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Wednesday, May 29, 2024

Second indexation of pensions and annuities. The project was submitted for consultation

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The Ministry of Family, Labor and Social Policy has submitted a draft law on the so-called second indexation of pensions for consultation. The idea is to additionally increase benefits when inflation exceeds 5 percent.

“Additional indexation (so-called intervention/periodic) is intended to protect beneficiaries (primarily retirees and pensioners receiving the lowest benefits) against the effects of a high increase in prices of consumer goods and services during the year,” it was written.

The project authors want additional valorization to be carried out from September 1when the price index of consumer goods and services in the first half of a given year exceeds 105 percent.

“Similarly to the case of annual indexation, additional indexation will consist in multiplying the amount of the benefit and the basis for its assessment, in the amount due on August 31 of the year in which the additional indexation is carried out, by the additional indexation index. The additional indexation will cover pensions and annuities granted before the date of this indexation,” it was written.

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Inflation in PolandPAP

Additional indexation indicator

The project proposes that the indicator of additional indexation should be the price index of consumer goods and services in the first half of a given year (provided it exceeds more than 105%), increased by at least 20%. real increase in average salary in the first half of a given year.

As the price index of consumer goods and services in the first half of the year, it is proposed to adopt the price index of consumer goods and services for households of retirees and pensioners in the first half of a given year or the price index of consumer goods and services in general in the first half of a given year, if it is higher than the index prices of consumer goods and services for retirees and pensioners in the first half of a given year.

The project states that in 2024 and 2025, in the event of additional indexation, it is proposed to adopt an increase of 20% in the additional indexation index. real salary increase in the first half of a given year.

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