The citizens of Kosovo are financed through some sources of income:
- Public employment
- Private employment
- Pension if a person reached 65 years of age
- Financial support provided to families and individuals in extraordinary cases
- Social assistance, and other assistance income
The majority of employers transfer the salaries directly to the bank accounts of the employees.
Law on public finance management and accountability regulates the forms of budgetary, capital, and operative expenses, financial management, accounting, budgetary accountability, and the system of financial reporting for public authorities and public enterprises in Kosovo, as well as the description of duties and competencies of the Minister of Economy and Finance and other public authorities related to these matters.
“Pension” means a regular monthly payment to a participant (or contributor) during his/her life, as a result of the retirement age, physical disability or death of participant in accordance with the law on pensions.
Sixty five (65) years of age and above is considered “Retirement age”.
Types of pensions in Kosovo
Besides the pensions for war categories, three other pension schemes are being applied:
- Basic Pension Scheme,
- Pension Scheme for Disabled Persons, and
- Pension Scheme for premature retirees of “Trepça”.
The Pension Savings Trust of Kosovo is responsible for the administration and management of individual pension saving accounts.
This tax obliges the employee and the employer to contribute 5% of employee’s salary and 5% by employer to finance the employee’s pension. The pension contribution is paid monthly by the employer, or every three months by the self-employer. This payment should be supported with a report, which in fact represents the initiation of the process of money allocation to the employees’ accounts. Therefore, if the payment is completed without reporting it, even though the money was paid it is not allocated at individual level.
The Tax Administration of Kosovo is responsible for the management and administration of pensions in accordance with the existing law. The Administration manages and administers the payment of basic pensions for all citizens with permanent residence in Kosovo, who have reached the retirement age. The Ministry of Economy and Finance transfers the total income to the Administration in order for it to finance the basic pension in accordance with the means designed by the Special Representative of the Secretary General.