“The extraordinary modernization of pensions increased its weight in actual spending: in 2017, the first year of implementation, it amounted to 77 million euros, in 2018 it more than doubled, reaching 207 million euros, and in 2019 and 2020 it stabilized at 207 million euros if it were at a price of 338 1 million and 449 million euros, respectively. In 2021, there was the largest increase, with a growth of 298 million (+ 66.4%), representing 747 million euros”. The warning from the Public Finance Council, in its report on the evolution of the budget for social security and the Caixa Geral de Aposentações (CGA) in 2021.
In light of this scenario, the body led by Nazari da Costa Cabral considers that the rule for such updates should be changed, arguing that it would be better to make the rule of exceptional modernization of pensions permanent in order to make the financial management of the pension system more predictable for Social Security.
He adds, “It would always be better to have a stable legislative framework, with rules for objective and automatic application, than discretionary and dangerous intrusions by the political decision-maker which, within its limits, could jeopardize the philosophy and its ultimate objectives of the existing legal framework.”
It should be noted that in the state budget for 2021, an increase of up to ten euros for all retirees whose total pension is equal to 1.5 or less than the social support index (658.2 euros). That year, the government expected spending to increase by 99 million euros, but it increased by 298 million euros.
For this year, a new exceptional update of up to ten euros is planned, this time for pensioners who earn up to 1,108 euros (2.5 times the social support index). Retroactive payment will be made once the document approved on Friday becomes effective.
According to the CFP, social security expenditures grew by 2.7% (or 779 million euros) compared to the previous year, higher than the 0.9% projected in the state budget for 2021. This implementation still reflects the impact of some measures adopted in the wake of the pandemic crisis (around 1919 million). euros), plus increases in pension spending. This increase of 474 million euros (or 2.6%) is “mainly justified by the higher expenditures related to the extraordinary part of the modernization of pensions”.
The value goes up but the number goes down The report also indicates that the average value of pensions granted in 2021 by Caixa Geral de Aposentações increased by 38 euros, to 1,336 euros, however, the number of new retirees decreased.
This increase in terms of values is mainly due to the new pensions granted to pensioners and pensioners from the central administration, which represented 42.3% of the total new pensions and pensions granted by the General Assembly in 2021 and whose average value was 3,040,040 euros.
The average number of retirees recorded a decrease of 718 last year compared to 2020, a total of 481,078 “due to the combined effect of 2,119 fewer disability pensions and 1,401 more than old-age pensions and other reasons.”
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