The government will increase pensions by another four-tenths in 2023, between 4.83% and 3.89%, for the 2.7 million retirees from Social Security and Caixa Geral de Aposentação, the Labor Ministry confirmed in a statement which was sent to DN/Dinheiro Vivo yesterday. This increase yields between 1 and 20 euros at the end of the month. The Social Support Index (IAS) was also revised and increased from 8% to 8.4%, from 478.7 to 480.43 euros, plus guardianship, which will also have an impact on the level of pension updates and on the repetitive strain injury.
This increase will be applied due to an increase in inflation and GDP above the government’s projections, according to estimates released yesterday by the National Institute of Statistics (INE). “The government will update the values of the pension increases against the final values of inflation for 2022,” the note from the Ministry of Labor reads. Thus, in January 2023, the increases will be 4.83% for pensions up to 960.86 euros (twice the IAS already updated to 480.43 euros); 4.49% for installments above EUR 960.86 and up to EUR 2882.58 (six times the IAS); and 3.89% for renovations between 2882.58 euros and 5765.16 euros (12 times the IAS).
“This update has an additional cost of 110 million euros, in addition to the 1,155 million already foreseen,” emphasizes the ministry overseen by Ana Mendes Godinho, adding that “these increases will be published by regulations and will come into force with the entry into force of the National Budget 2023, on 1 January 2023”.
The update formula takes into account two indicators: the average annual inflation in November and the average GDP growth over the past two years. Taking into account that the price index change, excluding housing, was 7.46%, which exceeded the executive’s projection of 7.1%, and that the indicator measuring wealth in 2021 and 2022 was 4.78 %, above the estimate of 4.5%, the increase in pensions had to be revised, as foreseen by DN/DV. However, it should be taken into account that the final data on the price increase index, excluding housing, will not be published by INE until December 14.
Looking at the formula for calculating pensions, if the average growth of GDP over the last two years exceeds 3%, which is the case, pensions up to 960.86 euros (twice IAS already updated), then only a increase corresponding to the sum of inflation (7.46%) and 20% of GDP (0.956%), giving an increase of 8.42%, above 8%. That is about four-tenths more than predicted. The same goes for the other levels. The increase in pensions between EUR 960.86 and EUR 2882.58 (six times the IAS) would be 8.06% instead of 7.66%, applying the inflation rate plus 12.5% of GDP (0 .5975%). And installments between 2882.58 euros and 5765.16 euros (12 times the IAS) would have an increase identical to inflation, of 7.46%, instead of the 7.1% predicted by the executive . But the government tore up this formula when it paid another half pension in October. Since this bonus was just an advance on the increase for 2023, the executive discounted that portion and the update stopped between 8% and 7.1% to vary between 4.43% and 3.53%, meaning a permanent discount for future increases in pensions from 2024. .
Assuming this transitional regime, and adding about four-tenths more due to a stronger rise in inflation and GDP, we arrive at increases of between 4.83% and 3.89%, as confirmed by the executive. The installments to 960.86 euros (double the IAS) increase by 4.83% instead of 4.43%, ie an increase of about 46 euros at the most, four euros more than expected . For minimum pensions, which amount to EUR 278, the increase will be EUR 13, which is one EUR more than what was defined.
Reforms above 960.86 euros and up to 2882.58 euros (six times the IAS) increase by 4.49% instead of 4.07%. In this series of values, a pension of 961 euros will receive an increase of 43 euros, four euros more than expected; a payment of 2882.58 euros should increase by 129 euros, an extra 12 euros.
Pensioners who receive between EUR 2882.58 and EUR 5765.16 (12 times the IAS) will also receive an update on top of the initially calculated one: it will be 3.89% and not 3.53%. For example, a renovation of 2,883 euros should increase by 112 euros, ten euros more than in the previous formula, and a term of 5,765.16 euros, the ceiling from which there are no increases, will increase by 224 euros, an increase of about 20 euro .
Social Insertion Income grows to 205.59 euros
The Social Insertion Income (RSI), which has been frozen at € 189.66 since 2019, will also be updated. The ministry overseen by Ana Mendes Godinho has already stated that that minimum term will be updated by regulation in line with the valuation of the IAS. This means that the RSI rises by 8.4% to EUR 205.59.
Salomé Pinto is a journalist for Dinheiro Vivo
Source: DN
