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This means that the average old-age pension would go from 377 euros this year to 404 euros next year, and the average old-age pension with the time of service required – from 399 to 428 euros, the Ministry of Social Security and Labor reported to the portal tv3.lt.
Thus, according to the ministry, the average pension could increase by 27-29 euros. However, lower pensions generally increase less after indexation and higher pensions increase more, depending on length of service and units of account.
Incidentally, the Ministry of Finance predicts that the average salary (before taxes) should increase by about 6.5 percent this year. up to EUR 1,380. Consequently, pensions would grow slightly faster than wages from the beginning of next year.
“Retirees and disability pension recipients are at the highest risk of poverty, and economic opportunities allow pensions to continue to be indexed next year, despite hardships brought on by the coronavirus pandemic.
As it is already clear that Lithuania’s economic recession is one of the smallest in the European Union, we can be optimistic about the future. Good indicators provide the opportunity to care for the weakest and pay off the debt for their long-term contribution to the well-being of society ”, the Minister of Social Security and Labor, Linas Kukuraitis, is quoted in the report.
Indexing pensions for next year will require an additional 249 million LTL 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%, and next year the gross domestic product will grow by 3.3%. Therefore, Lithuania’s fall in gross domestic product (GDP) 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.
Judging from the position presented by the Ministry, a bill should be submitted to the Seimas in the near future that would repeal the provision that prohibits the indexation of pensions in the event of a negative change in GDP for the current year.
According to Sodra, almost 611,000 people currently receive an old-age pension. population, and the loss of the ability to work – another 131 thousand. population.
Not having the necessary 15 m. The duration of service of the pension insurance receives an average old-age pension of € 210, and the required duration of service pays an average old-age pension of € 400.
The average disability pension is almost € 300 and the disability pension is almost € 245.
From the beginning of this year to the end of July, Sodra raised 2,064 million. 2,025 million euros in pension insurance premiums and disbursed payments in euros. So this type of insurance has almost 40 million this year. EUR surplus.
However, by allowing victims during quarantine to not pay contributions for some time, Sodra is spending more money this year than it is raising and using the reserve accumulated over the last few years to pay all benefits on time.
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