The Government will update the pensions in 2024, including in that calculation what would result from the legal formula if it had not been limited this year. But it does not say to what extent this change will be reflected, exactly, in the different levels of pensions.
The Executive had divided the increase in pensions into two moments: an increase in half pension at the end of 2022 paid in a single payment and another update in January 2023, which is more limited in view of what the law dictates. It is that the formula would dictate increases of the order of 8%, but instead they were up to 4.83%.
The two increases, taken together, made it possible to meet the increase that would result from the pension law for 2023, but only the January (limited) update was incorporated into the amount of the pension that will be used for future increases. In other words, if nothing was done, from 2024 the pensioners would lose out since their pension would start from a base lower than that established by law.
What the Minister of Finance announced this Monday is that, in 2024, the update will be made as if the law, in 2023, had been fully complied with.
“That means that there is no decrease in the value of 2024 and subsequent years in relation to the update value of pensions,” said the minister. Fernando Medina says that the Government has concluded that there is “necessary margin” for this total rectification.
This compensation will be independent of the review of the pension formula that the Government wants to carry out, a review that depends on the conclusions of the commission created to study the sustainability of pensions, and that must be presented at the end of the first semester of this year. . Based on these proposals, the Government “will make decisions” in “its time and manner that do not collide or have a relationship” with the compensation for updating pensions.
With respect to the correction of the update, Medina did not say how much the increases per pension ‘step’ would amount to (the update and the calculation formula depend on the values of the pensions), ignoring the various questions from journalists. An article in Público concluded that only a 10% increase would make it possible to recover the loss of purchasing power. Medina only mentioned that the compensation alone costs 1,000 million euros per year, which corresponds to an overall increase of 3.57%.
Source: Observadora
