Critical Age of Latvian Pensioners Defined 0 14

Therefore, the Ministry of Welfare of Latvia has decided to support this age group.

The proposal provides for an increase, starting from January 1 of the next year, in the value of one year of service for pensioners living in Latvia over 85 years old, for the period up to December 31, 1995, by 0.50 euros, as well as the introduction of a new supplement for service starting from January 1, 1996 (next year this will amount to 2.34 euros for one year of service, and this amount will be indexed each year).

Thus, the average pension increase overall will amount to 2.85 euros (for service before 1996 and after) for one year of service. Discussions about the basic pension have been ongoing for the last five years, and economist of the Bank of Latvia Oleg Tkachev considers this option as a compromise.

Firstly, this option is more modest compared to the initial proposal, and secondly, the introduction of the basic pension is stretched over a longer period than previously planned. It is provided that the circle of pensioners will gradually expand every three years until it reaches the age of 65, meaning that initially the basic pension will apply to all pensioners over 85 years old, and over 13 years it will be gradually assigned to all pensioners. "It is clear that the amounts of supplements are not large, but it is better this way than not at all," Tkachev believes.

Calculations of the impact on the state budget show that next year, 13 million euros will be needed for basic pensions (0.03% of next year's GDP), 14 million euros the following year, and so on. By 2051, this amount will reach 0.9% of GDP, or almost 1 billion euros.

"As for the coming years, these amounts seem realistic, such can be found in the budget," the economist believes. Of course, the proposal for the basic pension will be evaluated at the budget development stage and considered along with other requests from ministries. It is difficult to predict whether it will ultimately be approved, Diena reports.