Government approves indexing pensions on September 1

RIGA - The government today supported indexing pensions a month earlier, on September 1, to compensate pensioners for the rising energy prices and inflation.

According to the Central Statistical Bureau, this past March the average consumer price level increased by 11.5 percent year on year. Prices of transport-related products and services increased the most, 22.9 percent, food prices rose 14.7 percent, prices of housing-related goods and services increased 14.5 percent, prices for miscellaneous goods and services increased 8.5 percent, prices of healthcare services rose 5 percent. Compared to this past February, average consumer price level increased 3.3 percent in March.

Meanwhile, the average pension in Latvia remains relatively small. According to the State Social Insurance Agency, this past March the average state pension, with supplement, was EUR 404, old-age pension was EUR 433, and disability pension was EUR 236.

Welfare Minister Gatis Eglitis (Conservatives) said that the new geopolitical situation was having an impact on all residents of Latvia. Given the high inflation, the Welfare Ministry has been working on increasing pensions.

In order to index pensions before October 1, the amount of the state pension or part thereof not exceeding 50 percent of the average wage subject to insurance contributions in 2021 will be revised on September 1, as well as pension supplements.

Pensions will be indexed based on inflation from August 1, 2021 to July 31, 2022 and part of the actual increase in the average wage subject to insurance contributions, as well as duration of employment.