amount to 10.3% of workers’ wages. The institution in charge of administrating these contributions is the National Health Insurance Fund (Zavod za Zdravstveno Osiguranje). The health insurance contributions for unemployed persons are covered by the state through taxation.

Both employed and self-employed individuals are covered by the social healthcare insurance for benefits in kind. Foreign or national residents who are not compulsory insured (for example, students over 26 years old) can join the social security scheme voluntarily to get access to the healthcare system. The national health insurance funds decide the level of voluntary monthly contribution to the healthcare insurance. In 2018, this contribution amounted to 2374 Serbian Dinars (around 20 euros).¹¹ Resident nationals and foreigners who are voluntarily insured receive the same health benefits in kind compared to those compulsory insured. There is no specific requirement of a minimum period of insurance or prior residence in the country to become eligible for benefits in kind. Dependant family members of employees are also granted access to health services.

The National Health Insurance Fund covers a large part of the healthcare costs directly to the healthcare facility or provider. There are also small flat payments for specific services that apply to both national and foreign residents entitled to healthcare. For inpatient care, patients pay a fee of 50 Serbian Dinars (around 50 cents) for a day spent in hospital. To claim benefits in kind, individuals have to submit a copy of their identity card, a copy of the work contract and (only for foreigners working in Serbia) a copy of the work permit.

Nationals and foreigners residing in Serbia who are employed or self-employed can also claim cash benefits in case of sickness. These benefits do not depend on a minimum period of prior residence in Serbia, but there is a requirement of a minimum period of insurance, which differs depending on the type of sickness. For sickness not related to work, the person has to be insured for at least 3 months or 6 months with interruptions over the last 18 months. There is no minimum insurance period required for employment injury or occupational diseases. Resident nationals or foreigners who are not compulsory insured cannot join the social insurance scheme voluntarily to become eligible for sickness benefits.

The access to these benefits is conditioned by a medical certificate proving that the claimant is incapacitated (for a period of sickness of less than 30 days) or a certificate from a specialist committee (for periods longer than 30 days). There is also an obligatory monthly examination by a specialist committee. The level of sickness benefits depends on earnings, although the amount cannot be lower than the minimum salary nor exceed 65% of the highest contribution base. The employer pays the sickness benefits of the employee for the first 30 days (although this is not a salary), but after this period, the benefits are paid by the National Health Insurance Fund. After 6 months of receiving sickness benefits, individuals are assessed for work incapacity by a committee of specialists. If considered capable of work, they return to work. In the opposite case, they become eligible for invalidity benefits. Those who receive sickness benefits can leave the country temporarily as long as they respond to potential requests for medical examination required by their employers.

In Serbia, invalidity is defined as a complete loss of the ability to work due to health conditions which cannot be reversed by medical treatment or rehabilitation. The invalidity pension is granted to both employed and self-employed. Those who are not compulsory insured can join the scheme voluntarily by paying invalidity (and pension) insurance. The minimum period of insurance required depends on the type of invalidity. For work-related invalidity, there is no minimum qualifying period, but for invalidity unrelated to work, the minimum insurance period ranks from 1 year (for those up to 20 years of age) to 5 years (for individuals over 30 years of age). Invalidity benefits do not require a minimum period of prior residence in Serbia. These benefits depend on earnings, the period of insurance, gender, age, working place risks and causes of invalidity (work-related or not). Those who receive invalidity benefits are periodically re-examined. They can temporary leave the country if they remain available for medical checks during the first 3 years since the invalidity was certified. They can also export the benefit if they permanently move abroad. However, this is possible only for Serbian nationals who move to a country with which Serbia has a social security agreement covering invalidity benefits.

18.2.3 Pensions

The access to old-age pensions (pension insurance (penzijsko osiguranje) and pension (penzija)) is regulated by the Law on Pension and Invalidity Insurance,¹² the Law on Compulsory Social Insurance Contributions¹³ and the Law on the Budget System.¹⁴ Pensions are regulated according to the pay-as-you-go model. There is no special scheme of a public non-contributory pension. However, individuals who have never worked or do not meet the minimum number of contribution years for accessing an old-age contributory pension, can still apply for the financial social assistance scheme.

Both employees and self-employed are eligible for contributory pensions, independently of their nationality. Those who are not compulsory insured can voluntarily pay their pension insurance. The minimum standard retirement age in 2018 was 65 years for men and 62 years for women. Individuals can claim an old-age pension after at least 15 years of contribution. Periods completed in countries with which Serbia has a social security agreement that covers pensions are aggregated with the period completed in Serbia, for both national citizens and foreign residents. Serbian citizen who work abroad and are not compulsory insured with the foreign insurance authority, or not able to use their rights outside of the territory of that state, can join the Serbian pension insurance scheme. The access to an old-age pension is not conditioned by a minimum period of residence and there is the possibility of back purchase of the insurance period (only for periods in which the individual was insured, but no insurance contribution was actually paid). The pension is dependent on previous earnings over the entire working period and the average wage in Serbia for each year of working period. Exportability of pensions is possible only for individuals who move to a country with which Serbia has signed a bilateral social security agreement covering pensions.

18.2.4 Family Benefits

Access to family benefits is regulated by the Law on Financial Help for Family with Children,¹⁵ the Law on Healthcare Insurance,¹⁶ the Law on Family,¹⁷ the Law on Labour and the Law on Social Protection.¹⁸ Access to family benefits is not based on compulsory social insurance, since there are no special pay-role taxes for this type of benefit, but some benefits depend on previous employment. There are five types of family benefits. Maternity, paternity and childcare benefits depend on previous employment period, which implies that resident nationals and foreigners who are employed are eligible to apply. However, parental and child benefits, which do not require previous employment, are not available to foreigners as they also include a citizenship requirement (of the parent or child).

Both employed and self-employed are eligible for maternity, paternity and parental benefits. There are no specific eligibility conditions regarding the country of birth or residence of the child. The maternity leave is obligatory and lasts for 13 weeks. There is a minimum period of insurance (less than 6 months) required to become eligible for maternity benefits, but there is no requirement of a minimum period of prior residence. Employers are legally obliged to pay maternity benefits as ‘replacement’ for salaries. The amount of the maternity benefit depends on previous earnings and period of insurance.¹⁹

Serbia offers a quite limited scheme of paternity benefits as the father is allowed to take paternity leave only if the mother cannot take care of the child because she passed away, abandoned the child, is in prison, has extreme illness or has lost her parental rights. The eligibility requirements for accessing paternity benefits are similar as those applied for maternity benefits (previous insurance period, no specific conditions regarding the country of birth/residence of the child, level of benefit depending on previous earnings and period of insurance).

There is no legal provision according to which individuals receiving maternity or paternity benefits are banned from leaving the country temporarily while receiving the benefits. There is a limited possibility of exportability of maternity and paternity benefits only in situations in which individuals move to a country that has a bilateral social security agreement with Serbia covering family-related benefits.

The parental leave starts after the 13 weeks of maternity leave and is a family entitlement that can be shared among parents. It can be granted for up to 39 weeks without specific conditions regarding the country of birth or residence of the child. As for the “parental allowance” (roditeljski dodatak), this lump-sum benefit is available independently of the employment status or the prior period of insurance. However, the parent who is the bearer of this right must be a resident Serbian national and the immediate caregiver for the child. Thus, the child should also reside in Serbia, although this is not specified as such in the law. Furthermore, child’s residence certificate is also one of the documents required to submit the claim for the parental allowance. There are no specific conditions on whether the parent receiving the parental allowance can leave the country temporarily. When deciding to permanently reside abroad, individuals can export the parental benefits only if they move to another country with which Serbia has signed a bilateral social security agreement that covers parental benefits.

Similarly, the “child allowance” (dečiji dodatak) is a benefit available to all national residents, independently of their employment status, period of insurance or prior residence in Serbia. The benefit is granted only if the child has the Serbian citizenship and resides in Serbia. One of the parents must also be a resident Serbian citizen, meaning that foreigners are specifically excluded as potential beneficiaries of child benefits in Serbia.

Child benefits are means-tested benefits that can be granted up until the child reaches the age of 19 (up to the age of 26 for children with special needs). The monthly net income per family member has to be lower than the defined threshold (20% of net average wage increased if the child is disabled or raised by a custodian, a foster parent or a single parent). Furthermore, the claimant can only possess the real estate in which he/she lives, which cannot be bigger than a room per household member plus one additional room. Furthermore, the claimant must not possess more than two hectares of land per household member; nor money equivalent to more than 30 child allowances per family member when the claim is submitted.

The child allowance is flat-rate and available only for the first four children who must also attend primary and secondary education. Since there are no conditions on whether the parent receiving the child allowance can leave the country temporarily, it is possible to go abroad for short time periods. Nationals can also export these benefits if they permanently move to another country with which Serbia has a bilateral social security agreement covering child benefits.

18.2.5 Guaranteed Minimum Resources

The terminology used to refer to the minimum guaranteed resources scheme in Serbia is “financial social assistance” (novčana socijalna pomoć). This scheme is managed locally by the branches of the Centre for Social Work and National Employment Service and is regulated by the Law on Social Protection and the Decree on measures of social inclusion for users of financial social assistance.²⁰

This social protection area is not linked to employment, but it is clearly conditioned by requirements of citizenship and residence. These benefits are exclusively reserved for resident nationals only. Both single persons and families are entitled to financial social assistance. The benefit is mean-tested and the income and the (real and movable) properties are taken into account to determine eligibility. The period of prior residence in Serbia is not an eligibility requirement, but citizenship is, meaning that foreigners cannot claim social assistance. Moreover, this benefit is granted only to resident nationals who have exhausted other social security benefits and civic responsibilities of maintenance. Recipients are obliged to actively seek “suitable” work and do community work, although there are no sanctions if individuals do not fulfil these obligations. The benefit is dependent on income/asset and family composition. Those who are capable of working receive the benefit for up to 39 weeks, while those who are not able to work receive the benefit for 52 weeks. The application has to be resubmitted at the end of the period for which it was granted. There is a periodic re-assessment of personal circumstances, although this is not very frequent.

While receiving the benefit, individuals can leave the country temporarily as long as they meet their obligations with the Centre for Social Works and National Employment Service. They are however not able to claim this benefit if they permanently move abroad. Also, none of the bilateral social security agreements that Serbia has concluded with the three main countries of origin of foreigners residing in Serbia and the three main countries of destination of Serbian citizens cover the area of financial social assistance.

18.2.6 Obstacles and Sanctions

The overview of eligibility requirements for different types of social benefits shows that the Serbian law partially discriminates between resident Serbian citizens and foreigners residing in the country. Non-nationals are eligible for unemployment, healthcare, pensions and some family benefits (maternity and paternity benefit/leave and parental leave) and receive these benefits under the same conditions as resident Serbian nationals, based on previous employment or insurance period. However, access to parental benefits, child benefits, and financial social assistance is reserved only for national residents.

To access social benefits in Serbia, foreigners must also comply with the pre-condition for employment, meaning that they must hold a valid residence (regulated by the Law on Foreigners²¹) and labour permit (regulated by the Law on Employment of Foreigners). As previously mentioned, the 2014 Law on Employment of Foreigners requires non-nationals to have a labor permit not only for the conclusion of an employment contract, but also for the conclusion of any other agreement based on which foreigners acquire rights derived from their employment, which also include social protection rights.

18.2.7 Bilateral and Multilateral Social Security Agreements

Currently, there are 28 countries with which Serbia has signed bilateral social security agreements (Ministry of Foreign Affairs²²), including the countries whose nationals represent the three largest groups of foreigners residing in Serbia (Bosnia and Herzegovina, Croatia and Montenegro) and the three largest countries of destination for Serbian citizens (Germany, Austria and Switzerland). These six agreements cover healthcare, sickness, invalidity benefits, and pensions, allowing for the addition of pensionable/credited employment years from both countries and payment of pensions in another country. However, none of them covers financial social assistance or parental allowances. Some agreements cover both maternity/paternity/parental benefits and child allowance (Bosnia and Herzegovina, Montenegro and Germany), while others cover only maternity/paternity childcare (Croatia and Austria) or only the childcare allowance (Switzerland). Moreover, the agreements with Switzerland and Germany do not cover unemployment benefits (while the agreements for the other four countries do).

18.3 Conclusions

This chapter has shown that access to most social protection benefits for foreigners residing and working in Serbia depends on the structure of the country’s social protection system and is based on the same criteria and requirements as those applied for national citizens residing and working in the country. As the national social security system in Serbia is based on the social insurance model, the entitlement for most of social benefits in cash or in kind is based on the employment period and/or payment of compulsory social insurance contributions. However, foreigners remain excluded from accessing non-contributory benefits such as the parental and child allowances or the guaranteed minimum resource scheme. Serbian nationals residing and working abroad under specific conditions have access to social protection benefits depending on whether the country they reside in has signed social security agreements with Serbia, but range of benefits varies depending on the country. Beside the structure of the country’s social protection system, access to social protection for migrants in Serbia can be explained by the country’s recent history, as well as social, political and economic trends. Turbulent political events of the 1990s marked by the Yugoslav wars, protracted transition from socialism to capitalism, and unstable economic outlook since 2000, have all contributed to the preservation of a social protection system focused on old social risks (see Perišić 2016), also marked by an exclusionary social protection model which limits access to some social protection benefits to migrants – both foreigners in Serbia and Serbians abroad.

The Serbian government has recently announced changes in some social protection areas, which could have an impact on both nationals and foreigners entitled for these benefits. For example, the proposal for the new Law on Pension and Invalidity Insurance also stipulates the elimination of penalties for early retirement.²³ Another debated proposal is the introduction of a minimum old-age pension, which would be available for individuals of more than 65 years old who do not have any previous contributions.²⁴

Other important changes could emerge as a result of Serbia’s negotiations for the entry into the European Union (EU). Serbia was granted the candidate country status in 2012, and the EU accession negotiations were opened in January 2014. A recent report of the European Commission²⁵ on the negotiation progress states that Serbia is “only moderately” prepared for the EU entry in the area of social policy and employment. The report suggests that Serbia should mainly focus on increasing financial and institutional resources for employment and social policy in order to target in a more systematic manner young people, women and long-term unemployed. It also suggests improvements in the adequacy of the social benefit system to provide more effective support for those parts of the population most in need. More generally, Serbia’s EU accession is expected to imply significant changes in access to social benefits for both Serbian citizens temporarily traveling and/or permanently moving to EU countries, and would also have an impact on the social protection of EU citizens residing and working in Serbia.

Currently, there are no significant controversies or political debates related to the access of foreign residents or nationals residing abroad to social benefits in Serbia. Most of the recent debates were instead focused on the status of irregular migrants and asylum seekers. However, it is estimated that, in 2018, there were only around 4.000 irregular migrants in Serbia.²⁶ The governments’ attitudes towards the migrants in search of work and better economic conditions was expressed in the words of the Minister of Labor and Social Policy, Aleksandar Vulin, who in the context of the migration crisis said that “Economic migrants who are not welcomed in the EU should not be welcomed in Serbia either”.²⁷