The update to 2023 of the Social Support Index (IAS), which serves as a reference for calculating and allocating a range of benefits, from unemployment benefits, scholarships or family benefits, is in danger of falling below the projected increase of about 8% resulting from the application of the formula to update this index: the annual inflation estimated in November (7.1%) to which 20% of the real GDP growth is added, as the average annual growth of the economy in the last two years has exceeded 3% will be. Finance Minister Fernando Medina said in parliament yesterday that the government is “evaluating this decision” to raise the IAS, according to the rules of the law.
During a hearing in the Budget and Financing Committee, PSD deputy Hugo Carneiro asked the government official whether, as the calculation of the pension update for 2023 was changed, the Executive would also “change the IAS formula, punishing those who receive subsidies”. But Fernando Medina left a vague reply, announcing that the matter was being studied, prompting the Social Democratic parliamentarian to say the IAS would face a budget cut. Then the finance minister dismissed: “You can’t draw conclusions.”
The IAS currently stands at EUR 443.2. If this benchmark for benefits increases by 8%, as required by law, the increase will go from EUR 35.4 to EUR 478.6. However, if you apply the 4.43% update that the government has introduced for pensions up to 1108 euros (2 IAS), the increase is only 19 euros to 462 euros. After all, there could be a loss of 16.6 euros here, which has a negative impact on the size and value of social benefits.
The IAS defines the minimum and maximum value of unemployment benefits, the minimum limit of sickness benefits, and the value of death or funeral benefits. The reference value of the Social Entry Income (RSI) or the amount of the Social Unemployment Benefit also depends on the IAS. Family benefits are also affected by this framework, which determines who has access and how much support. The maximum tuition is also determined by the IAS, which also serves as a reference for the household income of students applying for a scholarship.
Update stuck in regulation
The Labor Minister, who was also heard in parliament yesterday, said the value of the IAS for next year will be presented with the state budget for 2023 and then “set by ordinance from the Ministry of Finance and the Ministry of Labor.” as happens every year.”
Asked by BE’s deputy José Soeiro whether the executive would “abide by the law and update the IAS in line with inflation”, Ana Mendes Godinho said the country is “living in extraordinary times”, and therefore ” it is necessary to have the ability to weigh in order to know the most appropriate measures, it is not through immediate decisions without global assessment”.
The blocky MP insisted that the minister “provide calculations proving that the update law would blow up Social Security”. Ana Mendes Godinho reiterated that “these calculations will be presented with the state budget” for 2023.
When asked by PSD deputy Nuno Carvalho whether retirees will actually receive a pension discount in two years’ time, the official threw the answer to 2023, justifying it with the sustainability of social security: “As for 2024, we will make an assessment depending on the evolution in 2023 and the contributions of the Commission for the Sustainability of Social Security and for the diversification of financing sources to determine what happens in 2024”.
Concerning the free childcare that started this month, the minister reiterated what the prime minister had already demanded: the government will “make agreements with private sector institutions so that from January children who have no place in childcare in the social sector can get a place in the private network”. Still without data on the number of children who could not be placed in a solidarity network kindergarten, the minister claimed that “a specific email space was created so that people can inform social security when there are no vacancies”.
Public service increases
After the prime minister hinted that the benchmark for salary increases in the civil service would be 2%, well below the inflation forecast of 7.4% for this year, the finance minister did not pledge any amounts in the House of Representatives yesterday. PSD deputy Hugo Carneiro asked the minister whether the college would “abide by the updates or set 2% increases, well below inflation”.
Fernando Medina only revealed that “the government will present the proposal first-hand to the trade unions for collective bargaining,” adding that “when considering the proposal there will be three components with salary impact: the general update; progression and promotions; and improving the positioning of some careers, namely that of senior technician”. As DN/Dinheiro Vivo reported, civil servants run the risk of losing between €50 and €284 per month if the salary increase is 2% before 2023 instead of rising in line with this year’s inflation (7.4%).
Medina again defended the importance of “correct accounts” and “budget balance” so that the “government can respond to families at extraordinary times”. And he guaranteed that the executive chose to “return any additional VAT revenue” that the state hopes to collect by February and that it will be about “2480 million euros, compared to the 2400 million in aid”.
Salomé Pinto is a journalist for Dinheiro Vivo
Source: DN
