Income from activity obtained on sick leave and the right to benefits

As a rule, the performance of activities related to economic activity during the declared incapacity for work deprives the entrepreneur of the right to sickness insurance benefits. Income from activity obtained on sick leave does not always result in the loss of the allowance. When do these situations occur? Read on!

Entrepreneur's sickness benefit

In order to be eligible for the allowance, entrepreneurs must meet several conditions. In the case of entrepreneurs, sickness insurance is voluntary, so only those who pay sickness contributions can take advantage of the sickness benefit. It is not the only condition - in order to be entitled to this benefit, the premium must be paid for the waiting period, i.e. 90 days. Only after this time, the entrepreneur can take advantage of the sickness allowance. Importantly, the waiting period includes previous insurance periods (e.g. full-time), provided that the break between insurance did not exceed 30 days or was caused by parental leave, unpaid leave or active military service by a professional soldier. The last condition is that all contributions are paid on time. This is because from the first day of the month for which the entrepreneur has not paid the due contribution on time, he is excluded from voluntary insurance, which in turn, in most cases, results in the refusal of the benefit.

Entrepreneur's application for voluntary sickness insurance

In a situation where the entrepreneur is not registered for sickness insurance, and would like to join it, he should complete the relevant formalities with ZUS. First, submit to ZUS ZWUA, and then apply to the ZUS ZUA health insurance. Importantly, the sickness insurance coverage begins on the date indicated in the application, but not earlier than from the date on which the application was submitted. The exception is the situation in which the entrepreneur reports to the voluntary sickness insurance together with the application to the compulsory insurance before the expiry of 7 days from the date of the creation of the title to them.

How much is sickness benefit?

In the case of entrepreneurs, the sickness benefit is paid on the basis of the average declared contributions from the last 12 months. The average calculated in this way should be further reduced by 13.71%. The amount of the allowance will additionally be:

• 80% of the calculation basis of the allowance in the event of incapacity for work;
• 70% of the calculation basis for the allowance in the event of a hospital stay;
• 100% of the allowance calculation basis, when:

• the disease falls during pregnancy;

• the inability arose due to an accident on the way to or from work;

• it is necessary to undergo the necessary medical examination provided for candidates for tissue and organ donors.

Sickness benefit is payable for each day of incapacity for work, including days off work. Importantly, you should remember that tax is withheld from your allowance. In order to receive the allowance, the entrepreneur must submit the Z-3b form to the Social Insurance Institution.

Example 1.

Ms Karolina volunteered for sickness insurance when she started her business on April 12, 2015. Contributions were paid on time. From the beginning, it pays the so-called large ZUS. From August 26, 2020 to August 31, 2020, Karolina was on sick leave during her pregnancy. In order to pay the benefit, she submitted form Z-3b to the Social Insurance Institution. To determine your allowance:

calculate the average premium; in 2019 it was at least PLN 2,859, and in 2020 PLN 3,136.20 (the so-called large ZUS):

(5 x 2859 + 7 x 3136.20) / 12 = (14 295 + 21 953.40) / 12 = PLN 3020.70;

reduce the base 13.71%: 3020.70 - (3020.70 x 13.71%) = PLN 2606.56.

For the day of the release, Ms Karolina will receive: 2606.56 / 31 = 84.08 PLN.

For the entire period of illness, he will receive: 84.08 x 6 = 504.48.

Income tax should be deducted from this amount.

An entrepreneur who receives an allowance has the right to a reduction in the social insurance contribution base for the period in which he was not engaged in business due to illness. In this case, the provisions of Art. 18 sec. 9 of the law on sus, dividing the base amount by the number of calendar days in that month and multiplying by the number of days of insurance coverage (excluding the benefit period).

Example 2.

Ms Karolina from the previous example may lower the contribution base for August by 6 days. The basis in this case will be PLN 2,529.19 (PLN 3,136.20 / 31 x 25).

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Income from activity obtained on sick leave

Income from activity obtained on sick leave as a result of work performed during the sick leave may be the basis for withdrawing the right to unemployment benefit. Pursuant to Art. 17 sec. 1 of the Allowance Act, "the insured who performs gainful employment during the period of the declared incapacity for work or uses the leave in a manner inconsistent with the purpose of the leave, loses the right to the sickness benefit for the entire period of the sick leave".

According to the judgment of the Supreme Court of August 12, 1998, II UKN 172/98, even performing other paid work during the period of sick leave, not related to running a business, is a sufficient premise for the loss of the right to sickness benefit for the entire period of the sick leave. Therefore, in the provisions of the Benefit Act, gainful employment is understood as:

• giving instructions and directions to employees;
• supervising employees;
• meeting clients or contractors;
• receipt and delivery of goods;
• activities not related to running your own business, e.g. performed under a contract for specific work.

Importantly, if you work for even a few hours during the monthly leave, you lose the allowance. In such a situation, the entrepreneur will have to return the "unduly" collected benefits together with statutory interest. There is an exception to this rule: if the entrepreneur stayed in hospital for part of the sick leave, then he / she retains the right to sickness benefit for this period.

Performing paid work during sick leave leads to the loss of the right to sickness benefit for the entire period of the sick leave.

However, it should be remembered that in the course of running a business, there are situations when the functioning of the entire enterprise may depend on the response to them. Therefore, it is assumed that during the period of sick leave, the insured person may perform certain work that will not result in the loss of the right to sickness benefit, but such work cannot be of a gainful nature. Moreover, such activities should be incidental and exceptional. Among them, there are mainly formal and legal activities to which the entrepreneur hiring employees is obliged. However, the case law in this matter is not uniform, so it is worth remembering that sometimes given activities by one panel of judges may be considered paid work, and other times not. Signing:

• financial documents: payroll, transfer lists;
• billing documents drawn up by employees;
• invoices.

The last point raises a lot of controversy, but such a position is confirmed by the judgment of the Supreme Court of May 6, 2009, II UK 359/08: “The mere signing of invoices does not prove running a business. If the entrepreneur did not perform paid work during sick leave - did not supervise the employed employees, did not serve customers, did not supply the shop - he is still entitled to the allowance, and the mere signing of financial documents drawn up by another person cannot be treated as a business activity " .

The entrepreneur who is on the allowance may either suspend the activity or appoint an attorney. Importantly, delegating your tasks to someone else while you are receiving benefits will not be considered work.

To sum up, the income from the activity obtained on sick leave may result in the entrepreneur losing the right to the benefit and will be obliged to return the benefit with interest. In order for the company to function normally during this period, the entrepreneur may appoint an attorney.