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500 plus increase. what cost. 500 plus and inflation

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The increase in the 500 plus child benefit to PLN 800 will cost the budget an additional PLN 24 billion annually. Jarosław Kaczyński, who announced the indexation of the benefit, stated that “the new financial injection will no longer threaten the return to inflationary tendencies”. Economist Alicja Defratyka is of a different opinion.

Child benefit from January 2024 500 plus is to be increased to PLN 800 – results from the announcement of the PiS president Jarosław Kaczyński. The benefit has not been increased since 2016, when the Family 500 plus program was launched.

As Defratyka calculates in social media, the increased benefit will cost the budget PLN 64 billion a year. Currently, it is about PLN 40 billion.

During his speech, Jarosław Kaczyński did not refer to the source of financing the announced increase of 500 plus.

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A 500 plus raise and inflation

In the context of the impact of benefit indexation on inflation The PiS president said: – We hope that in the new year inflation will be low, so this new financial injection will no longer threaten a return to inflationary tendencies. We took that into account.

According to Alicja Defratyka, Jarosław Kaczyński’s announcement means that “high inflation will stay with us for years”.

Kaczyński on the indexation of 500 plus: it would be pro-inflationary

Until recently, the PiS president himself also admitted that increasing the benefit could fuel the price increase. – 700 plus is a pro-inflationary move. I don’t think it was. But this does not mean that we will stop helping families – he said in June last year in an interview with TVP Bydgoszcz, referring to media reports about raising 500 plus to the amount of PLN 700. This statement is quoted by the daily “Rzeczpospolita”.

In turn, in October 2022 the PiS president also admitted that 500 plus “didn’t work” in the context of pro-demographic expectations related to the programme.

Main photo source: Shutterstock

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