700 000 to Benefit from Bulgarian Govt's Pensions Hike

Bulgarian Labor Minister Totyu Mladenov (left) has defended the government's approach to upping only some retirement pensions. Photo by BGNES

About 700 000 widowed pensioners in Bulgaria will be the beneficiaries of the Borisov Cabinet's decision to increase their pensions, Labor Minister Totyu Mladenov explained.

Mladenov has defended the government's approach after this week it pushed through the National Council for Tripartite Cooperation (including the government, the business sector, and the trade unions) its proposal to up the minimum monthly wage from BGN 240 to BGN 270, and to increase only the retirement pay of widowed pensioners rather that going for universal pension hike.

The changes are to be effective as of September 1, 2011, a month before Bulgaria's presidential and local elections on October 23, once they are adopted by the Cabinet and the Parliament.

According to the Bulgarian social security legislation, widowed pensioners receive 20% of the pension of the deceased spouse, and the government will increase this share to 26.5%, i.e. by one third. Thus, about 700 000 people, or one-third of the 2 million pensioners in Bulgaria, will get an increase of their monthly widow allowances by between BGN 15 and BGN 40.

"A family of two retirees receives two pensions, while a pensioner living alone has only one income, and the society needs to take better care of these people. Let us have solidarity with them. A huge number of these people – about 450 000-500 000 receive monthly pensions below BGN 250," Mladenov told bTV Friday.

Even though the minimum wage and pension hike roughly coincides with the holding of presidential and local elections in Bulgaria, the Labor Minister denies any connection insisting that the Labor Ministry has been pushing for the increase since the beginning of 2011.

Mladenov thinks that the increase of the minimum monthly salary will also lead to increasing others' incomes as well. A total of 112 000 official receive the minimum monthly wage in Bulgaria, with 92 000 being employed in the private sector.

"This will definitely affect collective labor bargaining, and will raise other incomes as well," the minister forecast.

He said that as of June 23, 2011, Bulgaria's unemployment rate was 8.7%, with 322 000 registered unemployed, 37 000 fewer than in June 2010.

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