Minimum income thresholds to be revised annually from 2023 pursuant to OECD recommendations

RIGA - According to recommendations issued by the Organization for Economic Cooperation and Development in its latest economic survey of Latvia, the minimum income thresholds will be revised annually from 2023, as the Welfare Ministry's senior expert Gundars Ignats told LETA.

The Welfare Ministry has been actively cooperating with the OECD experts during the preparation of the report via remote meetings, informing the OECD of Latvia's social policy and labor market policy, and discussing challenges faced by Latvia. Welfare Minister Gatis Eglitis (Conservatives) also had a meeting with a team of OECD experts in October 2021 to discuss the OECD conclusions and recommendations.

The latest OECD report recommends Latvia to step up its efforts to combat poverty, especially among elderly residents. Social safety net is still minimal in Latvia, which means that Latvia also needs to continue raising the guaranteed minimum income.

In 2021, the minimum benefits and pensions were raised, as well as the minimum income thresholds for the needy and low-income residents, and the government agreed that, effective 2023, the minimum income thresholds would be revised annually in line with the OECD recommendations, Ignats told LETA.

The OECD report also says that gender stereotypes must be further reduced and anti-discrimination regulations introduced in order to reduce the widening gender pay gap, which is one of the biggest in the European Union.

The OECD report says that the main factor affecting Latvia's long-term growth prospects is demography. The country's population has been declining for three decades, driven by net migration, low birthrate and short (albeit increasing) life expectancy.

Ignats said that the OECD supported further raising of the retirement age after 2025, automatically linking it to life expectancy, but the Welfare Ministry believes that, before making any decision on increasing the retirement age, health condition of people aged 65 and older must be carefully assessed.