site.btaPublic Social Insurance Budget Bill Passes on First Reading

Public Social Insurance Budget Bill Passes on First Reading


Sofia, December 9 (BTA) - Parliament adopted on first reading
the 2015 Public Social Insurance Budget (PSI) Bill on 115-42
votes with no abstentions. The average pension is expected to be
319.99 leva next year, up from 308.53 leva this year.

The PSI budget will be 10.1 per cent of the GDP next year and
the income from pensions will be much below people's
expectations, Deputy Prime Minister and
Labour Minister Ivaylo Kalfin said during the debates. "Due to
demographics, the low pension for the individual pensioner makes
a lot of money for the whole system. For example, if pensions
are raised by 10 leva, it will cost the pension system some 300
million leva a year," the Minister explained.

Kalfin also said that the pension system in Bulgaria is 53 per
cent subsidized. "It is a high level for a European country.
What is the meaning of having an autonomous pension fund if
people's pensions depend on the contributions from the budget?
If we want a stable pension system, it has to be as much
independent as possible," Kalfin argued.

In the initial budget bill, the retirement age and contributory
service requirements were set to be increased by four months
every year, beginning in 2015, but the Labour Ministry
subsequently proposed that the pensionable age be increased
instead by 2 months a year.

Pensions will be adjusted as of July 1 according to the
above-mentioned Swiss rule. The maximum amount of pension or
pensions received by a single person will remain at 35 per cent
of the maximum contributory income, which means 910 leva as of
July 1, 2015. The maximum contributory income is increased to
2,600 leva from 2,400 leva.The minimum contributory income for
farmers and tobacco growers will be upped to 420 leva from the
current 240 leva.

The reference period for calculating pregnancy and birth
benefits is increased to 24 months from the current 18 months.

Movement for Rights and Freedoms (MRF) leader Lyutvi Mestan
warned of possible farmers' protests unless the parliamentary
majority reconsider its intention to increase the minimum
contributory income for farmers.

Former Labour Minister Hassan Ademov (MRF) questioned the effect
of the extended reference period for calculating child birth
benefits and said it will only reduce women's social protection
while producing no tangible fiscal effect.

Reformist Bloc co-chair Radan Kanev said that his group's
support for the PSI budget is hinged on the Social Minister's
promise for very serious reforms in the pension system from the
start of 2015. "I agree that the 4-month increment for
increasing the pensionable age is quite a brave step but at the
same time I am strongly opposed to a new freeze of this
measure," he commented. He argued that an acceptable compromise
and the right solution would be a 2-month increment of incerase
combined with a long-term strategy for pension reforms.

The Reformist Bloc co-chair believes that the sectoral minimum
contributory incomes cannot stay the same across the country
much longer.

He called for stepping up control on pension insurance
compliance.

The Reformists are in favour of increasing the minimum
contributory income for farmers.

Mariana Todorova of ABV said that they are supportive of the
proposed budget but are not without criticism - and will propose
changed before the final voting. "We will propose a slower
increase of the pensionable age and length of service," she
said.

They will also support an idea of the trade unions for
criminalizing the evasion of social insurance. They believe it
is wrong to increase the reference period for calculating
maternoty benefits.

The MPs cut short the time period between the initial and final
voting of the budgets of the National Health Insurance Fund and
the Public Social Insurance, to make sure they can be adopted
before Christmas. This was proposed by the chair of the
parliamentary budget committee, Menda Stoyanova, and only
BSP-Left Bulgaria were opposed.