Situation:
An employee at company A, with a CIM (individual employment contract)for an indefinite period, will have her work reports suspended for May 2022 (maternity leave, parental leave). She is also the sole administrator and partner in an SRL (limited liability company) without employees – company B. Will the right to the child raising allowance be suspended under these conditions?
Is the maternity allowance affected in any way? Can the employee raise dividends?
Solution: According to Article 16 (2) of the Emergency Ordinance 111/2010 on leave and monthly allowance for raising children:
“2. Entitlement to the allowances provided for in Article 2 (1) and Article 5 and Article 9 (4) and (5) respectively shall be suspended from the day following that on which:
- i) the beneficiary earns taxable income and the child has not reached the age of 2 years, respectively 3 years, in the case of the disabled child. ”
As can be seen, the text quoted above provides that the child raising allowance is suspended if the beneficiary earns taxable income.
In paragraph 3 of the same article, some exceptions are set out as follows:
(3) Except as provided in paragraph 2 (i), the payment of the child-raising allowance shall not be suspended if the person entitled is in one or more of the following situations:
- a) receives various amounts based on the law, the collective labor contract or the individual employment contract, granted during the parental leave, other than those resulting from the actual development of an activity during the leave period;
- b) receives allowances as a local or county councilor, regardless of their level;
- c) realizes, during a calendar year, income subject to tax, through the effective development of an activity during the holiday period, whose net level does not exceed 5 times the minimum amount of the indemnity established in article 2 paragraph (2).
According to Article 7 paragraph (4) of the Methodological Rules for the application of Emergency Ordinance 111/2010:
In the case of persons who simultaneously generate taxable income from several sources, parental leave and allowance shall be granted on the basis of documents proving the suspension of at least one of the activities, in compliance with the provisions of Article 16 paragraph (3) letter c) of the ordinance. expedite.
Therefore, in the conditions in which the activity of the employee within company A is suspended, it is not necessary to suspend the activity within company B as the quoted text stipulates that at least one of the activities must be suspended.
However, according to letter c) above, the person in question may generate, during a calendar year, income by actually carrying out an activity during the holiday period, the net level of which does not exceed 5 times the minimum amount of the allowance for growth the child.
Thus, the maximum amount that can be achieved by carrying out an activity during the holiday period during a calendar year is 6250 lei net (5×1250 lei where 1250 lei is the minimum allowance).
If this amount is exceeded, the child raising allowance is suspended.
According to Article 2 paragraph (1) of Emergency Ordinance 111/2010 on leave and monthly allowance for raising children, income from salaries, income from self-employment, income from intellectual property rights and income from agricultural activities subject to income tax according to the provisions of the Law 227/2015 on the Fiscal Code, with subsequent amendments and completions, are “hereinafter referred to as taxable income”.
We mention that the income from dividends does not represent “taxable income” within the meaning of article 16 paragraph (2) letter i) of Emergency Ordinance 111/2010, fact that the payment of the allowance is not suspended if the beneficiary of the child raising allowance earns dividend income.
Thus, these incomes can be realized during the period of parental leave.
Regarding the maternity allowance, it is forbidden to perform activity based on another individual employment contract / mandate contract / administration for the administrator.
In case of an accumulation of individual employment contracts or an accumulation of individual employment contract and contract of mandate / paid administration, she benefits from maternity leave and allowance from all jobs and cannot perform any activity.
Legal basis:
– Emergency Ordinance 111/2010 on leave and monthly allowance for raising children;
– Fiscal Code (approved by Law no. 227/2015, published in the Official Gazette no. 688 of 10.09.2015), with subsequent amendments and completions.