The International Labor Organization proposes two scenarios regarding the incomes of low-income pensioners as part of the broader debate on reforming the Social Security Fund.
In the first scenario, it proposes that the lower the pension, the higher the social benefit should be, so as to reach the new projected level.
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In the second scenario, the formula is based on the number of years a person has contributed to the Fund; the more recognized years, the higher the total pension amount and the Low-Income Pensioner Allowance.
Actuaries provide seven examples based on 2024 data:
In the first case, a retiree with 49 years of contributions today, based on their units in the Social Insurance Fund and the Low-Income Pensioner’s Allowance to which they are entitled, receives €751.
Under Scenario 1, they will receive €866, while under Scenario 2, they will receive €905.
In the second case, also with 49 years of contributions, he currently receives 778; under Scenario 1, he would receive €882, and under Scenario 2, €905.
With 32 years of contributions and current total earnings of €752, under the changes in Scenario 1, he will receive €837, and under Scenario 2, €808, in the third case.
In the fourth scenario, also with 32 years of contributions and a current salary of €779, the first option would provide €853 and the second €808.
In the fifth scenario, with 49 years of service and a current pension of €751, Scenario 1 projects €866 and Scenario 2, €905.
For the sixth case, where the individual currently receives €785 and has 39 years of service, Scenario 1 would result in €865 and Scenario 2 in €852.
Meanwhile, in the seventh case—29 years of service and a current pension of €777—the recipient will receive either €860 or €789.
The increases will be phased in over a five-year period. At the same time, the proposal calls for a change in the eligibility thresholds for the Low-Income Pensioners’ Income Supplement: from €794 to €900 for a single person and from €1,191 to €1,350 for a couple.
Discussions on which scenario will be chosen are ongoing; however, both proposals include a safety net to ensure that no beneficiary receives less than the current total amount of their pension and the Low-Income Pensioner’s Income.
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