The Ministry of Finance slows down the pension supplements

The Ministry of Finance has not seen an estimate of how much it will cost to renew pension supplements for seniors who have retired from 2012, therefore it cannot comment on this proposal.

Examining the proposals for the pension law, the deputies of the Saeima Social and Employment Matters Committee today did not decide on the deputy Andrejs Klementjevs’ proposal to renew the pension supplements for all pensioners. In fact, those are two year old proposals of the Ministry of Welfare, which can’t seem to get accepted, although both the Latvian Pensioners' Federation and other organizations for seniors conceptually and verbally express their support.

One hundred thousand seniors do not receive supplements

The issue of pension supplements is important for seniors who have retired since 2012, as well as for all those who are still planning to retire. From the point of view of these benefits, pensioners are in different situations: some receive pension supplements, others do not, although both groups of pensioners have the length of service for which essentially these benefits are granted. The Ministry of Welfare prepared changes to the pension law, but the government has not approved them, as other tasks have been a priority so far.

If the supplements were renewed in accordance with the Ministry of Welfare plan, then in 2021 they would be granted to additional 20,300 old-age pensioners and 6,300 recipients of disability pensions who do not receive them at the moment. This is the number of people who retired in 2012 and 2013. The Ministry of Welfare also prepared a cost plan (according to its proposal) to determine which group of pensioners to grant pension supplements in which year.

New proposal

As the Saeima Social and Employment Matters Committee is currently working on amendments to the pension law, the Saeima deputy Andrejs Klementjevs submitted a proposal to supplement the transitional provisions of Law On State Pensions, which directly concern supplements. Namely, he proposes to include in the law a norm that pension supplements should also be granted to pensioners who have retired after 2012. The proposal contains a number of points to ensure that pension benefits are granted gradually, such as "In 2022, a supplement is granted for each year of insurance, if the pension was granted (recalculated) from January 2012 to 31 December 2014", while for those who retired from 2015, pension supplements would be granted in 2023. From 2026, all seniors who have worked before 1996 would receive pension supplements.

In a conversation with Neatkarīgā, deputy Andrejs Klementjevs reminded that for several years the commission has been considering the issue of these pension supplements and it still hasn’t moved past the discussion stage. "Why should pension supplements be less important, if they were already one of the highest priorities for the Ministry of Welfare?" asks A. Klementjevs. He has chosen 2022 as the date for this change to take effect, realizing that it would be hopeless to expect these supplements to be reinstated in next year's budget, and the timetable for renewing pension benefits is gradual so that the necessary financial resources can be planned. According to the calculations of the Ministry of Welfare, in 2022 this would require an additional 12 million euros.

Slows down because there are no calculations

Dace Trušinska, an expert from the Ministry of Welfare, pointed out that the Ministry of Welfare supports this proposal, because they went to the government with practically the same proposal as one of the priorities. However, in the Saeima Social and Employment Matters Committee, the head of the committee asked Karīna Ploka, a representative of the Ministry of Finance, for her opinion on the renewal of pension supplements for seniors. "The Ministry of Welfare cannot calculate costs for just one year, because we see that this proposal will have an impact on other years, so there must be a detailed plan for how much it will cost in all subsequent years," Ploka said. It follows from her words that the Ministry of Finance cannot give an opinion on this issue. It should be reminded that at least in a couple of meetings in the Saeima, the Ministry of Welfare has also presented three different options for renewing pension supplements, each of which had its own cost estimate… In any case, it is available to journalists.

The representative of the Ministry of Finance also emphasized that pension supplements were not the first priority of the Ministry of Welfare, because "the first was to increase the minimum income, in accordance with the decisions of the Constitutional Court, not pension supplements, and the Ministry of Finance accepted it." It should be added, however, that the execution of the Constitutional Court’s decision, which applies to the whole of Latvian society, especially to the vulnerable part, cannot be the priority of just the Ministry of Welfare, as it is the duty and task of the whole government, which has also been clearly stated by the Constitutional Court.

K. Ploka also said that it is not possible to assess 2022 now, because all issues related to the 2022 budget will have to be decided when the budget for next year will be prepared. Meanwhile, the Legal Bureau of the Saeima recommends making sure that there are funds, so that these do not become more empty promises. Pension supplements are in a vicious circle, as there may never be extra money left over for pension supplements.