Pensions in 2021: for whom, how much and when Business

Residents receiving early retirement pensions and social assistance benefits will experience an increase starting in February, as these benefits are paid for the previous month and not for the current month.

“As planned, the December benefits went to seniors who receive pensions on account or who receive home delivery before Christmas. And starting next year, many recipients of social security and welfare pensions will receive higher pensions ”Says Violeta Latvienė, deputy director of Sodra.

The growth of pensions will depend on seniority and units of account

Pensions increase every year: they increase on average as much as the economy and the population’s wage bill grow. In 2021, social security pensions will increase by 9.58 percent.

The average old-age pension with the required seniority is expected to reach 440 euros next year (currently 399 euros) and the average pension 411 euros (currently 377 euros). The pension of each beneficiary and its growth will be individual, since it will depend on the time of service acquired by the person and the number of pension units. Pensions for seniors will grow more.

Pension supplements are paid to beneficiaries of social security pensions who receive the lowest pensions. The amount of all pensions received by those who have the required time of service cannot be less than the amount of the minimum consumption needs. This year it reached 257 euros, and in 2021 it will grow to 260 euros.

After establishing pensions, some residents may receive a lower premium. For example, a person with the required seniority had a retirement pension of € 230 last year and it was less than € 257, so they also received a supplement of € 27 for small pensioners.

After indexation, his pension will reach 250 euros in January 2021. Then, in January, the resident will continue to receive a supplement of 27 euros for December, and from February the supplement will reach 10 euros, so the total amount of pensions and benefits will not be less than 260 euros.

Other pension benefits can also lead to a reduction in the premium. For example, if a widow’s pension is granted to a resident, the bonus is reduced or not paid if the person’s income after receiving the widow’s pension exceeds 260 euros. Next year, the basic amount of the widow’s pension will increase to 28.63 euros.

Next year, 1.2 percent. state pensions will increase. Its base will increase to 58.70 euros. This means that victims, investigators, and first- and second-degree officers and soldiers will receive greater benefits.

Higher social pensions

Sodra also administers social assistance pensions, which are not paid out of the social security fund, but out of the state budget. Social assistance pensions are received by those residents who have not acquired the minimum seniority to receive a social security pension. The base of the welfare pension will increase from 140 to 143 euros next year.

Beneficiaries of social assistance pensions who have not completed the period of service due to nursing for the disabled for at least 15 years or who have raised at least five children and provide supporting documents receive a social assistance old-age pension of 1, 5 social assistance. This amount will rise to 214.5 euros next year.

Welfare pensions are paid the previous month, so your beneficiaries will receive the same amount of benefits in January as all this year, and they will see an increase from February.

Innovations for beneficiaries of early retirement pensions

Starting next year, the changes also await the beneficiaries of early old-age pensions. Your pensions will increase not only because of indexation, but also because of a change in the percentage of reductions for early retirement in the law.

When calculating the amount of the early retirement pension, a reduction of 0.32 percent will be applied for each month remaining until retirement age. So far, a reduction of 0.4 per cent has been applied for each month remaining until retirement age and after retirement age, for each month of early retirement.

Recalculated using 0.32 percent. reduction, early retirement pensions will begin to be paid in February 2021.

Innovations also await retirees who have retired early. The old-age pensions of these residents will be recalculated without reduction due to the fact of having received an early retirement pension, if these people have received an early retirement pension of a maximum of 3 years and if their seniority at the time of early retirement has been for at least 40 years.

“No applications are required for these seniors. Recalculated and unreduced pensions will be paid no later than the end of March 2021, along with the payment of overdue pensions in January and February. Beneficiaries will be notified of this recalculation in person, through the Sodra account. by resident or by mail “, – explains Violeta Latvienė, deputy director of Sodra.

If retirees who have previously received early retirement do not meet the above conditions, their old-age pensions will be recalculated with a reduction of 0.32%. per month.

How will early retirement change?

For example, a person’s old-age pension is € 400 per month. As a result of the indexing, it will increase to € 440. If a person decides to receive an early retirement pension 5 years before retirement age, the pension will be reduced by 19.2%. (Reduction of 0.32% x 60 months remaining until retirement age). Thus, the amount of the anticipated old-age pension of said person will reach 355.20 euros.

An early retirement pension can be granted to a person who has no more than 5 years for retirement, who has accumulated the time of service necessary for an old-age pension and who has no other income, other pension benefits, unemployment insurance , part-time work, or unemployment benefits before retirement. .

Retirees who work will experience changes in the summer

The pensions of some residents will not only be indexed starting in January, but will also be renewed next year. These changes will affect the elderly and disabled people who worked and paid social security pension contributions this year.

For most of these beneficiaries, pensions will increase due to additional service time and units of account. The increase in the pension of an older worker or a disabled person will depend on the income from work and the social security contributions paid for pensions.

The new pension will begin to be paid no later than July and the arrears will be paid for the months of January to the month of renewal of the pension. It is not necessary to request the renewal of the pension.

Annuity benefits increase pension

More than 200 seniors will receive the annuity benefits of the Sodra pension along with the old-age pension. Sodra has been providing the pension annuity payment service since July of this year. Pension annuities can be acquired by those residents who participated in the accumulation of the 2nd pillar pension and reached retirement age or retired early. If the accumulated amount is 10 thousand. euro or more, the acquisition of a pension annuity is mandatory. Residents can choose from three types of annuities. Currently, the average monthly pension annuity benefit is € 75.

All residents can know the length of their service, the amount of their pension and request a pension by logging into their personal account.

There are about 615 thousand people in Lithuania. older adults, around 5,000. beneficiaries of early old age pensions, about 160 thousand. beneficiaries of disability pensions, around 30 thousand. beneficiaries of orphan’s pensions.

During 2020, around 20 thousand. old-age pensions, 6 Cerdocyon disability pensions, about 11 thousand. widowhood and orphan pensions, almost 1.5 thousand. early retirement pensions.