Minimal monthly pension will be increased to GEL 150 (about USD 90.1) next year, requiring additional of GEL 240 million (about USD 144 million) funding, Finance Minister Nodar Khaduri said on November 13.
Minimal monthly pension for 67 years old and above increased from GEL 100 to GEL 125 from September, 2012; pensioners under the age 67 receive minimal monthly pension of GEL 100; on top of that pensioners also receive from GEL 2 to GEL 10 monthly depending on length of service and also GEL 15 state-funded health insurance policies.
The retirement age for women is 60 and 65 for men. There were about 682,000 pensioners registered with the Georgian Social Service Agency as of October, 2012. According to official data GEL 83.17 million was allocated in October, 2012 to fund monthly pensions.
While presenting draft of 2013 state budget at a parliamentary session on November 13, Finance Minister Nodar Khaduri said that planned increase in pensions would require additional of maximum GEL 240 million annually.
He said that planned increase was in line with Georgian Dream’s pre-election promise to raise monthly pension to minimum subsistence level.
According to the state statistics office minimum subsistence level for a working-age male was GEL 149 in September, 2012. Khaduri said that the government was planning to revise this figure itself, suggesting that “real” subsistence level might be higher.
The Finance Minister also said that delivering on Georgian Dream’s one of the pre-election promises about “universal healthcare insurance” would require additional of GEL 260-300 million annually.
“So maximum additional GEL 540 million will be required for funding of increased pensions and health insurance,” Khaduri said, adding that these additional funds were made available as a result of scrapping, as he put it, unjustified expenses ranging from some infrastructure projects to slashing funding for various ministries and state agencies.
As a result of cutting these expenses, he said, it was possible to put aside about GEL 740 million, which would be used for funding of various social projects; he also said that detailed breakdown of how the government would use these funds would be made available in the process of further discussions of the draft 2013 budget, expected to be approved by the Parliament in late December.
One of the reasons of criticisms of the draft 2013 budget by President Saakashvili’s United National Movement parliamentary minority is, what it calls, “politically motivated” reduction of funding to those state institutions which are not under the Georgian Dream’s control, such as provincial governors, National Security Council and the presidential administration.
According to the draft 2013 budget funding of President’s administration will go down from this year’s GEL 14.16 million to GEL 9.23 million in 2013 and there will be a significant reduction in president’s discretionary fund from this year’s GEL 50 million to GEL 10 million next year.
There will also be a huge funding cut for the National Security Council (NSC).
This year NSC is receiving GEL 24.78 million of which GEL 1.12 million is allocated for salaries of NSC staff of 38 personnel. GEL 23 million in NSC’s funding is allotted under the line item “measures for national security policy.”
Funding under this line item is removed from the 2013 draft budget and NSC will receive only GEL 1.8 million next year of which GEL 1.17 million will be allocated for its staff salaries.
Finance Minister Nodar Khaduri, who denied allegations of politically motivated funding cuts, told lawmakers that the National Security Council did not provide information how most of its funds were spent.
“If the National Security Council provides justification of its expenses, the Finance Ministry will consider it,” Khaduri said.