Indexation of pensions to be based on pensioner’s subsistence minimum
Consistent with the proposal made by Russian President Vladimir Putin in his annual address to the Federal Assembly on February 20, the indexation of pensions and monthly benefits will be based on the pensioner’s substance minimum. This means that the indexation will apply not to the current amount of pensions and monthly social benefits, but to the overall payments to pensioners, which are increased to the amount of the regional pensioner’s subsistence minimum with the supplementary social benefit.
The current rules require that the indexation disregards the pensioner’s substance minimum. So, every indexation increases the amount of pension and proportionately reduces the supplementary social benefit, which keeps the pension at the subsistence minimum. As a result, payments received by some pensioners do not increase after the indexation.
The proposed amendments will first increase total payments to the pensioner to the subsistence minimum and provide the indexation of pension afterwards. Pensioners will receive the indexation in addition to the regional pensioner’s subsistence minimum, and the overall payments to pensioners will exceeded the pensioner’s subsistence minimum as a result of indexation of pensions and monthly social benefits of the current year. →