Thursday, 31 March 2022

720,000 Croatian Pensioners To Receive One-Off Energy Allowance

ZAGREB, 31 March 2022 - Over 720,000 pensioners in Croatia with a monthly pension allowance of up to HRK 4,000 will receive a one-off energy allowance as part of government measures to alleviate the impact of increased energy prices, and it will be paid out no later than May, the Labour and Pension System Ministry has announced.

Pensioners with a monthly pension allowance of up to HRK 1,500 will receive the highest amount - HRK 1,200. Those with a pension allowance of between HRK 1,500 and 2,000 will get HRK 900, those whose pension allowance is between HRK 2,000 and 3,000 will receive HRK 600, and those with a pension allowance of between HRK 3,000 and 4,000 will get HRK 400.

The energy allowance will be paid out per person and not per household, the ministry noted.

A total of HRK 480 million was allocated for this measure. The package of measures to mitigate the impact of increased energy prices, worth nearly HRK 5 billion, enters into force on 1 April.

Pensioners who receive a foreign pension allowance in addition to their Croatian allowance should report the amount of their foreign allowance to the Croatian Pension Insurance Fund (HZMO) no later than 30 June, so that they can be paid out the energy allowance in July.

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Tuesday, 8 February 2022

SDP Proposes Inflation Bonus for Pensioners

ZAGREB, 8 Feb 2022 - Social Democratic Party leader Peđa Grbin on Tuesday presented a proposal designed to help alleviate the impact of growing inflation on pensioners in the form of a pension allowance bonus for allowances amounting to less than HRK 4,000, proposing also adjustment of pensions to wage and inflation growth.

"Croatian pensions are low and at a time of growing inflation they become even lower, which requires action. The government is late with responding, it first capped fuel prices for two months, which was insufficient, and now it has to cap them again at a higher amount," the SDP leader told a news conference.

Long and short-term measures for pensioners

Other countries introduced measures to alleviate the inflationary effects of euro adoption a year before adopting the euro, while in Croatia a bill on euro adoption is still under public consultation, Grbin said.

"We cannot expect its entry into force before April, and neither can we expect before that date measures that should cushion the inflationary blow to citizens," he said, proposing two measures to help pensioners.

One is a long-term measure envisaging a change of the model of adjusting pensions to wage and inflation growth, and the other is a short-term measure in the form of an inflation bonus.

SDP MP Branko Grčić said the current adjustment of pensions did not follow wage growth. Five years ago, when the incumbent government took over, the average pension accounted for around 40% of the average wage while now it accounts for less than 37%, he said.

Grčić said that if inflation growth was higher than the growth of wages, pensions should be adjusted 100% to the inflation rate, and if the wage growth was higher, pensions should be adjusted to the wage growth rate.

Average pension could drop below 30% of average wage

Had this model been used over the past five years, the average pension, which now amounts to HRK 2,645, would have been HRK 200 higher, Grčić said, warning that if the current model of pension indexation was not changed, the average pension would fall below 30% of the average wage in the next 10-15 years.

SDP MP Boris Lalovac believes that the parliament can introduce the inflation bonus already this month so that pensioners can receive it in April.

"The government has said it will give a HRK 200 bonus only to pensioners with guaranteed minimum allowances, and there are around 60,000 such pensioners. We believe that the scheme should be expanded... to cover around 850,000 pensioners whose pension allowance is below HRK 4,000, which would cost up to HRK 700 million," said Lalovac.

The SDP proposes that pensioners whose allowance is below HRK 1,500 should receive a one-off bonus in the amount of HRK 1,200, those whose pension amounts to HRK 1,500-2,000 should get a HRK 1,000 bonus, those with pensions ranging from HRK 2,000 to 3,000 should receive a HRK 600 bonus, and those with pensions ranging from HRK 3,000 to 4,000 a bonus of HRK 400.

Lalovac said that the state budget was the biggest winner at a time of inflation growth, which was why there should be no problems in securing funds for the inflation bonus for pensioners.

Everything supposed to be creative turns into corruption in Croatia

Grbin also commented on a scandal involving the falsification of the motif on the national side of the €1 coin, saying that "everything that is supposed to be creative turns into corruption in Croatia."

If the process of selecting the best designs for the national sides of euro coins had been conducted by professionals, if the profession had been consulted, this whole affair would not have happened, Grbin said, adding that not only the central bank but the government, too, was responsible, as it was quite late with the process of euro introduction.

Grbin believes the call for applications for the design of the national sides of euro coins should be repeated despite the lack of time.

Friday, 20 August 2021

Indexation of Pensions to Result in Average Increase of €9 - Večernji List

ZAGREB, 20 Aug, 2021 - The indexation of pension allowances on 1 July will lead to their rise by 2.46%, which means that the average increase will be 68.93 kuna, with the lowest pensions going up by HRK 42.77 and the the highest by HRK 180.47, the Večernji List (VL) daily reported on Friday.

Pensions are indexed twice a year, on 1 January and 1 July, to account for increases in living costs and to be adjusted to changes in the gross average monthly pay. The latest calculation of these two variables paves the way for the 2.46% increase in pension allowances as of 1 July.

In July, there were 1,143,592 pension recipients in Croatia, and the average pension was HRK 2,581.99.

17.5% increase in pension allowances since October 2016

Since October 2016, the average pension has increased by 17.5%, the Zagreb-based daily reported.

The lowest pension, HRK 1,738.48, is currently paid to 270,495 beneficiaries.

A total of 1,752 recipients get pensions in the amount of HRK 7347.17. Their allowances have increased by HRK 1,376 kuna since October 2016.

 (€1 = HRK 7.5)

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Thursday, 15 April 2021

Opposition Accuse Government of Trying to Buy Votes From Pensioners and Young People

ZAGREB, 15 April, 2021 - Parliamentary opposition parties on Thursday criticised the government's plan to pay a COVID supplement to pensioners and a tax refund to young people in the run-up to local elections as vote buying.

Arsen Bauk of the Social Democratic Party (SDP) told reporters in the parliament building that the government "has obviously sorted its priorities to ensure the best possible election result" for the ruling Croatian Democratic Union (HDZ).

"We support a COVID supplement for pensioners, even before elections. I think the Croatian democracy is mature enough and that this will not result in voters voting en masse for the HDZ," Bauk said.

Homeland Movement MP Stjepo Bartulica said that Prime Minister Plenković often expressed his disdain for populists. "I see a great dose of populism in the timing of this measure," he said.

"We are all equal in Croatia, but obviously some groups are more equal than others, especially with elections coming up. In principle, I am not against helping the pensioners, but the way in which the government runs its policies actually increases cynicism in Croatia," Bartulica said.

Bridge's Božo Petrov noted that the government had promised several years ago that the living standards and monthly incomes of pensioners would rise considerably, suggesting that the measures proposed by the government should remain permanent.

Bojan Glavašević of the Green-Left Bloc said that "the pensioners and young people, as vulnerable groups, need systematic rather occasional assistance."

Unlike the opposition, the HDZ's Ivan Ćelić disagreed that this was an attempt at vote buying for local elections. "Let me remind you that a month before elections the (SDP) government of Zoran Milanović gave away electricity vouchers of HRK 200, which can be seen in the same way as the COVID supplement," he said.

(€1 = HRK 7.5)

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Monday, 12 April 2021

Croatian Pensioners to Receive Extra Payment As COVID Relief in Coming Weeks

ZAGREB, 12 April, 2021 - Prime Minister Andrej Plenković said on Monday that an agreement has been reached with pensioners' representatives regarding COVID relief that will be paid to about 850,000 seniors in the end of April or early May.

The COVID supplements will be tax-free and not subject to enforcement collection.

"In this budget situation, we have done the most we could and hope that this one-off payment will nevertheless help our pensioners to ease their situation to some extent," said Plenković after a meeting with pensioners' associations.

The one-off supplement will be paid to relieve the consequences caused by the COVID-19 epidemic. The grant will be paid according to several categories, he explained.

The highest amount will be paid to recipients of the lowest pension allowance. Seniors receiving a pension allowance of up to HRK 1,500  will receive a one-off grant of HRK 1,200.

Pensioners with an allowance of between HRK 1,500 and HRK 2,000 will receive HRK 900 and those with a pension of HRK 2,000 to HRK 3,000 will receive HRK 600, while pensioners with an allowance of HRK 3,000 to HRK 4,000 will receive HRK 400.

Plenković underscored that supplement will be tax free, it cannot be included in any enforcement notices nor be added to any assets test that may affect free health insurance supplements.

An estimated that about 850,000 pensioners will receive the one-off payment, which will require about HRK 600 million from the state budget.

(€1 = HRK 7.569094)

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Tuesday, 9 March 2021

Labour Minister Josip Aladrović: "We Are on Right Track to Agree on COVID Pension Supplement"

ZAGREB, 9 March, 2021 - Labour Minister Josip Aladrović said on Tuesday that negotiations were underway with pensioner unions and associations about COVID supplements for retirees.

"We've had a few operational meetings and that issue is something that cannot be resolved in such a short time however, I am certain that we are on the right track for an agreement regarding a COVID supplement," said Aladrović, when asked by the press whether the talks reached a standstill.

He announced that talks on that issue would continue at the end of this week and in the coming period.

"I am certain that Croatia can become one of the countries that introduces a COVID supplement but we have to be aware on the other hand of the fiscal limits in our budget," he added.

Aladrović added that he would leave all options open,however, he is certain that good will for an agreement exists and that it is possible.

Asked whether the decision was waiting for the local election, Aladrović said that this is a supplement that is unknown in other European countries and that it cannot be brought into the context of current political circumstances and situations.

Last month during a meeting with Prime Minister Andrej Plenković, pensioner associations raised the issue of a COVID supplement and asked for just over 800,000 pensioners with a pension allowance of up to HRK 2,710 to be paid a COVID supplement of €150 (HRK 1,125).

They also proposed that about 244,000 pensioners with pension allowances between HRK 2,710 and HRK 5,000 be given a supplement of €100 (HRK 750) and for 7,200 single pensioners who receive a pension allowance of more than HRK 5,000 to be given a supplement of €50 (HRK 375).

The supplement would, according to their calculations, come to HRK1.93 billion.

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Friday, 23 October 2020

Pensioners' Associations Against Amendments to Debt Enforcement Act

ZAGREB, October 23, 2020 - The Croatian Pensioners' Union (SUH) and the National Pensioners' Convention of Croatia (MUH), dissatisfied with the amendments to the Debt Enforcement Act, recommended on Friday that enforcement of senior citizens' entire pension be made impossible.

SUH and MUH said that they were against most of the amendments as they were merely a partial solution to the debt enforcement problem so they had given their recommendations.

They recommend that debtors be allowed to repay the principal first and then the interest, otherwise they would never repay their debt.

They want the Croatian poverty line, a monthly income of HRK 2,710, to be introduced as an universal limit below which debt enforcement would not be carried out.

According to SUH and MUH, enforcement of senior citizens' entire pension should not be possible and enforcement should be limited to a quarter of their income, or the national poverty line.

The pensioners' associations also call for the enforcement proceedings to be conducted by courts instead of by notaries public, and that they become faster, cheaper and more transparent.

There are nearly 850,000 citizens aged over 65 in Croatia, and the at-risk-of-poverty rate for that age group is as much as 30.1% compared to 18.3% for general population. Single persons aged over 65 are in the most difficult situation (50.3%).

The average pension in July 2020 was HRK 2,525, which is 37.4% of the average net wage.

SUH and MUH expressed concern that the moratorium on debt enforcement had not been extended since it ended at a time when the coronavirus pandemic situation was worsening and the number of infections was rising.

Monday, 24 August 2020

Pensioners Call on Government To Restore Work Of National Council For Pensioners

ZAGREB, Aug 24, 2020 - The MUH pensioners association ad the Croatian Pensioners Union (SUH) on Monday called on the government to urgently restore the work of the National Council for Pensioners and the Elderly so that dialogue on problems faced by needy pensioners could continue.

"Dealing with the problem of a growing number of poor pensioners cannot be postponed because MUH and SUH consider it a priority issue. We propose that a more favorable formula be defined to adjust pensions in order to prevent a drastic drop of the average pension in relation to the average wage in Croatia, as the average pension now accounts for only 37.9% of the average wage," the two organizations said in an open letter to the government.

They warn that the at-risk-of-poverty threshold in Croatia is HRK 2,710. Since the average pension amounts to only HRK 2,525, that shows that most pensioners already live below the poverty line, the two organizations said.

More than 703,000 or 61% of all pensioners, not including those who have acquired their pensions in line with special rules and privileges, have pension allowances that are below the poverty line. "Every retired single, and those are mostly women, with a pension of below HRK 2,710, is officially a poor person," the two organizations say.

They recall that under a plan adopted by the parliament, pensions in the next four-year term would be increased by 10%, which would make the average pension rise to only HRK 2,777 in four years' time, and this would make the difference between the average pension and the average wage amount to HRK 4,823.

"The latest figures on pension indexation of a mere 1.41% make it clear that it will be difficult to achieve the promised adjustment. That means that pensions will continue to go down in relation to both the average and the minimum wage. By the end of the current government's term, the average pension would account for a miserly 36.5% of the average net pay," the two organizations warn, recalling that Croatia is at the very bottom of the EU rankings in terms of pensions.

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