10.31.1.30 Social Security System in Latvia
Latvia's social security system
The Latvian social security system is a contribution based social insurance system covering old age, invalidity and survivors benefits (invalid benefit is not covered under the Agreement). These payments are not income tested. Without an Agreement, Latvian pensions can only be paid into a Latvian bank account.
The mandatory social insurance pension is operated by the State Social Insurance Agency (VSAA) and the amount of pension is based on the number of contributions, annual capital growth, and average life expectancy.
Since July 2011 there has been a 3 tier pension system in Latvia:
- the 1st tier is the state compulsory unfunded pension scheme,
- the 2nd tier is the state funded pension scheme, and
- the 3rd tier is the private voluntary pension scheme.
The Agreement covers contributions in the 1st tier and also contributions in the 2nd tier.
From January 2014, the 1st tier of the Latvian pension system provides a pension payment for all individuals who have a qualifying insurance period of at least 15 years (previously 10 years).
The Latvian State social insurance benefit (social assistance) is paid to Latvian residents if they have a qualifying insurance period of less than 15 years (previously 10 years).
Old age pension
From January 2014, the Latvian old age pension, for both men and women, can be claimed at age 62 years and 3 months (previously 62 years) if the person has a minimum insurance period of at least 15 years. The Latvian retirement age is gradually increasing by 3 months per annum until it reaches 65 years by the year 2025. The minimum insurance period will increase to 20 years in 2025.
Early retirement pension is currently possible from age 60 with at least 30 years of coverage.
Survivor's pension is paid to dependant family members who are younger than 18 years of age, or people who become disabled before the age of 18. Persons who study in secondary, professional schools or universities (full time studies) can receive this pension up to age of 24. Accordingly, surviving spouses are not entitled to survivor's pension (see Death Benefits below).
If a person receiving old age pension dies, this person's spouse can receive a death grant, which is as a once off lump sum payment equivalent to 2 pension payments previously received by the person who died.
Extraordinary allowance can be paid to a family member who organised the funeral and the amount is also equivalent to 2 state pensions (previously received by the person who died).
Act reference: SS(IntAgree)Act Schedule 30 Republic of Latvia