hit tracker
Thursday, September 28, 2023
HomeLatest NewsPensions will rise in 2024 with the CPI even if the budgets...

Pensions will rise in 2024 with the CPI even if the budgets are extended

Date: September 28, 2023 Time: 00:48:48

Contrary to the forecasts of the main polling houses, the results of the 23-J elections left the nearest future of Spanish politics up in the air. The options that the PP manages to form a majority that supports a government headed by Alberto Núñez Feijóo are slim, while the PSOE is prudent in the face of Junts’ demands. However, with a possible electoral repetition on the horizon, the two parties maintain their commitment to raise pensions according to the average CPI of the previous year, as established in the first part of the reform promoted by José Luis Escrivá and approved by the hand of employers and unions in 2021.

The updating of pensions, which would be 3.9% according to Funcas forecasts, is blind and will have to be assumed by the 2024 General State Budget (PGE). However, the call for early elections has meant that the Executive has not started working on them, so it is expected that those in force will be extended, whether or not a new government is formed before December. But this is not an obstacle to applying the increase, as explained by the economist and professor at the University of Mondragón Julen Bollain, in conversation with La Información. “Raising pensions is an obligation that arises from Social Security and these have the condition of expandable credit, you always have to face the payment, regardless of the budgeted resources,” he explains.

In the same sense, the Executive Director of the Foundation for Applied Economics Studies (FEDEA), Ángel de la Fuente, points out that since the law (21/2021) establishes the obligation, that binds the Government. “The credit for pensions has to be expanded if the budgets of the previous year are extended and the amount allocated is not enough,” he explains, a change so that in principle it would not be necessary to develop a new regulatory text. However, remember that credit extensions must be financed and once the Contingency Fund is exhausted, it may be necessary to make adjustments to other items or declare unforeseen extraordinary income to cover this excess expense, although he believes that this scenario would be serious. a problem in the medium term and would not occur in a few months.

The Law on the guarantee of the purchasing power of pensions and other measures to reinforce the financial and social sustainability of the public pension system establishes the mandatory updating at the beginning of the year in its article 58, which establishes that the amount of of the annual revaluation of public pensions may not exceed the amount established in the General State Budget Law, although in 2023 it was decided not to establish 8.5% for contributory pensions in public budgets, but instead Instead, reference was made to the “percentage increase equal to the average value of the interannual variation rates expressed as a percentage of the Consumer Price Index for the twelve months prior to December.”

It is not the first time it happens

The union sources consulted by this means also consider that there is no inconvenience to apply this increase, even if there is a government in office in the face of a possible electoral repetition or it is necessary to extend the 2023 budgets. This is also confirmed by sources from the Ministry of Inclusion, Social Security and Migrations, who recall that this is not the first time that this situation has occurred. The general elections of 2015 in which Ciudadanos and Podemos broke in cut the support of the Government of Mariano Rajoy, who was forced to extend the PGE of 2016, 2017 and 2018, something that did not prevent public pensions from growing by 0.2 5 % each of those years.

The electoral programs prepared by the different political formations for 23-J reflected that there was a consensus among the main candidacies in terms of pensions, despite this issue being the focus of the exchange of protest between Alberto Núñez Feijóo and Pedro Sánchez, as a consequence of the “inaccuracies” emitted by each one of them. The opposition parties voted against the pension reform, however, beyond protecting their link to the CPI, they did not detail what plans they would have in place if they managed to form a government, since they linked the reform to the analyzes that could carry out the Airef and the Bank of Spain.

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.

Most Popular

Recent Comments