António Pedro Santos / Lusa
The Minister of State and Finance, Joaquim Miranda Sarmento
Government rejects permanent extra increases, despite doubts about its forecast of a 3.1% increase. However, Miranda Sarmento leaves the door open for a new one-time bonus.
The Minister of Finance, Miranda Sarmento, reaffirmed that the extraordinary supplement for pensioners It could be resumed in 2025, if there is budgetary margin.
The statement was made during the hearing at the Budget, Finance and Public Administration Committee, where he assured that the Government is committed to supporting pensioners with lower incomes, as long as this does not compromise the stability of public accounts.
“We will do our best to ensure that the supplement will be paid next yearwithout putting the fiscal balance at risk”, assured the minister. During the debate, Miranda Sarmento criticized the socialists, recalling that, in the past, they considered the payment of this additional amount an “economic policy error”.
Will pensions increase by 3.1%?
The Government’s calculations anticipate a 3.1% increase in the Social Support Index (IAS) and lower pensions for 2025. However, experts point out that the inflation indicator used for this projection may be overestimating the increase.
In accordance with current legislation (Law 53-B/2006), the annual update of IAS and pensions is calculated based on the average variation in inflation over the last 12 months, excluding housing, and the average annual GDP growth in the two years previous ones, explains .
Although the final data will only be known in November, the Minister of Labor and Social Security, Maria do Rosário Ramalho, stated in a parliamentary hearing that the expected increase is 3.1%, correcting a initial lapse that indicated 3.01%.
If confirmed, this increase will cover the majority of retirees with pensions of up to two IAS (1082.52 euros per month in 2024). However, the calculation basis used by the Government raises doubts. The estimate is based on the 2.6% forecast for the average harmonized inflation rate included in the State Budget, but the legal formula uses an inflation index calculated by INE, which excludes housing. In October, the average harmonized inflation was 2.5%, while the INE index pointed to 2.2%, and inflation without housing was even lower, just 2%.
If the official formula is applied, the inflation value used in the calculation can approach 2.1%, to which 0.5 percentage points are added relating to GDP growth. This would result in a final increase of about 2.6%0.5 points below what was predicted by the Government.
Government rejects opposition proposals
Given the risk of pensioners losing purchasing power, several parties presented proposals for permanent increases.
The Finance Minister rejected the PS’s proposal to grant an extra permanent increase of 275 euros to pensioners in 2025, arguing that this measure would imply a budget cost of 265 million euros and would put the country’s financial stability at risk. “This is not the time to increase pensions in a structural way, but we will be able to evaluate this possibility in the future, if the budgetary objectives are met,” he stated.
Other similar proposals, presented by different parliamentary groups, were also criticized by the government. Chega suggested an extraordinary permanent increase in pensions, which would have an impact of 945 million euros, according to the Minister of Labor, Palma Ramalho. Regarding the proposal of the Bloco de Esquerda, which proposed a structural increase of 1252 million eurosthe minister warned that the amount would seriously compromise the balance of Social Security.
The PCP’s proposal, which would involve a cost of four billion euros, was also rejected. In a critical tone, the minister quipped: “I don’t know if the PCdoB discovered an oil well at its headquarters to finance these proposals. This Government is guided by balance, and we will not give up on healthy public accounts.”
