Although this year’s indexation of pensions will see the highest proportional increase in the past decade, it has left many recipients dissatisfied by the lack of a minimum increase value. That means that many are in fact set to receive a smaller raise than last year.
In response, the opposition-controlled Senate has proposed an amendment to reintroduce a minimum indexation value of 70 zloty (€16) per month, which had been the threshold in 2019 and 2020.
In early February the government announced that retirement and disability pensions would rise by 4.24% at the start of March – rather than 3.84%, as previously proposed – to account for an increase in living costs, as Poland faces high inflation.
That indexation would be the highest since 2010, when it reached 4.6, reports Money.pl, a finance and business news service. The record increase was 12.7% in 2001.
“This is a higher index than we assumed a few months ago,” said Prime Minister Mateusz Morawiecki, noting that the higher rate would increase the state’s outlay by 1 billion zloty (€223 million) relative to what was initially budgeted.
However, unlike in previous years, this year’s indexation does not include a minimum value. In the past two years, all pensions increased by a minimum of 70 zloty, while last year an additional rule had the very lowest payments rise by 100 zloty (€22).
This year, however, all pensions will be indexed by the same proportion. As a result, those who receive the lowest pensions will only see a rise of 51 zloty gross (€11), reports Money.pl.
Pensioners are reportedly disgruntled at the indexation quirk. In a survey for Super Express, a tabloid, 84% of 27,000 respondents said that the rise was insufficient, while 13% said that the increase was enough.
On Friday, the upper house of parliament, the Senate, moved to amend the indexation bill by introducing a minimum rise of 70 zloty, as in the previous year. The Senate can, however, be overruled by the lower-house Sejm, where the government has a majority.
Since 2019, the government has also paid an additional annual benefit – a “thirteenth” monthly pension – which last year came to 981 zloty net, and 888 zloty net in the year before that. In 2021 the additional payment will be worth 1,022 zloty net.
This year, the government will roll out an additional “fourteenth” pension, which will be paid out in the final quarter of the year. The Senate has also proposed that the payment should be the same for all retirees – at 1,250.88 zloty – rather than only granted to those with pensions below a threshold.
Last year, Poland’s government also announced special benefits – including a guaranteed minimum state pension of 2,400 zloty (€545) per month and reduced fares for public transport – for those who were active in opposition to Poland’s communist system before 1989 and who faced political persecution by the regime.
Main image credit: Kimmo Räisänen/Flickr (under CC BY 2.0)
Maria Wilczek is deputy editor of Notes from Poland. She is a regular writer for The Times, The Economist and Al Jazeera English, and has also featured in Foreign Policy, Politico Europe, The Spectator and Gazeta Wyborcza.
