The index consists of the actual consumer price index or inflation for the period from August 1, 2021 to July 31, 2022 and 50% of the percentage of the real increase in the amount of insurance contributions, the LETA agency was informed by the Ministry of Welfare.
This year, the amount of pensions and compensation or its part will be revised, which does not exceed 534 euros, which is 50% of the average insurance contribution salary in the country of the previous calendar year.
The entire amount of pension and remuneration will be indexed if it does not exceed 534 euros. On the other hand, for those pensions and benefits that are greater than this amount, 534 euros will be mentioned in the indexes.
The increase will depend on both the amount of pension and compensation and the applicable index. The exception is the politically repressed, people with disabilities of the first group and participants in the elimination of the consequences of the Chernobyl nuclear power plant accident, for whom the entire amount of the pension will be indexed.
Similar to the previous one, this year too, various indices will be applied in the indexation of old-age pensions, depending on the person’s accumulated insurance experience. The greater the length of insurance, the greater the index will be applied and the greater the increase in the old-age pension a person can expect.
For people whose insurance experience is up to 29 years, the index 1.2287 will be applied in the revision of the old-age pension, if the insurance experience is from 30 to 39 years – the index will be applied 1.2314, if the insurance experience is from 40 to 44 years – the index will be 1.2341 . On the other hand, if the insurance period is 45 years or more, the index 1.2369 will be applied.
For example, if the old-age pension is 370 euros, then for a senior citizen with up to 29 years of insurance, the pension will be 454.62 euros, or 84.62 euros more, from October. If the insurance period is from 30 to 39 years – the pension will be 455.62 euros or 85.62 euros more, if the insurance period is from 40 to 44 years – the pension will be 456.62 euros or 86.62 euros more. On the other hand, if the insurance period is 45 years or more, the pension will increase to 457.65 euros, or by 87.65 euros.
In August, the granted supplements to the old-age and disability pension for one year of insurance service accumulated until December 31, 1995 will also be indexed, applying the actual consumer price index and 50% of the real increase in the amount of insurance contributions.
When indexing the premium, the corresponding index will apply premiums of approximately 1.16 euros for each year of insurance service until December 31, 1995, and surcharges of approximately 1.74 euros for each year of insurance service until December 31, 1995, if the old-age pension was granted before 1996 .by December 31, or the disability pension was granted and the age required for the old-age pension was reached by December 31, 1996.
This means that the existing amount of the premium, which is currently EUR 1.16 and EUR 1.74 per year of insurance, will be revised by applying the index of 1.2287. Therefore, people who received 1.16 euros for each year of seniority accumulated until the end of 1995 will receive 1.43 euros from now on, and those who received 1.74 euros will receive 2.14 euros from now on.
For example, a pensioner who receives an old-age pension of 400 euros for a total insurance period of 45 years and a supplement of 29 euros for 25 years of work until the end of 1995, will receive an old-age pension of 494.76 euros and a supplement to the pension of 35 from October of this year. 75 euros.
Old-age, retirement, disability and survivor’s pensions and benefits granted or recalculated until July 31, 2022 will be indexed.
The purpose of indexation of pensions is to ensure the protection of granted pensions and benefits against a fall in purchasing power and to ensure that they do not lose their value.
The Ministry indicates that personal income tax (IIN) may be deducted from the total amount of pension and allowance, which reduces the amount to be paid. Pensioners do not have to do anything themselves – pension indexation will be provided by the State Social Insurance Agency and it happens automatically. The non-taxable minimum, from which IIN is not applied, is 500 euros for pensioners.
The Ministry of Welfare informs that in 2022 state pensions and compensation for the loss of work capacity and compensation for the loss of a breadwinner will be reviewed in August, but the increase obtained in the indexation for August will be paid simultaneously with the pension or compensation to be paid in September.
This means that in August pensions and benefits will be paid in the amount received so far, but in September they will be paid in an already increased amount together with the unpaid indexation increase for August.