Maximum pension to be increased as of January 1
New ceiling to be set at 4,932 euros from the current €4,608 as of January 1, Labor Ministry says
Pensioners at the top end of the scale (4,608 euros) will receive an increase on January 1 as the ceiling will rise to 4,932 euros.
The maximum pension is determined by the national pension, which will be at least 7% higher from January.
According to the Labor Ministry, pending the final decision, the increase will go to 1,682,116 pensioners (out of a total of 2.4 million pensioners) of all funds, regardless of the type of pension they receive.
In practice, this means that the 7% increase will bring the national pension to 411 euros in 2023, from the current 384 euros today.
In fact, the increase in the national pension will entail a number of variables which are linked to the national pension – the ceiling of the main pensions, the thresholds of the death pensions and the allowance for uninsured elderly people, which will be adjusted upward.
This means that pensioners at the highest end will also benefit from the increases.
The ceiling is set at 12 times the national pension. Therefore, as the national pension increases, the ceiling for those receiving high pensions will also increase accordingly. If some people were now receiving a pension above the 4,932 euros that the new ceiling will be set at, then they will receive the ceiling.
According to the Labor Ministry, those who start receiving their pensions in 2023 will also see increased pay equivalent to the 7% increase that active pensioners will receive from January 1.
The difference between the increases for active pensioners and those who will become pensioners from January 1 is that they are calculated using a different mechanism.
The first mechanism concerns pensions already issued. This stipulates that each year, as of January 1, the total amount of pensions will be increased by a factor based on the sum of the annual rate of change of GDP plus the rate of change of the average annual general consumer price index of the previous year, divided by two.
The second concerns pensions issued at any time in the future: The contributory part of the pension is calculated on the basis of pensionable earnings. Pensionable earnings are adjusted on the basis of the change in the average general consumer price index. In any case, the pensionable pay is adjusted up to the year preceding the year of retirement.
