The scandal of the overtaxation of sick leave sent politicians into a frenzy. Under what conditions could the new tax be removed

The scandal of the “sickness tax” heats up the spirits both among politicians, who are now running from corner to corner, and among patients who entered medical care and found themselves with reduced income. Several specialists in the field explained to “Adevărul” why the scandal broke out only now, although the law was passed in December last year, and how the damage done could be repaired.

Those who take sick leave will receive a lower allowance. Photo source: archive

Until this year, the Romanian state paid huge sums for the settlement of medical leaves, many of them issued fraudulently. The elected officials therefore decided to turn off the money tap and tax the allowances in the hope that it would discourage the phenomenon. Now, however, when it has seen the impact on the pocket of real, not imaginary, patients, the Government is reversing it: it wants to eliminate additional taxation. But not anyway and not for anyone.

Until January of this year, an employee who was on medical leave received 65% of the gross salary. This, after his social security contributions and income tax were withheld. In mid-December of last year, the Government decided to introduce a new tax: it is about taxing medical leave with an additional 10%. The money represents the contribution to health from the allowance received, and the decision was taken with the adoption of the fiscal-budgetary measures. Basically, then, the governors did a calculation and realized that in 2023 they settled far too many medical leaves compared to the number of employees.

The Minister of Health, Alexandru Rafila, said that “it is clear that we have to keep the phenomenon under control, because we are discussing a lot of public money that is being paid”. And Prime Minister Marcel Ciolacu declared that, in 2022, more than 8 million medical leaves were registered for a gainful population of 6 million Romanians. “It is obvious that this phenomenon has been abused and I inform you that it is a debt from last year (2022 – no) for medical leaves of 6 billion lei, respectively 1.2 billion euros“, said the social-democratic prime minister.

The compensation for sick leave is borne from the employer's salary fund for the first five days, after which from the Single National Social Health Insurance Fund. The government justified this additional tax by the need to have a prudent fiscal-budgetary policy and to properly manage state resources and expenditures.

About correcting an error in the rush for votes

Now that the law has started to take effect, the Government is reversing it and trying to remove the additional taxation. Basically, the elected officials adopted a law last year that they want to abandon after only two months. The reason? They realized that the “sickness tax” weighs heavily on the pockets of those who are already financially strapped and who…have the right to vote. Let's not forget that we are in an election year.

Cezar Irimia, president of the Federation of Associations of Cancer Patients, told “Adevărul” that “they take their electoral capital on the backs of the sick. In vain we say that the work is thoughtless. That it might be very well thought out, but how can you take advantage of a man's misfortune to take his money and then use it to win votes? It's vile, I've never seen anything like it before“.

Vasile Barbu, president of the National Association for patient protection, explained to us that, indeed, “there is an extremely high pressure from both civil society, professionals and opposition parties, who received a ball in the net as they did not expect”. So USR, for example, notified the People's Advocate and submitted a law to the Senate to eliminate this extra contribution.

“In January 2024, over 4,000 mothers have already been affected, the incomes of parents who accompany their children with oncological conditions, children who are diagnosed with cancer and undergoing chemotherapy. At least 5,000 families”said USR deputy, Oana Țoiu, one of the voices demanding the elimination of this taxation.

Then there was also a lot of pressure from patient associations. Radu Gănescu, president of the Coalition of Organizations of Patients with Chronic Diseases, stated that “we requested that this fee be eliminated, if we are talking about chronic patients or patients with rare diseases who have no other options. If you get sick, you have to take time off. It is not an option, a choice. This fundraising for medical leave expenses is done at the expense of patients and is not fair.”

Cezar Irimia, president of the Federation of Associations of Cancer Patients, told “Adevărul” that “we are talking about an abusive measure that violates the patient's rights. You cannot tax a man who is unable to work. It's illegal. They are all committed illegalities. Medical leave is the support of the employee who is temporarily unable to work. If she is unable to work…you give her 10% of that? Are you going to give him another shot at burying him?”

In the face of so many reproaches, the Minister of Health, Alexandru Rafila, announced that he is eliminating overtaxation, but only for cancer patients. The statement added more fuel to the fire. Cezar Irimia was outraged by the proposal, which he considers discriminatory. “This Ordinance must disappear, no one should be taxed on sick leave, otherwise we will surely go to court. This Ordinance is aberrant and we do not want to be favored, but we want the elimination of this Ordinance! It's face discrimination! We want all medical leave to be tax-free”

PNL, instead, will submit an amendment for the complete elimination of overtaxation. PNL senator Nicoleta Pauliuc declared that “today, (yesterday-no) in the Parliament and the specialized committees, the Finance Budget Committee and the Labor Committee, the National Liberal Party group submits an amendment to eliminate the 10% taxation of medical leaves“. She also said that the amendment covers not only oncology patients, but also a number of other categories that benefit from maternity and maternal risk leave or for caring for a sick child. Nicoleta Pauliuc explained in a televised intervention that they are trying practically “correcting an error that crept into Ordinance 115 at the end of the year. The man contributed during the time he worked and it is unfair that when he needs it, he does not voluntarily take an oncology patient sick leave – but because he is forced by the situation”.

Patients demand the elimination of overtaxation through the GEO

The state wants to prevent the phenomenon of medical leaves received fraudulently, in order to save money on the budget. On the one hand. On the other hand, the authorities try to extort money from the pockets of the bona fide, the real sick, who really suffer from a certain disease and need rest. Here is the drama. Because we are talking about sick people who already have reduced incomes due to expenses for medicines, treatments, hospitalizations, etc. And who, let's not forget, during the time they stay at home they don't receive their full salary, draw the attention of the patient representatives.

“The fact that in Romania there are many days of sick leave, maybe many of them not covered.. here is a system that should be regulated and controlled by an authority and not by imposing taxes, but by controlling those who issue these sick leaves”, said Radu Gănescu, president of the Coalition of Organizations of Patients with Chronic Diseases. Cezar Irimia is of the same opinion. “If they want to eliminate the cause, they have other levers. They have state institutions that can verify the truth with these fraudulently issued medical certificates. They did not fight the cause, but the effect. But what an effect!!” Cezar Irimia warns that the granting of medical leave without a real reason can be easily detected by state institutions. “But don't penalize all patients!”

For the evil to be corrected, there are two possibilities. Amendments can be proposed at Parliament level – and here there was already a discussion in which PNL representatives participated – or they can be voted through an Emergency Ordinance. ” An Emergency Ordinance to repeal part of the train ordinance”, Cezar Irimia explained in detail. ” There is no need for a debate in Parliament, as this procedure is cumbersome and takes a very long time. They might want to extend the period a bit to collect some money”.

In the first quarter of 2023, Romanians took more than 8.4 million days of sick leave, which means just over 23,000 years, according to data provided by CNAS.

Patients threaten to sue

The scandal of the overtaxation of sick leave did not break out last year when the law was passed, but now, at the beginning of February. The reason? “Everybody thought they were going to go back on the law and withdraw it. Even I thought so“, explained Cezar Irimia. “It all came crashing down when patients woke up in February with less money. That's when the circus actually started. So, the Romanian does not react until the knife reaches his bone”.

The cancer patients' federation is determined to seek justice in court. “But we are very determined to take them to court because they violated patients' rights. And if they don't withdraw the additional taxation and don't pay the people back the money next week, we'll see you in court.”