Indians with Polish Pensions? Left Promotes Deal with India

Last November, the Polish government signed a social security agreement with India. This special agreement grants citizens of both countries the same rights for working in both countries based on aggregated contributions from both countries. It is based on the same principles as EU citizens, guaranteeing that their work in a foreign country will be recognized and count towards their pension or disability pension. It also guarantees survivors' pensions, lump-sum compensation, pensions for accidents at work and occupational diseases, and funeral benefits . And—most controversially—access to minimum pensions financed from the state budget.

The justification for the draft ratification of the agreement states that this agreement was to benefit Polish workers in India, including those delegated to branches of Polish companies, for whom their employers have to bear the costs of double contributions – in Poland and in India. The Indian market is operated by, among others, Inglot cosmetics, Polmor (railway construction), Famur (mining), Meble Forte and companies from the sector. IT. The catch is that it's only about 200 people. How many Indians currently work legally in Poland and would benefit from this agreement? It turns out that the number is over 21,000, and growing.

India would be the 16th non-EU country with such a special agreement. We have it with Australia, Israel, the former Yugoslav states, Mongolia, Korea, and the USA, among others. The last two countries whose citizens are covered by such protection are Belarus in 2022 and, earlier, Ukraine (since 2014) . These are also the largest beneficiaries of these agreements, according to data from the Social Insurance Institution (ZUS) for "Rzeczpospolita."

These agreements are controversial today. Why? Even a single contribution to the Polish Social Insurance Institution (ZUS) is enough for a foreigner residing in Poland and demonstrating the required contribution period in Ukraine or the USA (in Poland, this is 20 years for women and 25 years for men, but only 10 years in India) to be entitled to an increase in their pension to the level of the Polish minimum pension, paid from the Polish state budget – as revealed several years ago by "Rz" (Rzeczpospolita) . ZUS honors employment certificates in countries with which it has such agreements, without verification.

Photo: Paweł Krupecki

Special international agreements are a significant burden on the social security system, which is now being expanded to include yet another group of insured individuals who will one day draw on their earned contributions in the form of pension and disability benefits. How many foreigners will benefit from which benefits? It's a big unknown.

As we have established, the government agreement with India was signed seven months ago by Sebastian Gajewski, Undersecretary of State in the Ministry of Family, Labor and Social Policy and a member of the New Left's national leadership. The Government Information Center informs us that the ministry initiated the agreement, and "the Council of Ministers, through a resolution adopted by circulation, consented to its signing."

In April of this year, the agreement was submitted to the parliamentary committees on social policy and foreign affairs for review. To date, however, the committee's chair, Katarzyna Ueberhan of the Left, has not tabled it, and the matter has been removed from the agenda of the foreign affairs meeting chaired by Paweł Kowal, a Civic Coalition (KO) MP. "I don't know what's happening with this resolution. I'll inquire and get back to you," MP Joanna Frydrych, deputy chair of the committee (KO), promised us a few weeks ago. But that promise ended there. MP Ueberhan has also not contacted Rzeczpospolita. MP Kowal replied that he would investigate the matter.

Surprisingly, the ministry of Agnieszka Dziemianowicz-Bąk, also a member of parliament from the Left, doesn't know the reasons. "The further course of the procedure rests with the Ministry of Foreign Affairs, the Sejm, the Senate, and the President of the Republic of Poland. The ministry is unaware of the reasons for the lack of a resolution by the Sejm's Social Policy Committee on this matter," the ministry's press office replied.

Joanna Frydrych: – Without ratification by the Sejm, the agreement is not binding.

Photo: Paweł Krupecki

It appears the government no longer cares about initialing this agreement. According to opposition politicians, there's no political or social climate for it. The Confederation is demanding answers from the government about the costs of implementing this agreement for the state budget and how it would be burdened by an identical agreement with Ukraine. The Ministry of Labor stated in the bill that "the agreement will have no impact on state finances." This is untrue. Increases to minimum pensions "are reimbursed from the budget in accordance with Article 87, Section 2 of the Act on Pensions and Disability Pensions from the Social Insurance Fund." Who decided to include such disinformation in the explanatory memorandum to the bill? asks Michał Wawer, a Confederation MP.

And also, among other things, why the government didn't include provisions in the Polish-Indian agreement excluding the application of Polish minimum pension regulations to Indian citizens? "Our caucus will be submitting a bill to introduce a 20-year residence requirement in Poland for foreigners to be eligible for a Polish pension," says MP Wawer.

The Ministry of Labor surprisingly explains to "Rzeczpospolita" why it signed this agreement. This is so that Indians on delegation to Poland wouldn't acquire pension rights from Poland, but from their own country. "The agreement between Poland and India aims primarily to reduce the burden on the Polish pension system associated with the delegation of employees from Indian companies to Poland. According to its provisions, these employees will not be subject to the Polish social security system for up to five years, and therefore will not acquire the right to a pension from the Social Insurance Institution (ZUS). Currently, due to the lack of such an agreement, these employees pay contributions in Poland and acquire pension rights," the Ministry of Labor and Social Policy press office responds to our questions (after five years, the Indians will be included in our FUS system anyway).

However, this only applies to people posted to work in Poland or Poles temporarily working in India. He estimates this number at just 200–300. These include students, employees of international corporations, representatives of companies investing in India, and family members of Indian citizens.

What about ordinary migrants from India on work visas? "Such individuals are covered by the Polish insurance system, pay social security contributions, and may be entitled to a Polish pension after meeting statutory requirements," the ministry admits.

The Ministry emphasizes that the Polish-Indian agreement is not a migration agreement. "It does not facilitate access to the Polish labor market, does not simplify residence legalization procedures, and does not constitute an incentive for foreigners to work in Poland. Indian citizens – like all foreigners – must undergo the same procedures for accessing the labor market, regardless of whether Poland has concluded a social security agreement with their country," the Ministry adds.

Is the agreement with India also good for Poland?

"Our pensions depend on the capital we accumulate in the form of contributions and life expectancy . I believe that a foreigner who legally works here should also be treated this way, because it's fair and just. But of course, there are abuses that this system allows for, and these should be changed as soon as possible. For example, the guarantee of 13th and 14th salaries even for retirees who haven't worked, or the guarantee of benefits after paying just one contribution. Such cases exist, and I understand that they outrage public opinion," Jeremi Mordasewicz, an expert and former long-time member of the ZUS supervisory board, tells "Rz." In his opinion, the guaranteed minimum pension – for both Poles and foreigners – should be after 35 years of service, not the current 20 years for women and 25 years for men. And the employment period should be extended to 40-45 years.

Between 2.3 and 2.5 million foreigners live in Poland. 1.2 million of them pay social security contributions for legal employment. Ukrainians lead the way, with over 780,000 foreigners in the social security system.

How many foreigners receive a Polish pension on the basis of bilateral international social security agreements with countries outside the EU/EEA/Switzerland?

According to ZUS data for "Rz," this number has increased by over 100% over the past eighteen months, from 4,900 people in December 2023 (costing ZUS PLN 3 million per month) to 8,600 a year later (PLN 4.4 million per month). In May of this year, this number was 11,100 foreigners. In May, ZUS paid them PLN 5.5 million. This translates to approximately PLN 60 million annually from ZUS.

ZUS admits that "the largest groups of foreigners who receive pensions under the above agreements are Ukrainians, Belarusians and Americans."

The Ministry notes that "in Poland, the right to a pension – including the minimum pension – does not depend on citizenship, but solely on meeting the conditions specified in the law. Anyone who meets these criteria has the right to have their benefit increased to the level of the minimum pension." What does this look like in numbers?

According to the ministry, "a very small percentage of foreigners living and working in Poland take advantage of this opportunity." For example, out of over 780,000 insured Ukrainian citizens, only 996 benefit from the increased minimum pension.

This number, however, will likely increase soon. Jeremi Mordasewicz: "It's small today, but the system will accelerate as more and more working foreigners reach retirement age and complete the required length of service."