Employers hiring pensioners already pay reduced social contributions, the Ministry of Finance (FM) told LETA, commenting on the call from the Latvian Federation of Pensioners to the Saeima to introduce tax benefits for employers hiring people over 50 starting in 2027.
The ministry noted that for employers who have employees who have reached retirement age, a reduced rate of mandatory state social insurance contributions (VSAOI) is already in effect — a total of 30.02% compared to 34.09% in general. Thus, hiring such workers is already more beneficial in terms of social payments.
At the same time, the FM emphasizes that the introduction of new tax benefits or incentives is only possible after a thorough analysis of their feasibility and effectiveness. Any new concession must be assessed objectively — taking into account the impact on the overall tax system and the state budget.
The ministry also reminds that significant changes in the application of personal income tax have already been introduced since the beginning of this year, which reduce the tax burden on labor for approximately 95% of workers with a gross salary of up to 4000 euros per month. This increases the income of the population, with the greatest benefits going to workers earning up to 2500 euros.
The differentiated non-taxable minimum has been replaced by a single fixed amount — 510 euros per month, with a planned increase to 550 euros in 2026 and to 570 euros in 2027. The non-taxable minimum for pensioners has also been significantly increased — from 500 to 1000 euros per month. Working pensioners can apply it to both their salary and pension, fully utilizing tax benefits within the tax year.
In addition, the personal income tax system has been simplified: there are now only two rates — 25.5% for incomes up to 105,300 euros per year and 33% for incomes above this amount. The minimum wage has also been raised — in 2025 it is set at 740 euros per month, with a planned increase to 780 euros in 2026.
It was previously reported that the Latvian Federation of Pensioners is calling on the Saeima to introduce tax benefits for employers hiring people over 50, including pensioners, starting in 2027. This call is outlined in a resolution sent to parliament.
The document states that in light of the aging population trend and the need to support the quality of life for the elderly, the federation proposes that the Saeima develop a state policy for the period from 2027 to 2031 aimed at maximizing the retention of working-age citizens in the labor market.
Additionally, it is proposed to consider the possibility of implementing the "three in one" principle — the presence of representatives from three generations in enterprises and institutions where at least 60 people work.
The federation also suggests, as a gesture of goodwill, to prepare amendments to the tax legislation in 2026 and to introduce benefits for employers hiring people over 50 starting in 2027. Employers could receive compensation from the state amounting to half or a quarter of tax payments if a person from this age group works part-time or quarter-time.
