#Pension #indexation #table #increases #estimated #calculations #9.02.2024
On March 1, 2024, indexation of pensions and pensions will be carried out. We know from estimates that it will not be as high as last year, but retirees and disability pensioners can still count on a double-digit increase. How much will pensions increase in 2024? The Minister of Family, Labor and Social Policy announced that the indexation is expected to amount to at least 12.3%. How will this translate into pay raises for retirees? Tables with calculations for such an indicator are included in the gallery.
From the amendment to the Budget Act, which was carried out in June last year, we could read that the forecast indexation of pensions in 2024 will be 12.3%. This is less than in the record-breaking year of 2022, when pensions increased by as much as 14.8%. Let us emphasize that such a high indexation is not the good will of these or the previous government, but rather the result of the very high inflation we have experienced in recent months/years. Inflation is the main element of the formula needed to calculate the indexation index (the real increase in wages is also taken into account).
At the beginning of February, the Minister of Labor and Social Policy Agnieszka Dziemianowicz-Bąk (in a published answer to questions asked by MPs during Donald Tusk’s exposé in December 2023) stated that the indexation is expected to amount to at least the above-mentioned 12.3%. This would mean that the cost of indexation of pensions in 2024 will amount to over PLN 43.5 billion.
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Please note that this is still a forecast. The final indexation rate will be announced after the publication of all macroeconomic data (in February 2024).
- Good to know: On January 15, 2024, the Central Statistical Office released the latest inflation data. We already know that the so-called pension inflation for last year amounted to 11,9 proc. We presented the calculations for such an indicator HERE.
The current minimum pension in Poland is PLN 1,588.44 gross. If the indexation rate remained at 12.3 percent, the minimum pension from March 2024 would increase by PLN 195.37 and would amount to approximately PLN 1,783 gross (approximately PLN 1,623 net).
Let us recall that in recent years the government decided on an amount-percentage form of pension indexation. In the case of such an increase, people receiving lower pensions could count on a guaranteed amount of the increase (in 2023 it was a minimum of PLN 250 gross). However, there is no confirmation that this method of indexation will also be used in 2024.
It is certain that in 2024 retirees will receive age thirteen and fourteen. The thirteenth pension is paid in the amount of the minimum pension (indexed in a given year). It would therefore amount to (estimated) PLN 1,783 gross. The thirteenth pension is due to all pension recipients, regardless of how high the benefit they receive.
It’s different with the age of fourteen. This benefit, which is guaranteed by law, is also, in principle, to be paid in the amount of the minimum pension. However, the act passed in the previous parliament states that the final amount of the fourteenth pension in a given year is decided by the government (in 2023, a decision was made to increase this benefit to PLN 2,650 gross).
In the case of the 14th pension, however, not all retirees can count on the full amount. From a certain threshold (in previous years the gross amount was PLN 2,900), it is reduced on a zloty-for-plony basis.
Second indexation in 2024. Prime Minister Donald Tusk announced that money for the second indexation is guaranteed in the next year’s budget. It would take place in the second half of 2024 if the inflation reading exceeds 5.0%. (a similar system already applies to the minimum wage).
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