End 0.25% of pensions: they will be revalued with the average CPI "indefinitely" | Economy

End 0.25% of pensions: they will be revalued with the average CPI "indefinitely" | Economy

The Government has already heard Pact of Toledo and has interpreted how pensions should be revalued from now on. Therefore, it has decided to include a legal reform in the draft Royal Decree-Law on urgent measures of social order, which is expected to approve this Friday the Council of Ministers, to abolish forever the current factor of revaluation of pensions. This factor was approved in 2013 and limited the rise in benefits to 0.25% while Social Security was in deficit.

The General Budgets of 2018 had already suspended this factor for this year and the next and included a 1.6% pension increase for both years.

Now the Government has gone further in this Royal Decree-Law and determines "as an urgent and priority issue" the revaluation of the pensions and other public benefits in 2019 in accordance with the predicted CPI (the aforementioned 1.6%) and, in addition, incorporate a compensatory payment that equates the increase of 2018 to what real inflation has risen between December 2017 and November 2018 .

Specifically, the text states that the contributory pensions of the Social Security and the passive classes (officials) "will experience an increase of 1.6% in 2019 compared to the amount they would have had in 2018 if they had been revalued by the same percentage as the value average of the interannual percentage variation of the CPI for each of the months from December 2017 to November 2018, expressed as a decimal, which in 2018 is 1.7% ". This means that, in addition to increasing all pensions by 1.6% as of January 1, pensioners will receive a one-time payment, "before April 1," increasing the amount by 0.1% of your pension.

However, the most significant aspect of this change in the manner in which pensions are updated annually is that the Ministry of Labor modifies it "with the purpose that the revaluation formula used is the one applied indefinitely and not only for 2019". With this, the current revaluation formula is recovered before the 2013 reform -continues the text-, "as the pensioners were demanding (…) who saw that once the crisis was over, the purchasing power of their pensions continued to be gradually reduced. year after year, which seems incompatible with the Welfare State ", the Government states in this Royal Decree-Law.

On the other hand, those responsible for Social Security also give a solution to this rule to the situation of a group of workers who were dismissed before April 1, 2013 and have not been re-framed in Social Security later or were included in employment regulation files also before April 2013 and its departure is scheduled before January 1, 2020.

For these two groups, which according to the unions are formed by several thousand people, "will continue to apply the regulation of retirement pension, in its different modalities, access requirements, conditions and rules for determining benefits, in force before the entry into force of Law 27/2011, of August 1, updating the adequacy and modernization of the system of Social Security" These conditions are more advantageous since they are not affected by the hardening of the early and partial retirement of 2011 and, above all, 2013.

Finally, this standard that prepares Work authorizes a credit supplement of 1,333 million euros in the budget section "Social Security Loans for its financial equilibrium, financed with public debt".

Other labor developments

  • Iprem. The Ministry of Labor is considering increasing the Public Indicator of Income of Multiple Effects (Iprem) by 2% in 2019 to 548.60 euros per month.
  • Retirement Ertzaintza. The Royal Decree-Law that wants to approve the Council of Ministers on Friday includes an additional provision seventh that increases to 9.90%, the type of additional quotation established for the early retirement of the members of the Corps of the Ertzaintza, from 1 January 2019, "Not to proceed with said increase would be a detriment to the system's accounts", indicates the text drafted by the Social Security.


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