The Council of Ministers approved on Friday a Royal Decree Law to raise 1.6% pensions and 3% minimum and non-contributory for next year, as established in the budget agreement reached between the Government and United We can.
This is what the President of the Government has indicated, Pedro Sánchez, at the last press conference after the Council of Ministers of the year, where he also made it clear that the 1.6% rise will be six tenths above the IPC forecasts for 2019.
"There will be gain of purchasing power against years of constant decline by the previous system of calculation," the president added, after stating that pensions "are a right of citizenship and not a commodity with which to do business."
Increase the minimum and non-contributory will have a cost of 384 million euros, while the rise of the rest of pensions according to the CPI for the year will be allocated 704 million euros.
Through the aforementioned decree law, which will set the maximum pension for 2019 at 2,659.41 euros per month, the Executive will also repeal part of the pension reform carried out unilaterally by the Government of Mariano Rajoy in 2013, which establishes how to revalue pensions every year.
With the new formula, pensions will rise at the beginning of each year according to the expected average variation of the CPI, taking into account inter-annual inflation in each of the months between December of the previous year and November of the year in which the revaluation is applied.
If at the end of the year that average value turns out to be greater than the one applied, the difference will be paid in a single payment before April 1 of the subsequent year.
Thus the pension revaluation index (IRP) implemented in 2013 is eliminated which linked its rise to the financial situation of the system, guaranteeing only a minimum annual increase of 0.25% while Social Security was in deficit.
According to this new calculation the rise for 2018 is finally 1.7%, one tenth more than what was collected in this year's Budgets, deviation that will have an approximate cost of 128 million euros for Social Security.
The absence for the moment of Budgets for 2019 has led to include also in the decree law the rise of 7% of the maximum bases of contribution to Social Security and the increase of the minimum bases by 22.3%, like the minimum interprofessional salary that was already approved in the previous Council of Ministers.
The rise of the minimum bases does not affect the self-employed, whose minimum contribution base will only grow 1.25% under the agreement reached by this group with the Government, signed this week and which will imply an increase of the minimum quota in 2019 of 5.36 euros per month.