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Tuesday 12.11.2019 | Name days: Kaija, Kornēlija

Welfare Ministry requests EUR 54 million for welfare priorities in Latvia

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Welfare Minister Ramona Petraviča

Next year’s welfare priorities in Latvia will require additional funding of EUR 54 million, says Welfare Minister Ramona Petraviča.

Among the ministry’s priorities are different initiatives, including the increase of minimal pensions, improvement of the pension indexation mechanism, state support for the poor who have disabled children, and others.

Petraviča admits that most likely there will not be enough funding for all priorities. This is why the first and main priority is raising minimal pensions and improving the minimal state support system.

This will require EUR 27.5 million, for which the minister is prepared to fight.

According to the minister, there are many different needs, including Latvia’s Castle of Light and the expensive bridge. There is also the need for an acoustic concert hall in Riga. Nevertheless, Petraviča believes a situation when pensioners have to survive with EUR 64 a month just because officials want bigger wages is unacceptable.

The minister notes that a conceptual agreement has been reached with municipalities in regards to raising GMI level next year from EUR 53 to EUR 64. On top of that, if minimal pensions and social insurance benefits are increased next year, it may be possible to increase GMI to EUR 99 a year after, said the minister.

She believes increasing minimal pensions is the first step for reducing poverty, because pensioners are the most at risk to the risk of poverty, especially lonely pensioners.

The minister reminds that both Prime Minister Krišjānis Kariņš has said the main goals of the government is raising welfare and reducing inequality in society in all of its forms, and President Egils Levits has outlined the need to reduce inequality and poverty in the country. Petraviča had also met with Levits when he was still a presidential candidate. During the meeting, the two officials agreed to cooperate to reduce poverty and inequality.

The minister explains that her intention is increasing minimal state pension calculation base from EUR 64 to EUR 99, adding gradation for every year of service. For example, a pensioner with 20 years of service receives a minimal pension of EUR 70. After changes, however, it will not be below EUR 128.70.

Petraviča believes raising minimal pension is compulsory because this plan has been postponed for two years.

The initiative provides for raising the social insurance benefit from EUR 64 and EUR 99 for people of pension age. For people of first group disability, it is planned to increase coefficient from 1.3 to 1.4.

The minister adds that another priority is improving the pension indexation mechanism. Talks with Latvian Pensioners Federation chairman Aija Barča have commenced in regards to this initiative.

The minister explains that improvement of the pension indexation mechanism represents a way to raise pensions. It is not enough to raise minimal wages. The minister believes it is necessary to think about raising pensions for seniors with large service record but small pensions. In 2020, improvement of the pension indexation mechanism will cost EUR 6.4 million in 2020 and EUR 36 million in 2021.

Another priority, according to the minister, is improving pension bonuses for service accumulated before 31 December 1995.

Welfare Ministry wants to establish that disabled people, families with children, including foster families, and people on full state support, as well as people with disabled children have the right to receive family state support until the age of 20 or if the child discontinues studies. Currently it is stated that the benefit until a child reaches the age of 20 is paid only if the child continues studying after reaching 15 years.

The minister notes that another EUR 1.5 million is needed to increase accessibility of social rehabilitation to help improve the quality of rehabilitation services, considering that their costs have increased.

Petraviča says it is necessary to double subsistence funds for guardians next year.

The minister stressed that a lot was accomplished last year to improve foster family care. This means, she added, that it is necessary to significantly increase funds for foster families. The same should be done for guardians – doubling subsistence funds for them.

Welfare Ministry also intends to ensure social care service recipients are able to use 15% of their pension or other benefits for their needs.

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