Russia: Old-Age Pensions To Exceed Living Wage

2 April 2019 (09:17)

UrBC, Moscow, April 2, 2019. Russian President Vladimir Putin signed a decree to have old-age pensions paid out since January 1, 2019 adjusted to exceed the living wage; the decree is now available on the legal information portal.

According to the Finance Ministry’s estimates, this will cost the budget some RUB 15 to 20 billion.

The President first mentioned the need to reconsider the pension indexation principles and have the current pensions adjusted during his address to the Federal Assembly. Russian Prime Minister Dmitri Medvedev promised the extra payments would be made by July 1.

As of now, retired old-age pensioners whose pensions remain below the living wage get a special social benefit payment to make sure their accumulated income comes to at least RUB 8,400 (the living wage minimum). The annual inflation adjustments do not take the living wage limits into account, so every new adjustment increases a person’s pension amount but decreases the amount of the social benefits, which means people keep getting the same amount of money every month, despite the inflation adjustments.

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