site.btaLawmakers Back Pension Changes, Party Subsidy Cuts Under Budget Extension

The removal of COVID-related supplements for newly granted pensions after July 1, a 7.8% increase in minimum pensions, and a reduction in the state subsidy for political parties were approved on Tuesday by the temporary parliamentary Committee on Budget and Finance during the second reading of amendments to the Act on Collecting Revenues and Incurring Expenditure in 2026 until the Adoption of the 2026 State Budget Act.

A proposal submitted by Progressive Bulgaria between the first and second readings of the bill to increase the government debt ceiling by up to EUR 3.8 billion pending the adoption of a regular budget was withdrawn. Committee Chair Konstantin Prodanov said that the proposal would be submitted at a later stage by the Council of Ministers in order to comply with legal requirements. Prior to the committee sitting, opposition lawmakers argued that raising the debt ceiling through an amendment to the budget extension act introduced by an individual MP would violate the Public Finance Act.

Under the draft legislation, the BGN 60 COVID supplement will no longer be included in the pensions granted to individuals retiring on or after July 1, 2026. To avoid reducing existing pension payments, the supplement will remain part of pensions awarded before that date. However, the BGN 60 amount will no longer form part of the base used for annual pension indexation under the Swiss formula and will continue to be paid at the June 30, 2026, level.

The bill’s sponsors said that the COVID pension supplement was introduced as a temporary measure during the pandemic, which ended in 2023, but has become a permanent component of pension payments. They argue that this represents a significant departure from the contribution-benefit principle that underpins Bulgaria’s pension and social security systems. According to the sponsors, the measure is expected to generate savings of approximately EUR 5 million per month through the end of the year.

The amendments provide for a reduction in the state subsidy granted to political parties for each valid vote received. Effective April 30, 2026, the subsidy would be cut by EUR 1.09 to EUR 3 per vote. The sponsors estimate that this will save approximately EUR 2.2 million in 2026.

The legislation further seeks to ensure that, even under a budget extension, retirees receiving the minimum old-age pension can benefit from the annual pension indexation scheduled for July 1. Their pensions would be increased by 7.8% under the Swiss formula, in line with all other labour-related pensions in Bulgaria.

As a result, more than 800,000 pensioners receiving the minimum would see their monthly benefit rise to EUR 347.51 when July pensions are paid, without having to wait for the adoption of a regular 2026 budget.

The proposed changes address a legal inconsistency whereby all labour-related pensions must be indexed annually from July 1 under the Social Insurance Code, while the minimum pension level is set through the annual Public Social Insurance Budget Act. Under a budget extension, however, the minimum thresholds from 2025 remain in force, making such an adjustment impossible without legislative amendments.

Responding to criticism from opposition MPs that removing the COVID supplement for new retirees and excluding it from the annual indexation base was inappropriate, Prodanov argued that these measures were a direct consequence of the actions and inaction of previous administrations.

He added that the government would continue to support the most vulnerable members of society, but that such assistance should be provided through the social welfare system rather than through the pension system.