Inflation rise doubles pension bill for 2005

15th December 2004, Comments 0 comments

15 December 2004, MADRID-The Spanish government will have to pay EUR 1.8 billion in pensions next year to compensate for the rise in inflation this year.

15 December 2004

MADRID-The Spanish government will have to pay EUR 1.8 billion in pensions next year to compensate for the rise in inflation this year.

The figure will be almost double that which the government paid out in pensions last year, EUR EUR 943m.

The move will compensate for the intern-annual rise in inflation of 3.5 percent this year – 1.5 percent higher than the official estimate of two percent.

The Socialists changed pension legislation earlier this year, tying payments closer to inflation.

Javier Caldera, the minister for work and social affairs, said the cash would be paid to compensate pensioners for the rise in prices and to ensure that pensions had the same purchasing power.

The government will pay the extra pension cash to 8.3m pensioners by 31 March in a one-off payment.

Meanwhile, minimum pensions will go up by between five and 6.5 percent over the rate of inflation next year.

This means pensioners will see the biggest revaluation of their spending power in eight years.

Disabled pensioners between 60-64 will see their minimum pension guaranteed at the rate of inflation.

Pensions for couples will rise by 6.5 percent while single pensioners or those with disabled children older than 18, pensions will increase by five percent.

For non-contributive pensions – or for those who had been out of work before they retired - payments will go up by three percent.

[Copyright EFE with Expatica]

Subject: Spanish news

 

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