President of Azerbaijan Ilham Aliyev approved the changes to the Law “On Labor Pensions”. The new change covers two important areas: the inclusion of financial assistance in pensions and the indexation of the pension of persons receiving care allowance from January 1 of next year.
Publika.az MP Vugar Bayramov said this.
According to him, the single indexation system envisages increasing the pension amounts of all our citizens receiving labor pensions in accordance with the percentage of the increase in the average monthly salary for the previous year in January of each year:
“Such changes were needed because the legislation did not provide for the indexation of all labor pensions in previous years. On the other hand, the salaries of persons whose pensions were not included in the indexation were increased every 3-5 years, as a result of which increases in the pension of persons receiving care allowance were not felt. Since their pensions were not indexed, it did not allow our citizens to benefit from this opportunity. After the adoption of new changes, our citizens will be able to use this right. For example, in 2001-2011, the ten-year indexation rate was 98 percent. In this period, a 69 percent increase was recorded in the pension of civil servants, 25 percent in judges, 59 percent in military personnel, 81 percent in special ranks, and 69 percent in judicial employees. Apparently, if our citizens had used a single indexation system during this period, a greater increase in pension amounts would have been registered. The new changes will enable our citizens to benefit from this opportunity. In this regard, with the new changes, the pension of the persons who have the right to receive a supplement due to the length of service will now increase more than the previous method, which will have a positive effect on their social welfare.
It should be noted that the indexation is carried out every year in January. This means that after the adoption of the new changes, there will be increases in all types of labor pension amounts in the first month of 2023. Due to the increase in the minimum wage this year, the average monthly wage will increase at a higher percentage than in previous years. In the first 10 months of this year, the average monthly nominal salary increased by 14.5 percent compared to the corresponding period of the previous year. This means that pensions will be indexed by about 15 percent in January next year if the current trend is maintained. Of course, a more accurate figure will be announced in January 2023.
On the other hand, the financial assistance paid to labor pensioners in 2022 (in the amount of 200 manats or 10% of the pension amount paid to persons receiving care allowance) is planned to be included in pensions and indexed from January 1, 2023. This will have a positive effect on the increase in pension amounts. It should be noted that after the 10 percent paid to the monthly pensions of persons receiving pensions under special conditions, as well as the 200 manat financial aid paid to other pensioners during the year, are included in their pensions, the final amount will be indexed according to the annual growth rate of the average monthly salary. For example, the pension amount of citizens who receive 400 manat pension and 200 manat financial assistance during the year will be accepted as 416.7 manat (400+200/12) from the new year and will be calculated with an increase of the indexation percentage. This means that the pension of our citizen who receives a pension of 400 manats will increase by 62 manats next month.”
