Latvian Ministry of Welfare suggests increasing part of pensions at state budget’s expense

The Ministry of Welfare has outlined the so-called base pensions as one of the main priorities for Latvia’s budget for 2024. This means some pensions may receive bonuses from the base budget.
Minister of Welfare Evika Siliņa mentioned this plan in her interview to TV3 programme 900 seconds on Tuesday, the 25th of July. She also said that rumours about this year’s pension indexation allegedly turning out “negative” are untrue.
Siliņa explained that employed pensioners ceased receiving additional amounts for every year of employment as far back as 2012.

This resulted in inequality,

because the people who retired sooner are still paid extra. The ministry believes this inequality needs to stop.
“We believe this would be adequate if they were paid this bonus, and it could be called transition to base pension, and pensions could be partially co-finances from the regular budget. Currently all pensions are paid from the social budget, because they are benefits,” said the minister.
She added that partial co-financing of pensions from the base budget is necessary because of the demographic situation in the country, specifically the large number of pensioners. Payment of pensions from the general budget would prevent threats to the special social budget, added the minister.
She also said that in the context of the next year’s budget this topic may cause serious discussions,

because the amount of necessary funding is significant.

Another important challenge to tackle in the future will be old age pensions, added the minister.
In regards to pensions Siliņa rejected concerns about this year’s pension indexation potentially being negative. The minister said the law does not allow this.
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