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This means that the average old-age pension would increase from € 377 this year to € 404 next year, and the average old-age pension with the required seniority from € 399 to € 428.
“Retirees and disability pension recipients are at the greatest risk of poverty, and economic opportunities allow pensions to continue to be indexed next year, despite hardships caused by the coronavirus pandemic. As the recession is already clear Lithuania’s economy is one of the smallest in the European Union, we can be optimistic about the future.
Some quite good indicators provide the opportunity to serve the weakest and pay off the debt for their long-term contribution to the well-being of society ”, quotes the press release from the Minister of Social Security and Labor, Linas Kukuraitis.
Indexing pensions for next year would require an additional LTL 249 million from Sodra and the state budget. euros.
The economic development scenario published by the Ministry of Finance predicts that this year the Lithuanian economy will contract by only 1.5 percent, and next year the gross domestic product will grow by 3.3 percent. Therefore, Lithuania’s GDP decline is one of the smallest in the European Union.
By way of comparison, in 2010 the economy contracted 14.8 percent.
The pension indexation coefficient is calculated by deducting the 7-year salary fund average. To calculate the indexation coefficient for 2021, the variation in the wage bill for 2017, 2018 and 2019 and the forecasts for 2020, 2021, 2022 and 2023 are taken into account.
Currently, the rule is that pensions cannot be indexed if GDP growth or the change in wage bill is negative in the current calendar year and beyond, but it is proposed to abandon it after considering several factors: first, the contraction of the Lithuanian economy is weak; – positive both this year and next, thirdly, retirees and the disabled are at the highest risk of poverty, and Lithuania is committed to reducing income inequality.
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