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Wednesday, May 22, 2024

500 plus. Jarosław Kaczyński, PiS president, announces 800 plus – Rafał Mundry comments. How much is the 500 plus benefit worth today?

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500 plus is to turn into 800 plus. The first valorization of the benefit from the Family 500 plus program in seven years means that the value of 500 plus will again be at a similar level as in 2016, economist Rafał Mundry pointed out. In his opinion, however, a permanent 500 plus valorization mechanism should be introduced so that politicians could not scare with it and bid before the elections.

The Family 500 plus program was launched on April 1, 2016. Under the programme, families with dependent children are entitled to a childcare benefit in the amount of PLN 500 per child up to the age of 18, regardless of income.

Benefit 500 plus has not been indexed since the program was introduced. Meanwhile inflation in Poland remains at high levels. This means that de facto the benefit is worth less and less.

Inflation eats 500 plus

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What is the real value of 500 plus today? It was calculated by the economist Rafał Mundry. According to the data posted by him on Twitter, PLN 500 from April 2016 is worth PLN 339.54 today. This means that the purchasing power of the 500 plus benefit has decreased by about one-third since 2016 and today for PLN 500 we will buy about one-third less than 7 years ago.

President of Law and Justice Jaroslaw Kaczynski on Sunday however, announced the indexation of the 500 plus benefit to PLN 800. The increase will take effect from January 2024.

Mundry noted that “the first indexation of 500 plus in seven years means that the value of 500 plus will again be at a similar level as in 2016”. The purchasing power of 800 plus from April 2016 in April 2023 is PLN 543.26.

Valorization 500 plus

According to the economic analyst, 500 plus “is a political grenade launched before the elections. Politicians scare with it and bid on it.”

“It’s finally time for him to stop igniting the imagination and terrorizing politicians. It’s time to civilize him and introduce a permanent valorization mechanism, e.g. minimum wage. And deal with real problems” – assessed Rafał Mundry.

Economist Alicja Defratyka calculated that the increased 500 plus benefit will cost the budget PLN 64 billion annually. Currently, it is about PLN 40 billion.

Main photo source: Shutterstock

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