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KrF leader Kjell Ingolf Ropstad refuses to accept the presentation of the Pensioners Association. He points out that all pensioners will have greater purchasing power this year, after taxes.
– An image of negative purchasing power will be created in 2020, but that is not correct, KrF leader Kjell Ingolf Ropstad tells NTB.
– Pensions and purchasing power calculations are complicated. But in reality, what you have left after taxes is what you have to spend, argues the Minister for Children and Families.
There was a lot of noise when the social security settlement was presented last week.
Read also: Støre on the social security agreement: – A real deterioration of living conditions
The figures showed that retirees will likely reduce their purchasing power for the fifth time in six years, this year between 0.15% and 0.2%. The assumption is that inflation will be roughly as expected.
I have extra pot
But if you include taxes in the calculation, Ropstad highlights the following main points, based on figures from the Ministry of Finance:
Also read: Social security agreement ready: towards reducing the purchasing power of pensioners
* After taxes, all types of retirees get higher purchasing power.
* The magnitude of this growth varies with the pension level. Growth is usually higher for single people and for lower pensions.
* Retirees received tax breaks in the 2020 budget and therefore fare better after taxes than before taxes.
* All types of minimum pensioners fare better than the agreement alone would indicate, because minimum pensioners are regulated higher than other old-age pensions.
* Minimum married pensioners obtain unchanged purchasing power before taxes, while minimum single pensioners obtain purchasing power increased by 1.3 percent before taxes. The reason single people perform better is that they received a special increase in their pension of NOK 4,000 from September 1 of last year.
Also read: How to save for retirement the smart way
Call for decency
The general secretary of the Pensioners’ Association, Harald Olimb Norman, reacts strongly to the Ropstad proposal.
– There must be a certain decency in what is to come, he tells NTB.
– In a social security agreement, wage growth is the starting point. It never includes taxes in a salary settlement, nor should it happen in a social security settlement, Olimb argues.
He says the government is happy to present tax arguments in other situations throughout the year, but not in relation to the liquidation of social security, which thus determines the pension.
Olimb points out that the tax increase cannot be included as an argument either. As is well known, flat tax increases affect individuals, and retirees, relatively harder with lower incomes, because they constitute a larger share of income.
Generation accounting
The reason why pensioners have weaker purchasing power development than salaried employees is a rule that came with the pension reform in 2011. It says that the pension should be regulated according to salary growth, minus 0.75 percent.
Adjusting life expectancy, that is, adjusting the old-age pension according to the life expectancy of each cohort, was another important measure.
– The purpose is to share the burden between generations to ensure that today’s pensioners increase their purchasing power, but also the opportunity to be able to pay pensions in a good way in the future, says Ropstad.
A commission is analyzing possible changes to the scheme.
It can have consequences
The social security deal may have consequences for the Storting this fall, as the FRP left government in January.
Last weekend, FRP’s national board agreed to a lawsuit to “ensure financial improvement for pensioners in this year’s budget process.” This fall, the government will negotiate with the FRP on next year’s state budget.
Utdanningsforbundet and Fagforbundet have called on the opposition in the Storting to force the government to ensure that retirees do not lose wages again.
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