Company Social Benefits Fund
What is the company’s social benefits fund?
The Company Social Benefits Fund, commonly known as the Social Benefits Fund, is a specific social policy instrument implemented within the workplace. Its main goal is to mitigate differences in the standard of living of employees and support people in a difficult life situation. These funds are not part of the remuneration for work, but constitute a special purpose fund that the employer has at its disposal, acting in consultation with employees.
Who is obliged to create a Social Benefits Fund?
According to Polish law, the obligation to create a fund rests with specific groups of entities. First of all, these are employers employing at least 50 full-time employees as of 1 January of a given year. In the case of companies employing between 20 and 50 full-time employees, the fund is created if the application is submitted by the company’s trade union organization. Regardless of the number of employees employed, the fund must be created by public sector units (the so-called budget units and local government budget enterprises).
Financing and resources of the social fund
The main source of funding for the social fund is the annual basic write-off. The amount of the basic allowance per employee is closely related to the average monthly salary in the national economy in the previous year or in its second half of the year – this is announced every year by the President of the Central Statistical Office.
The employer may additionally increase the fund’s resources, e.g. through donations, interest on the interest rate on loans granted for housing purposes or proceeds from fees charged to those using social services. Importantly, the funds from the Social Insurance Fund must be collected in a separate bank account, and the funds of the fund that have not been used in a given calendar year are transferred to the next year.
Eligible persons and social criterion
According to the Act, persons entitled to use the benefits are:
- Employees and their families.
- Pensioners – former employees and their relatives.
- Other persons to whom the employer has granted the right to use the terms and conditions.
The most important principle governing the fund is that the granting of discounted services and benefits financed from its resources depends solely on the so-called social criterion. This means that the granting of assistance from the fund depends on the life situation of the family and material person of the entitled person. The rules for granting benefits cannot be based on the criterion of seniority or employee efficiency.
In order to reliably assess the situation, the employer has the right to request documentation of personal data concerning the income of family members. This is necessary in order to grant a reduced service of an appropriate amount to ensure fair social support for those who are entitled to it.
What can the funds from the Social Insurance Fund be used for?
The funds of the fund have a strictly defined purpose. The catalogue of social benefits includes m.in:
- Subsidy for recreation (the so-called holidays under the pear tree).
- Support of the material entitled person (allowances, Christmas packages).
- Financing various forms of preschool education, nurseries and care provided by a day caregiver.
- Running and restoring company social facilities (e.g. holiday centers, but also liquidation of company houses as part of restructuring).
- Granting loans for housing purposes and renovations of other company housing stock.
It should be remembered that the company fund may not be spent for purposes contrary to the Act, such as financing a company canteen (as a commercial service), purchasing workwear or providing private medical care. Although medical subscriptions are popular, case law indicates that the financing of private medical care from the fund is controversial, unless it concerns rehabilitation as part of helping people in a life situation requiring special support.
Regulations – the foundation of social activity
Detailed rules for spending money in a given workplace are specified in the Regulations of the Social Insurance Fund. It is agreed with the staff (unions or employee representative). It is in it that income thresholds, types of discounted services and deadlines for submitting applications are recorded. Thanks to this, the process of distributing social benefits financed from the write-off is transparent and adapted to the specifics of the organizational units of a given employer.
Proper management of the company’s social benefits fund is not only an obligation, but also a chance to build a loyal team through real support for employees in their everyday financial situation.
