An Old Horse Doesn«t Ruin the Furrow: Latvia»s Economy Will Be Strengthened by Pensioners 0 25

Employers Pay Less for Pensioners

Employers hiring people of retirement age currently pay reduced social contributions, the Ministry of Finance indicates.

For employers with pensioners, 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 PROFITABLE in terms of social payments.

At the same time, the Ministry of Finance 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.

"And Give Employers Compensation!"

Previously, the Latvian Federation of Pensioners (Federation) called 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 the parliament.

The document states that considering the trend of an aging population and the need to maintain 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 keeping working-age citizens in the labor market for as long as possible.

Additionally, it is proposed to consider implementing the "three in one" principle: representatives of 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 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 the tax payments if a person from this age group works part-time or quarter-time.