Amendments to the legislation on granting vacation and monthly allowance for raising children

On July 1st, 2016, Law no. 66/2016 came into force. This amends and supplements the Government Emergency Ordinance no. 111/2010 regarding the Vacation and Monthly Allowance for Raising Children. It will bring significant changes to the social protection measures granted to parents who take time off work to look after their offspring.

The new provisions will mean that people who, in the two years prior to childbirth, obtained:
• salary income or similar incomes;
• income from independent activities;
• income from agriculture, forestry and fisheries, subject to income tax for at least 12 months

will benefit from parental vacation for children aged up to two years, or three years in the case of disabled children. In addition, they will receive a monthly allowance amounting to 85% of the average net income achieved in the past 12 months from the last two years preceding the date of childbirth.

However, the minimum amount of monthly allowance for children has to be at least equal to a percentage of 85% of the gross minimum national salary (RON 1,062 as of May 1st, 2016).

Another major amendment is the removal of maximum levels of parental allowance which were previously computed by reference to the so called social reference index (“ISR”).

Furthermore, the amount of incentive insertion increased from RON 500 to RON 531. This is related to the minimum allowance for raising children (50% of minimum parental allowance).

The period for granting incentive insertion has been prolonged by one year, until the child is three years old, or four years old if disabled.

Certain requirements have also been removed that restricted the access to social benefits, such as the parents’ obligation to pay local taxes for personal assets to maintain the right to child allowance.

Stratulat Albulescu - Attorneys at law