September 29, 2023

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The budget revealed the exact percentage of the pension increase

The budget revealed the exact percentage of the pension increase

It is expected that the rate of increase in pensions will rise to about 7.7%, as the inflation rate in the country is estimated at 9.9% for 2022 and 5.6% of GDP, according to the submitted budget.

It is noted that these increases are calculated on the basis of the sum of 50% of the change in the gross domestic product and 50% of the change in the consumer price index. Meanwhile, the procedure for increasing pensions every year is determined by the draft law of the Ministry of Labor that has been submitted to Parliament.

According to the relevant provisions, pensions will be adjusted based on the price index and GDP increase, as well as the pension payment procedure.

In particular, the Joint Decision of Paragraph A of Paragraph 4 of Article 14 of Law 4387/2016 (A ’85), regarding the determination by joint ministerial decision of the total amount of the pension that increases from 1.1.2023 by year, until December 31 of the previous year based on Based on the data contained in the state budget advisory report.

The differences between the data of the State Budget Advisory Report and the corresponding data published by Statistical Hellenic are taken into account when determining the factor of pension increase in the decision regarding the next year and are imputed.

This means that the increase that will be determined in the indicative budget report will be awarded with the pensions for February 2023 at the end of January 2023. In the event of a discrepancy with the data for the year that ELSTAT publishes every fall of the following year, this discrepancy will be due to the increase in pensions for the next year .

By a joint ministerial decision on the total amount of the pension that increases from 1.1.2023 annually, it is issued until December 31 of the previous year based on the data contained in the indicative report of the state’s general budget.

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The data processed by EFKA showed that out of 2.4 pensioners, 931,631 maintain a significant personal difference. Of those, through accounting offsets, 88% will receive increases while the remainder will see their personal difference decrease in order to pave the way for increased expenses in the coming years.

– For the main pensions of 500 euros, the personal difference must not be more than 35 euros in order to be entitled to increases, while those with a larger personal difference will only see an accounting increase.

For basic pensions of €700, the personal difference must not exceed €49.

It should be noted that the personal difference is the result of the main pension that retirees receive, recalculated, with respect to the replacement rates established in May 2016 by the “Catrugalo Law” (No. 4387/16). Retirees continued to receive the same pensions, but the new result was marked by the personal difference. Now, with the increases that will be given in some cases the personal difference will be zero, while in others it will simply be reduced. However, in all cases, this will affect the final amount of the increase

At the same time, the jump in inflation to 9.8% to 10%, from 9.1% that was recorded in the draft budget, as well as the increase in GDP to 6% in the current year leads to an upward trajectory in the increases in pensions calculated on the basis of numbers. concerned economic. Thus, inflation leads to an 8% increase in pensions, 7.5% of which are due to be paid in January (with February pensions) and 0.5% in the fall, although the financial staff does not exclude discussing the possibility of giving the increase in full at the end of January (January) next, the increase will be applied to both the national and contributory pension.

Based on these data, five categories of pensioners are formed in terms of their sources of support:

1. An increase of up to 7.5% -8% will be received by 1.7 million retirees. The 80-%-85% will get the full 7.5% raise while the 15% will get a smaller raise which according to EFKA’s sources will be no less than 6.5% depending on how much the personal difference is.

2. 841,717 retirees benefit from the abolition of the special solidarity tax. The average earning is 120 euros per year. We note that among the number of beneficiaries of the abolition of the solidarity tax, there are 525,456 retirees who maintain a large personal difference.

3. On December 20, 265,367 pensioners will receive an aid of only €250.

4. The fourth installment of the increase generated by the Frutsy Law will be received at the end of December, with January 222,570 pension with life insurance over 30 years.

5. The “losers” in aid are the 140,000 pensioners who will not receive money from any source.

From the analysis of the AADE files sent to EFKA, it appears that almost half of the beneficiaries of the increase, 815,605 pensioners (48.5%) have an income of up to 600 euros per month (gross), while 405,822 pensioners (24.13%) have an income of 600.01 to 900 euro. The vast majority of the beneficiaries of the increase, 1,353,270 pensioners, or 80.4%, have a monthly income of up to 900 euros in total.

It is noteworthy that the category of fortunate retirees, who will be boosted twice or even three times, are the ones who will benefit in addition to the increase from the cancellation of the solidarity contribution, the payment of the fourth installment resulting from the Vroutsis Law as well as those who will receive the exceptional financial assistance in December.

– 244,124 retirees will witness a double increase (7.5% increase and an increase by canceling the private takaful contribution).

– The triple increase (an increase of 7.5%, an increase by eliminating the Special Solidarity Tax and the fourth annual increase of Vroutsis) will see 97,415 retirees.