Lithuania must raise basic pension to reduce poverty, minister says

VILNIUS - Lithuania needs to raise the basic pension in order to tackle the problem of poverty among retirees, Social Security and Labor Minister Linas Kukuraitis said on Thursday. 

"We would surely solve (the problem of) relative poverty if we invested much more money, and the preconditions are in place because (the funding of) the basic pension has been fully moved to the state budget, and it is the basic pension that everyone gets. (...) If we are to tackle poverty, we need to increase the basic pension." 

"What European experience shows is that if we want to have higher pensions, we have to provide additional financing from other taxes, not just labor taxes, as is the case in Lithuania," he added.

According to the minister, pensions have been increasing in the past few years, albeit at a lower rate than wages.  

"When wage growth begins to slow down, pensions will catch up and relative poverty (among pensioners) will be somewhat closer to that among the working population," Kukuraitis said. 

"But as long as we have a relative poverty line at the same level as the average pension, it means that half of retirees are below the relative poverty line and that is a problem. We will not be able to solve this without increased funding," he said.