The government decided on a pension increase of 4.5 percent, which is higher than justified, and the details of the government decree, which will take effect from November, have already appeared in the Wednesday edition of Magyar Közlöny. The increase - which Prime Minister Viktor Orbán previously called a matter of honor - is retroactive from January.
The pension premium will also arrive next month, the payment of which is linked by law to a GDP growth of more than 3.5 percent. According to the provision, the multiplier of the pension premium is 0.5 this year.
After Viktor Orbán announced on his Facebook page on the occasion of the International Day of the Elderly that in 2022 the government will pay an inflationary pension supplement for the second time (those entitled to it will receive it from November 10 - ed.), and the government will have the opportunity to give a pension premium again this year, the relevant provisions were published in the Magyar Közlöny late on Wednesday evening, "Retirement benefits and certain other benefits are subject to an additional increase in the month of November 2022" and "About the 2022 pension premium and one-off benefits for certain other benefits " with title.
A 4.5 percent increase, more than expected
The Prime Minister justified the inflationary pension supplement paid out for the second time this year by saying that due to the EU sanctions, the deterioration of money throughout Europe, including in Hungary, is getting worse, so the money will be transferred as quickly as possible, between November 10 and 15. Based on what was published in the gazette, it is a 4.5 percent increase, which applies retroactively from January. "The LXXXI of 1997 on social security retirement benefits. Act (hereinafter: Tny.) on the basis of paragraphs (3) and (4) of § 62 from November 1, 2022, with retroactive effect from January 1, 2022 - 161 on the July 2022 supplementary increase of retirement benefits and certain other benefits /2022. (IV. 28.) In view of the provisions of the government decree - it must be increased ex officio by 4.5 percent..." - says the decision. "The benefits for November 2022 to be increased based on this decree must be paid in the already increased amount to those entitled."
And those who are entitled to pension from 2022 will receive the higher amount of pension from November.
The monetary deterioration that occurred at the end of 2021 obviously rewrote the scenario, i.e. the year 2022 started with a 5 percent pension increase instead of 3.5 percent. It is known that two additional increases have been implemented since then, but the government may prepare for another increase at the end of the year. The President of the Retired Parliament also confirms this. According to Mihály Karácsony, a pension increase of up to 10 percent may be necessary. He emphasized that the inflation between January and August, which is 10.7 percent, must be taken into account for the increase, and the expected monetary deterioration after September must also be taken into account, which, according to him, can reach 2 percent per month.
A matter of honor for Viktor Orbán
According to the quick information of the Central Statistical Office published on September 8, in the first eight months of the year compared to the data of the previous year, consumer prices rose by an average of 10.7 percent, and among retired households by 10.6 percent.
In light of this, a pension increase of roughly 1.8 percent would have been justified, which the government ultimately overachieved.
Let's add that at the end of this year, experts predict a consumer price increase of 20 percent or more, so it was no accident that the government could push the increase a little further.
This month, by the way, not only the "honorable" inflation compensation was carried out, but also a pension premium. According to the legislation, this must be paid if the annual GDP growth exceeds 3.5 percent. As the previous, optimistic prognosis of the Magyar Nemzeti Bank showed, this can be overcome.
The pension premium must be calculated by multiplying 25 percent of the amount of the November pension (up to HUF 20,000) by the number included in the current decree, which is 0.5 percent.
In a special case, if the person entitled to several retirement benefits entitled to a pension premium "or the Tny. On the basis of § 6, paragraph (4), he also receives a benefit that falls under the same category, the pension premium must be calculated based on the combined amount of these benefits".
Featured image: MTI
