Romanian authorities have introduced the obligation to pay health contribution for pensions, a tax change which will apply starting next month.
More precisely, starting 1 August 2025, an important tax change will impact pensioners in Romania: those receiving pensions above RON 3,000 per month will be required to pay a 10% health insurance contribution (CASS) on the amount exceeding this threshold.
The measure was introduced through the same Law no. 141/2025, which introduced also the major VAT changes and the dividend tax increase. So, this change also forms part of a broader package of fiscal-budgetary reforms and will be in force until 31 December 2027 (according to what the law says).
Unlike a previous, similar initiative that was struck down in 2022 for constitutional reasons, the new law has already passed constitutional review, giving it greater stability and legal weight. Moreover, it now clearly defines how the health insurance contribution (CASS) must be calculated. It also specifies who is subject to this contribution, and how it will be collected – both for Romanian and foreign-sourced pensions.
This measure aims to strengthen the fiscal sustainability of the Romanian social system. It basically introduces a new fiscal obligation for higher-income pensioners. It also raises practical questions for retirees and employers offering private and occupational pensions, and for tax consultants assisting with annual tax reporting of foreign pensions.
The new regulation is broad in scope, covering a wide range of pension income sources. According to Law no. 141/2025, CASS will apply to the following types of pensions:
In contrast, for foreign pensions, the responsibility falls directly on the income recipient. Each individual must calculate and pay the contribution themselves via the Romanian annual tax return (Form 212), which is due by 25 May of the following year.
The new health contribution for pensions will not apply to the entire pension amount. It will apply only to the portion exceeding the monthly threshold of RON 3,000.
The calculation mechanism will be as follows:
The monthly base for calculating the CASS must be established by deducting RON 3,000 from the gross monthly pension amount, for each individual pension right.
This means that in cases where a person receives more than one pension (e.g., a state pension and a private pension), each pension is treated separately. And the RON 3,000 deduction applies per pension, not cumulatively. This distinction may significantly impact the final CASS due. Thus, it should be carefully assessed.
After establishing the base, the 10% CASS rate is applied to the taxable portion. The remaining amount – after CASS deduction and deduction of the non-taxable threshold of RON 3,000 (for income tax) – is further subject to the 10% income tax.
The order of application is:
Pensioners receiving monthly pensions of RON 3,000 or less will not be subject to either CASS or income tax. Their pensions will remain fully exempt from these taxes.
These exemptions can be seen as a protective measure for retirees on lower incomes. It ensures that those most vulnerable to inflation and cost-of-living increases retain their full pension amount.
One important extension of the new rule is the inclusion of expat pensions (foreign-sourced pensions) in the scope of the health insurance contribution. Romanian tax residents receiving pensions from abroad – whether from public or private institutions – must now:
Because the health contribution for pensions paid from abroad is not withheld at source, the individual bears full responsibility for accurate calculation, timely filing, and payment. Of course, failing to declare foreign pensions may result in penalties and interest, so retirees living in Romania on foreign pensions are advised to consult with a tax consultant.
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