“Pensions will be increased by 20 GEL in 2019 and in 2020 by 20 GEL more,” Minister of Finance Dimitri Kumsishvili said at a presentation of the 2018 state budget project today.
According to this plan, in 2019, 720,000 Georgian pensioners will be receiving a pension equal to 200 GEL per month.
The Minister of Finance presented the indexation reform of the pension, according to which pensions in the future will be increased respectively to inflation.
Changes in pension are not planned in 2018, however, the draft law on the new pension reform has been introduced to the Parliament of Georgia.
Based on the proposed reform, a fixed percentage of a person’s monthly income will be transferred to a special pension fund. The money will accumulate interest until a person reaches pension age, and they then receive the money once reaching pension age.
The reform aims to transfer the burden of providing pension funds from the state budget expenditures to citizens. It is a long-term project that will have noticeable results in 40 years or more.
Correlation between pensions and election cycles:
Increase in pensions frequently coincides with election years. Prior to the 2012 Parliamentary Elections, pension bonuses based on experience and achievements was abolished, resulting in an increase in pensions to 150 GEL.
In the period when the Georgian Dream was in power, pensions were first increased in September 2015, reaching 160 GEL. Then, pension was increased to 180 GEL prior to the 2016 parliamentary elections.
Georgia has 720,000 registered pensioners (500,000 women, 220,000 men), and their number increases by 2-3% annually. In 2018, the state budget will have to spend 1.7 billion GEL on pensions.