Retirement is usually perceived as the end of active work and a time to redirect life priorities – to the tranquillity of rural life, caring for family and grandchildren, or simply having more time for rest. However, many retirees remain active in the labour market, either by their own choice or due to the need for higher incomes. Engaging in work during retirement can bring a number of benefits, in addition to financial ones – it strengthens social contacts, maintains physical and emotional health, and creates a sense of contribution to society.

There are a number of opportunities for an active life and additional income if you are of retirement age. Of course, they depend on various life circumstances, your health, personal attitudes and, last but not least, your professional competencies. Along with continuing your current career in the same or another place, you can focus, for example, on areas related to consulting, translations, training and private lessons, childcare, developing a craft or hobby, producing agricultural products and many others.

In case you continue to work, the question of the form of your employment commitment is important - whether you continue to hold a position under an employment contract, perform a specific task under a civil contract, or you have your own business. Each of these options has legal specifics regarding your obligations to the state, which you should be aware of.

 

1.       Working under an employment contract after retirement

The legislation does not distinguish between pensioners and other workers under an employment contract - you have the same obligations, but you enjoy privileges, such as paid sick leave and annual leave. Pensioners working under an employment contract or under a trading company management contract are subject to mandatory social and health insurance for all insurance risks, which also includes the payment of pension contributions. Tax obligations are the same as for other employees working under an employment contract.

The opportunity to work under an employment contract is often taken advantage of by people who have worked in professions classified as labor category I or II. Due to the earlier retirement age, they have a considerable time horizon for professional fulfilment.

 

2.       Working under a civil contract after retirement

With a civil contract, you work under non-employment legal relationships, and your income is subject to the usual taxation, but with legally recognized expenses taken into account. Health insurance contributions are mandatory. Pensioners have the right to choose whether to insure themselves or not under the mandatory pension insurance. They must declare the chosen insurance regime, which is usually done by indicating the choice in the account for paid amounts.

 

3.       Pensioners who are self-insured persons

Many pensioners continue their work as craftsmen, agricultural producers, or develop businesses as sole traders, through Limited Liability Company (LLC) or single-member LLC, and practice liberal professions. They belong to the so-called self-insured persons.

Self-insured working pensioners, regardless of what type of pension they receive, can take advantage of their right to a more flexible insurance regime. They are required to make health insurance contributions but can choose whether to make pension contributions. If they wish to continue their pension insurance, they must submit a declaration to the National Revenue Agency.

 

4.       Possibility of a higher pension for self-insured working pensioners

Pensioners working under an employment contract can take advantage of the possibility of recalculating their pensions for work activity and increasing their amounts. The same applies to pensioners who have paid pension insurance contributions on income from civil contracts or as self-insured persons.

 

There are two options for pension recalculation, according to the provisions of the Social Insurance Code:

•         Official recalculation of pensions for work activity with the additional contribution service acquired after retirement

It is carried out once a year, from 1^st April of the relevant year, without the need to submit an application. The calculation is based on the data up to the end of the previous calendar year, submitted by the employers, and for self-insured persons - the data on the social security contributions paid by them.

•         Annual recalculation of pensions for work activity with the additional contribution service acquired and social security income upon application by the pensioner

The annual recalculation of the pension is carried out after an application is submitted by the pensioner to the territorial division of the National Insurance Institute, which pays their pension for work activity. The contribution service and social security income are taken into account based on the data submitted by the employers, and for self-insured persons - the data on the social security contributions paid by them. In case the recalculation with available data on social security income is less favourable for the pensioner, the new pension amount is determined only on the basis of data on contribution service for the same period.

 

5.       Active and unemployed during the retirement period

Even if they are not engaged in work within the meaning of the law, pensioners have many opportunities to remain socially active. They can join volunteer initiatives, attend educational courses or engage in hobbies that create new social contacts. Many pensioners choose to participate in clubs of interest, cultural and sports events, or travel in organized groups.

In Bulgaria, there are also various benefits for pensioners that can facilitate their social activity – reduced prices for transport, discounts for museums, theatres and other cultural events.

 

Useful links:

National Social Security Institute

Social Security Code