The Ministry of Welfare has submitted for public discussion an informational report on plans for the development of the basic pension, which provides for a gradual increase in the pension supplement for the elderly starting in 2027 and the introduction of a new supplement for insurance years from 1996, LETA reports.
The report notes that improving the pension supplement for the elderly — by increasing the supplement for insurance years until the end of 1995 and establishing a supplement for service starting from 1996 — would be a step towards the so-called basic pension. According to the ministry's assessment, this would ensure a fairer treatment of all pension recipients regardless of the time of pension assignment.
The ministry proposes to increase the value of one year of service for the supplement for service until December 31, 1995, by €0.50 for pension recipients living in Latvia who have reached the age of 85, starting from January 1, 2027, as well as to introduce a new supplement for service starting from January 1, 1996.
In the future, the circle of recipients is planned to be expanded every three years by five-year age groups: from 2030 — up to 80 years, from 2033 — up to 75 years, from 2036 — up to 70 years, and from 2039 — up to 65 years.
The ministry suggests starting with the oldest seniors, as the State Social Insurance Agency reports that the lowest pensions in February 2026 were indeed for individuals aged 85 and older.
The report also indicates that the supplement has not yet been assigned to 22% of pension recipients — people whose pensions were assigned between 2021 and 2026 and who have insurance years until the end of 1995. These individuals are planned to receive the supplement in 2027–2028.
To avoid creating excessive pressure on the main state budget, the increase in the supplement for service until December 31, 1995, and the introduction of a new supplement for service after January 1, 1996, is proposed to be implemented gradually.
According to the ministry's estimates, the additional expenses from the main state budget will amount to €13.4 million in 2027, €34.8 million in 2030, and by 2039, when the measure will apply to all pension recipients aged 65 and older, will reach €400.1 million.
The report states that in 2027 these expenses will account for 0.03% of the gross domestic product, and in 2051 — 0.9% of GDP.
To implement the initiative, amendments to the Law on State Pensions and several other laws related to years of service and social insurance will be required.
The ministry notes that the main challenge of Latvia's pension system now lies not only in financial but also in social sustainability, as the sizes of pensions and their replacement levels lag behind the average levels in the countries of the Organization for Economic Cooperation and Development and the European Union. The share of workers in the total population continues to decline due to low birth rates and emigration, society is aging, and life expectancy in retirement is increasing, so an ever-decreasing number of workers will have to support an increasing number of pensioners in the future.
According to the ministry, this will affect the size of pensions in the long term, which tends to decrease, while the accumulations of the second and third pension levels, although they mitigate the impact of demographic factors, are subject to financial risks.
In this regard, the ministry proposes to make a decision on additional support for elderly individuals that will not be directly dependent on demographic indicators or economic cycles, while maintaining fairness and motivation to fully participate in the social insurance system. The improvement of the supplement is viewed as a step towards a "basic" pension that ensures equal treatment for all pension recipients regardless of the time of its assignment.
Currently, there are two sizes of supplements depending on the year of pension assignment. For pensions assigned before December 31, 1996, the supplement for one year of insurance service accumulated until the end of 1995 is €2.58. For pensions assigned from January 1, 1997, it is €1.72 for each year of service until the end of 1995. The size of the supplement is indexed annually in October based on the actual consumer price index and 50% of the real growth of the wage fund from which insurance contributions are paid.
According to the ministry, in February of this year, the average size of assigned pensions for the elderly was €640.67, and with the supplement — €679.21. The highest pensions were in the age group up to 69 years — on average €698.85 (€708.32 with the supplement), while the lowest were for seniors aged 85 and older: €503.71 (€586.31 with the supplement).
The proposal for improving supplements was presented last year and supported by the Council on Senior Affairs, established by the Minister of Welfare, as well as in the Saeima's Commission on Social and Labor Affairs.
The public discussion of the report will last until May 5.
