Premier announces 2.75% pension rise backdated a year
Pensions payments to seniors are set for a 2.75 per cent boost, with the increase back dated nearly one year, MPs heard yesterday.
David Burt, the Premier and finance minister, told the House of Assembly the rise “fully covers the overall rate of inflation, but also allows for some recognition of the specific impact on seniors on limited incomes due to the increase in food prices”.
The pensions rise is retroactive to August 16, 2021.
Mr Burt said the increase would take basic contributory pensions from $1,077.14 a month to $1,106.75, and the maximum contributory pension from $1,564.18 to $1,607.19 per month.
“As this increase will be back dated, the 10,000 residents receiving social insurance benefits will also receive a lump-sum payment of up to $473.11,” Mr Burt said.
“This increase will mean that seniors will receive between an extra $355 to $516 each year.”
The remarks came as he tabled the Contributory Pensions (Amendment of Benefits) Order 2022.
Mr Burt said the retroactive payout would cost pensions funds $4.4 million “in the short term”.
But he said the benefits hike would have “a small negative impact” on the fund in the long term, according to the Government’s actuary.
The 2018 Throne Speech included a pledge for the island’s social insurance system to switch from a fixed-rate contribution to “one based on a percentage of income”, Mr Burt said.
He added that the Contributory Pension Fund was assessed earlier this year with a review of “how to address funding gaps”.
Mr Burt said that bringing social insurance contributions in line with income would increase take-home pay for low-income workers while keeping the pension fund “sustainable for future generations”.
He added: “It is the right and proper thing to do.”
· To read Mr Burt’s statement, click on the PDF under “Related Media”.