Monday, April 22, 2024

ECONOMY | 22-03-2024 16:25

Interior Minister Guillermo Francos confirms new pension formula will come by decree

Interior Minister Guillermo Francos says pensioners will receive an increase of 12.5% next month and that new formula will be established by emergency decree.

Interior minister Guillermo Francos confirmed on Friday that the government will update pensions for inflation starting in April and that the new formula will be applied by emergency decree. He also confirmed that a 12.5-percent adjustment will be applied to offset the loss of purchasing power sustained in January.

President Javier Milei's government "will come out with a new adjustment formula for pensions, which is the most we can give based on the funds available for this, the resources for pensioners have collapsed,” the official stated.

In a radio interview, Francos said that “starting on April 1, there will be an adjustment" in relation to the consumer price index and thus as from the fourth month of the year, pensions will increase by 12.5 percent for restructuring and 13.2 percent given the latest inflation rate.

“For this period from January to March, the past formula will continue to apply, plus 12.5 percent,” said the official. 

The minimum pension payment in April will be 169,401 pesos, and the maximum 1,139,908.81 pesos, reported Perfil.

According to the interior minister, “the Government is making its best effort possible right now for President Milei to continue with his objective of zero deficit."

“Pensions have been adjusted with a formula that did not reflect the full increase of inflation but did bring a rise,” Francos stated. He added that “this will be added 12.5 percent, which is the highest the Government can give."


By decree

Stating that the pension update would be finalised by decree and not by a law in Congress, the official stated that “the delay is to the detriment of pensioners."

Fiscal responsibility remains the goal, said Francos. In a later television interview, the official insisted: “We’re making our best efforts, but without compromising President Javier Milei’s commitment to achieve zero deficit."

In the new draft Milei's sweeping 'omnibus' reform law, the government proposed a pension formula with an adjustment for inflation starting in April, with an additional compensation of 10 percent for the January inflation. With the new proposed adjustment, it would be raising that level.

Party blocs open to dialogue in the lower house Chamber of Deputies have demanded a higher compensation, one contemplating what pensioners lost out in earnings to inflation in the first month of the year, 20.6 percent.

Milei's administration has chosen a much lower percentage. Francos insists that it "is the highest the government can provide” without risking its objectives.

On Thursday, the state will pay out new 70,000-peso bonus to pensioners collecting minimum pensions, a decision likely to be announced by decree in the Official Gazette. 

According to text of the decree seen by Perfil, it justifies the measure under the grounds of "the serious socioeconomic situation this country is going through," namely the "accelerated rise of the price index, especially affecting older adults with a lower income."



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