The third age risks extreme poverty, 48% of the elderly receive a partial pension

2023-09-05 08:13:36Biznes SHKRUAR NGA REDAKSIA VOX
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Pensioners, who do not fulfill their working years and do not manage to benefit from a full old-age pension, are increasing rapidly.

Official data from the Institute of Social Insurance show that in 2022 partial payment pensioners make up 48% of the total number of people who benefit from an old-age pension, up from 45% in 2021.

In 2022, there were 481,420 old-age pension beneficiaries across the country, of which 231,734 received partial payments.

The total number of old-age pensions in 2022 experienced an annual increase of 4.6%, but those with partial pensions increased by 12%. The faster growth of partial pension beneficiaries shows that the third age risks extreme poverty, as inflation has been high in the last two years.

The social insurance scheme allows all persons who have not completed the required years of work according to the law, to benefit from a partial old-age pension. Which means that they will receive the pension for as many years of work as they have invested in the scheme, but not less than 15 years in total.

Persons who have insurance periods are entitled to a partial old-age pension when they reach the age of 65 for men and 60 for women. According to the Social Insurance Law, they must have no less than 15 years of insurance period and no more than 35 years of insurance period and be retired from economic activity.

On the one hand, the increase of partially paid pensioners has relieved the public pension scheme from the increase in expenses, but on the other hand, a great social problem is being created with the financial stability of the third age.

Transition problems and high informality in the labor market are causing the new pensions to appear at lower values, year after year.

Experts explain that a large number of pensioners who newly enter the scheme have worked in the dark and do not meet the conditions for a full pension. This trend is also shown by the average age of working years for newly retired retirees.

Experts claim that the new pensions have begun to reflect the problem of transition, especially undeclared work. People who have paid insurance regularly and meet the criteria will have a higher income than with the old law that was applied before 2014. But people who have not paid contributions, it seems, will suffer the consequences during retirement, since payments with the new pension reform, which began to be implemented after 2014, are made on the basis of contributions.

The measure of pensions in our country is below the relative poverty line by 6.7 USD per day, about 201 USD per month.

In 2022 the median urban pension was USD 180 per month or 90 percent of the poverty line, while the median rural pension was USD 105 per month or 52 percent of the poverty line.

According to INSTAT's determinations, which are based on international methodology, a pensioner is considered poor if the monthly payment is less than half of the national average salary. Last year, by 2022, the average pension in the city reached 44.4 percent of the average net salary.