Social Security announces a substantial increase in pensions in 2023
Good news for pensioners: payments will improve considerably from 2023. We knew that they were going to increase substantially, although the specific percentage of the increase was missing.
This data could be known this Tuesday with the publication of the CPI (consumer price index) for the month of November. It is close enough to the initial forecasts of the Government, which had placed this increase at around 8.5 percent: it will finally be 8.46 percent.
Inflation in November stood at 6.8 percent and suffered a drop of half a point compared to the previous month, which was 7.3 percent. In this way, the Executive already knows the twelve interannual inflation rates to calculate the revaluation of the pensions. The CPI is taken as a reference from December 2021 to November 2022.
Law 21/2021, of December 28, explains that these pensions of Social Security they "will be revalued at the beginning of each year with the percentage equivalent to the average value of the interannual variation rates expressed in the CPI for the twelve months prior to December".
How will the different pensions improve?
With this increase, the average retirement pension, which stood at €1,257.9, will rise from January to €1,364.4, that is, €106 more per month.
On the other hand, the widow's pension will increase from €780.64 to €846.76, while the orphan's pension will stand at €476.25, as opposed to €439.07 this year. The pension in favor of family members will go from €640.70 to €694.96 and that of permanent disability, from €1,093.13 to €1,180.78.
Regarding the minimum and non-contributory, the improvement will reach 15%. This is how the Government agreed with Bildu in the processing of budgets.
How will this increase affect the coffers of Social Security?
We will still have to wait a few days for the INE to confirm the final CPI for November. However, calculations can now be made of everything that this increase will imply for the accounts of the Social Security. The public spending of this body will rise next year by around 15,200 million.
An item for 2023 of 190,687 million is expected to cover the pensions, which is 11.4% more than this year. With this increase, the money allocated to the pensions public will concentrate 41.8% of the country's budget.
According to the estimates of the Bank of Spain, for each point of rise in inflation, spending will rise by an additional 1,800 million. However, in addition to this adjustment based on inflation, it must also be taken into account that the cost of pensions It will be higher because there are more beneficiaries.
Now the retirement of the generation of the baby boom. In addition, many of the workers who retire will earn higher amounts due to higher salaries.
decrease in inflation
The CPI data for November, which reached 6.8%, confirms the downward trend of this parameter. This implies that prices will continue to grow, albeit at a slower pace. It should be remembered that in July they reached 10.8%.
From the INE they explain "the drop in fuel and electricity prices are the causes of this evolution." So is the rise in prices for the new season of footwear and clothing, "more moderate than in 2021." Regarding the monthly variation, it stood at -0.1%, so prices fell one tenth compared to October.
What will be the increase in the Minimum Vital Income?
With the CPI percentage for November, the improvement of the Minimum Vital Income will also be known: it will be 8.46%, as was the case with the pensions.
On the one hand, for groups made up of two adults or one adult and one minor, it will go from €639.12 to €693.18. On the other hand, those groups with one adult and two minors or two adults and one minor will receive €853 instead of €786.6.
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