site.btaTripartite Cooperation Council Discusses Minimum Pension Rise, New Medical Expert Evaluation Ordinance

123 ECONOMY - TRIPARTITE COOPERATION - MINIMUM PENSION

Tripartite Cooperation Council
Discusses Minimum Pension Rise,
New Medical Expert Evaluation Ordinance


Sofia,June 6 (BTA) - The National Council for Tripartite Cooperation (NCTC) met here on Tuesday to consider draft legislation increasing the minimum pension in two steps until the end of 2017 and a Health Ministry ordinance on medical expert evaluation.

Under a Bill to Amend the 2017 Public Social Insurance Budget Act, the minimum monthly pension is to rise by 11.5 per cent from 161.38 leva to 180 leva, effective July 1, 2017, and by 11.1 per cent from 180 leva to 200 leva, effective October 1, 2017, Labour and Social Policy Minister Bisser Petkov said.

The two-step increase will boost the income of some 800,000 pensioners, whose pensions will now equal the minimum amount. Most of them receive contributory-service and retirement-age pensions, another 250,000 get invalidity pensions, and still others are recipients of survivor pensions,

According to Petkov's report, once the minimum pension is raised to 180 leva, it will apply to some 668,000 pensioners (up from 547,300 now) or approximately 31.5 per cent of all recipients of work-contingent pensions. The extra money needed to pay the new minimum pensions will add up to 8.8 million leva monthly. After the second increase of the minimum pension, to 200 leva, the number of those getting it will increase from 668,000 to 800,000 or some 37.8 per cent of the total. The cost of this rise will be 14.7 million leva monthly.

The pensioners who now get less than 200 leva monthly will receive the new minimum amount, which translates into an increase ranging from 0 to 11.1 per cent for 132,000 persons and an 11.1 per cent rise for 668,000 persons.

The total amount of expenditures on the two-step increase of the minimum pension will be about 100 million leva in excess of those planned for 2017. Petkov believes that the overcollection of revenue from social insurance contributions, reported by April 30, 2017, will make it possible to finance this larger expenditure without adjusting the State budget.

Employers and tradeunionists backed the minimum pension rise with reservations.

Confederation of Independent Trade Unions in Bulgaria (CITUB) Executive Secretary Asya Goneva noted that her organization believes that all work-contingent pensions must grow by accelerating an increase in the weight of every year of contributory service in the pension calculation formula, which is part of the consensually agreed pension reform. CITUB proposes that this weight be upped annually, from 1.2 in 2018 to 1.25 in 2019, 1.30 in 2020, etc., until reaching 1.5 in 2024.

Podkrepa Confederation of Labour Dimiter Manolov noted that the minimum pension hike upsets the ratio between pensions. "Still, we regard what is going on as a first step towards a review of the pensions' adequacy," Manolov said.

Bulgarian Industrial Capital Association (BICA) Chairman Vassil Velev said he was "understanding of the noble motives behind the increase". However, as it is limited to the minimum pension, the raise supports low skills and people underpaying social security contributions. The measure discourages the coming to light of the grey sector because payers of different contributions will get approximately equal pensions, Velev argued. In his opinion, early retirement should be curbed and the number of those employed in the economy should be increased because they are now outnumbered by retirees.

Bulgarian Industrial Association Vice President Dimiter Brankov said he supports the change only from the point of view of its social reasoning, but insisted that minimum pension recipients vary widely in their contribution to the social insurance system. "It makes more sense if the minimum pensions are financed by social assistance because many of their recipients have additional income from rent and securities," he pointed out.

Deputy Prime Minister and NCTC Chairman Valeri Simeonov said: "We, too, don't like this solution, but it is better than leaving people to languish on 161 leva [a month]."

Addressing the NCTC discussion on the ordinance on medical expert evaluation, Deputy Health Minister Miroslav Nenkov recalled that now that the Supreme Administrative Court has revoked the methodology for determining multiple-disease patients' working capacity, the experts at his Ministry took action to introduce all changes in the new ordnance so that it would stand in court. To enter into force, the ordinance has to be consulted with the Tripartite Council and to be adopted by the Council of Ministers. The trade union representatives at the NCTC did not object to the provisions of the ordinance. Velev said, however, that the BICA could not possibly support a draft that will perpetuate the pernicious practices. "The concept and principles of work of medical expert evaluation need to be revised," Velev argued, expressing the employers' opinion. LI/LG
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