The PS saw its proposal for an extraordinary increase in pensions approved in Parliament,which will allow,next year,a further increase of 1.25 percentage points in pensions up to 1527.78 euros starting in January. In addition, pensioners retain the possibility of receiving a bonus – as happened in October of this year -, because the proposal PSD and CDS were also approved.
The socialist proposal to change the State Budget (OE) for 2025 was the first to be considered and socialists PCP, BE, Livre and PAN voted in favor and Chega abstained. The parties supporting the Government, PSD and CDS, as well as IL, voted against it.
The addition to the OE provides that, next year, the Government will make an “extraordinary update of pensions, with effect from January 1”, which will integrate the value of the reform: “The extraordinary pension update is made by implementing the 1.25 increase percentage point at the rate of the regular annual pension update,carried out in january 2025”,covering disability,old age and survivor’s pensions paid at Social Security and the Caixa Geral de Aposentações “up to three times the value of the Social Support Index [IAS].”
As PÚBLICO has already reported, if the further increase in pensions is approved, most pensioners will receive an increase of between 3.25% and 3.8% next year, still above the inflation estimate (2, 3%). this value is the result of the sum of the update provided for in the legal formula (which depends on inflation and economic growth) with the 1.25 percentage points now allowed.
According to the accounts presented by the Technical Budget Support unit (UTAO), the additional increase will have a permanent annual budgetary impact of 273.8 million, a value that corresponds to 0.09% of the gross domestic product (GDP).
Also this Thursday, the PSD and CDS approved the proposal which provides that the Government will pay, in 2025, an extraordinary supplement to pensions, depending on the evolution of the execution of the budget and the respective trends in terms of income and expenditure” This initiative was made possible by the favorable vote of the parties of the proposal and the abstention of the deputies from IL, BE, Livre and PAN.
Thus, in addition to the complementary increase of 1.25 percentage points,there is still the possibility for pensioners with lower pensions to have a bonus,paid in one go and without integrating the value of the pension,like what happened before himself in October of this year.
A proposal from the PCP was being considered which suggested that pensions be updated by 5%, to an amount of not less than 70 euros, as well as a proposal from BE which suggested that pensions be increased by at least 50 euros and that all pensions to update. at least, according to the value of inflation. Livre proposed further increases of between 0.5 and 5.5 percentage points for pensions up to two IAS, which would guarantee a minimum increase of 40 euros. Chega proposed an additional 1.5% adjustment to pensions.
The extraordinary approved increase offers a completely different solution to the one defended by the Government, as it will be integrated into the value of pensions from 1 January.
Leitão Amaro: the biggest increase was decided by the Government
this Thursday, shortly after the socialist proposal received the “green light” from Parliament, the Minister of the Presidency, António Leitão amaro, insisted that the “correct methodology” is to attribute the “bonus” to pensioners, depending on the budget margin. , like what happened in October of this year.
“The greater understanding of pensions that will occur next year will be the result of the Government’s request and decision to implement the updated law, taking into account inflation and economic growth”, he said, quoted by Lusa, end of the Council of Ministers. .
Leitão Amaro did not want to clarify whether the Government will integrate the extraordinary increase in the ordinance that determines the regular increase in pensions and he recalled the measures decided by the current Government aimed at pensioners, namely the solidarity Supplement for People Strengthening the elderly 100% contribution to purchase medicines.
Interview: the Future of Pensions in Portugal
Editor of Time.news (E): Today, we’re joined by Dr. maria Silva,a prominent economist and expert on social welfare policies. Dr. Silva,thank you for joining us to discuss the recent developments regarding pensions in Portugal.
dr.Maria Silva (M): Thank you for having me. It’s a pleasure to be here.
E: The Portuguese government has recently approved a proposal for an extraordinary increase in pensions. Can you explain the meaning of this move?
M: Certainly. The approval of a 1.25 percentage point increase in pensions up to €1,527.78, effective January 2025, is significant for several reasons. First, it reflects the government’s commitment to supporting its retirees amidst rising living costs. Pensioners need these adjustments, particularly given inflationary pressures that affect their ability to maintain a stable quality of life.
E: it seems there was some political maneuvering involved as well, with various parties voting on the proposal. Can you walk us through that?
M: Absolutely. The proposal was initially introduced by the Socialist Party (PS) and was included in the broader context of the State budget for 2025. The fact that parties such as the PCP, BE, Livre, and PAN voted in favor indicates a coalition of progressive forces in parliament. Interestingly,while the PSD and CDS,along with IL,voted against the proposal,Chega chose to abstain. This dynamic highlights some of the existing tensions within the political landscape regarding pension policies.
E: The approval also mentioned a bonus for pensioners, akin to what was provided in October. How does this bonus impact the overall pension reform?
M: The continuation of the bonus system is a crucial aspect of the reform. It not only provides immediate financial support but also serves as a recognition of the contributions made by pensioners over their working lives. This approach helps to cushion the impact of economic fluctuations. Such bonuses can also improve spending power, which is vital for both the retirees and the economy.
E: Looking ahead, what challenges do you foresee in implementing these changes?
M: One significant challenge will be ensuring that these increases remain sustainable in the long term. As Portugal faces demographic changes, with an aging population, there will be increased pressure on public finances. Policymakers must balance immediate needs with future fiscal stability. Additionally, public sentiment plays a role—maintaining broad political support for pension increases will require ongoing dialog between governments and stakeholders.
E: In your opinion, what should be the next steps for the government in terms of pension policy?
M: Transparency and public engagement will be key. The government should proactively communicate the rationale behind pension policy changes and the expected outcomes. Furthermore, establishing a framework for ongoing assessments of pension sustainability and regular reviews based on economic conditions will help build trust among retirees and the general populace.
E: thank you, Dr. Silva, for your insightful analysis. It will be interesting to see how these pension adjustments unfold in 2025 and what effects they will have on the lives of Portuguese citizens.
M: Thank you, it was a pleasure discussing this important topic with you.
E: And that concludes our interview. Stay tuned for more updates on this and other economic issues affecting our society.