The Spanish government has announced that pensions in 2023 will go up, having an increase considered the largest since 2011. Being so, this measure will benefit more than 10 million pensioners, who will see their purchasing power increase. Are you a pensioner or are you about to become one and want to know about the pension increase in 2023? Then, this article is for you and for you to plan your future from now on, join us!
How much will pensions rise in 2023?
The Spanish government confirmed a 2.4% increase in pensions in 2023. The increase is the largest seen since 2011. Being so, the increase of these is based on the Pension Revaluation Index (IRP). This takes into account the evolution of prices, income and expenditure of the public pension system.
The PRA, in this sense, guarantees that pensions do not lose purchasing power. It also maintains the financial balance of the system. The government also stressed that this increase in pensions is the result of social dialogue and agreement with social agents.
The latter have supported the reform of the pension system and its objective is to guarantee the sustainability and efficiency of pensions in 2023. But not only that, it also aims to improve the quality of life of pensioners.
The government has emphasized that this increase in pensions is the result of social dialogue and agreement with the social agents, who have supported the reform of the pension system. The objective is to guarantee the sustainability and sufficiency of pensions, as well as to improve the quality of life of pensioners.
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How does the pension increase in 2023 work?
This 2023, social and passive class pension contributions, including the minimum pension, will be assessed at 80.5%. This is the average inflation of the previous year.
Pensioners with defined contribution plans, early retirees and those receiving the minimum wage continued to experience increases of 15% or more. With this increase, the average pension rose to 1,500 euros per year and the widow’s pension to 930 euros per year.
Then, a minimum of 10,963.40 euros per year will be paid to pensioners aged 65 or older. Also, 13,526.80 will be cancelled in the case of pensioners with a dependent spouse. And 12,682 euros to minors under this age who have a dependent spouse. Those who do not have a dependent spouse will be paid 10,256.40 euros.
What is the Pension Revaluation Index?
The Pension Revaluation Index (IRP) is a mechanism introduced in 2013 to update the value of public pensions. This according to the financial situation of the Social Security system.
The PRA is calculated using a formula that takes into account the evolution of the system’s income and expenses, the number of pensions and the average pension. It establishes a minimum revaluation limit of 0.25% and a maximum limit of the CPI plus 0.5%.
Pension revaluation is also an important measure to protect pensioners’ standard of living. This prevents them from losing purchasing power in the face of rising prices.
However, it also implies a high cost for the public pension system. It has been running a structural deficit for years. It is therefore necessary to seek a balance between the financial sustainability and social equity of the system.
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Will all pensions be revalued in 2023?
One of the most frequent questions asked by Spanish pensioners is whether their pensions will be revalued in 2023. The answer is yes, but not all of them and not in the same way. It should be borne in mind that the revaluation does not affect all pension classes.
Non-contributory pensions, those granted to people without resources or with disabilities, are not revalued according to the IRP. Rather, it is according to what the Government establishes in the General State Budget. For this 2023, an increase of 1.8% is planned, the same as for minimum pensions.
Neither are passive class pensions revalued, according to the IRP. These are those corresponding to civil servants. These pensions are governed by their own regulations and are updated according to the real CPI of the previous year.
In conclusion, the revaluation of pensions in Spain for 2023 will depend on the type and amount of each pension. It is expected that the lowest pensions and non-contributory pensions will rise the most, while the highest and passive class pensions will rise the least.
What will the new pension amounts look like in 2023?
According to the Ministry of Inclusion, Social Security and Migration, the increase in pensions in 2023 will be 1.8%. This means an increase of about 15 euros per month per pensioner. However, this percentage may vary depending on the type of pension and the personal situation of each beneficiary.
Minimum and non-contributory pensions will rise the most, with an increase of 2.4%. This translates into about 8 euros more per month. Meanwhile, maximum pensions will have an increase of 1.6%, which is equivalent to about 40 euros more per month.
These are the new pension amounts for 2023, according to the type of pension and the pensioner’s age:
It is important to know that these amounts may vary according to the number of annual payments (14 or 12), the percentage of the regulatory base, the degree of disability or the existence of minimum or dependent spouse supplements.
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