Despite the Government’s efforts to balance Social Security accounts at forced marches, the public pension system still shows symptoms of budgetary imbalance, although there has been a substantial improvement since 2018 , and with special intensity since the past 2020. With all this, according to the calculations of the experts in the field, for the next 2022 it would still be necessary to reduce by 0.51% the expense in benefits so that the System is balanced .
Transferred to the field of benefits, it would mean that the 9.8 million benefits currently in force in our country with an average amount of 1,033 euros per month should cut 5.2 euros per month from their payrolls, or almost 75 euros in the whole of the year so that the Social Security reaches the budgetary balance next year.
This is the conclusion that is drawn from the calculations made by the Research Group on Pensions and Social Protection made up of a large group of university professors who carry out the exercise of estimating, with the formula of the famous Pension Revaluation Index (IRP) approved by the PP – which placed the revaluation cap at 0.25% in the event of a deficit in the System – but without caps, how spending on benefits should behave to sustain the budget.
“After the provisional budget liquidation of 2020, the estimated personal income tax for 2021 continued to improve and stood at -1.36%, driven by the contribution of additional income via extraordinary transfers from the State, 14,002 million (RDL 19/2020) and 6,000 million (RDL 34/2020) “, point out the study authors.
In 2021 these transfers will already be ordinary because they are included in the Social Security budget as “Transfers to comply with the first recommendation of the Toledo 2020 Pact”, amounting to 13,929 million euros. “But it is very possible that they will not be enough and will have to be supplemented with additional transfers,” says the document to which elEconomista has had access .
Thus, the value of the IRP without caps, that is, without taking into account the maximum and minimum limits that appear in Law 23/2013, would be -0.37%; better than the one calculated with caps, since in the latter case we are assuming that in 2022 and in subsequent years the IRP will be 0.25%, while in the case we are now analyzing the IRP for 2022 and subsequent years would be less than 0, 25%; specifically -0.08% in 2023, 0% in 2024, etc.
It should be remembered, however, that it is a theoretical exercise since the impact of this measure on the revaluation of payments has already been eliminated in the recent agreement between the Government and social agents for the first part of the pension reform, which includes the repeal of the personal income tax and the linking of pensions to inflation for its annual update.
Even so, the advanced IRP for the year 2022 stands at -0.51%, much better than that of 2021, which was -1.36%. “This indicates a better financial situation for the Spanish pension system due to extraordinary transfers from the State, first to offset the economic effects associated with Covid, and in 2021 as a mandate from the Toledo Pact.” Specifically, this need for financing or spending reduction will be three times less in 2022 than this year.
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