The Polish pension strategy is on the verge of a revolution that can forever change the financial situation of thousands of poorest seniors. The Sejm is working intensively on a bill eliminating alleged penny pensions. The thought assumes one single payment of all the funds collected alternatively of monthly, symbolic transfers. Although the Social Insurance Institution sees this as an chance for massive administrative savings, for many pensioners this means serious consequences – with the failure of the right to the 13th and 14th pensions at the head. The decisions that will shortly be made in Parliament will straight hit those receiving the lowest benefits in the country today. The case is very emotional and it divides experts, and for many seniors it is either not in the social support system.
One paycheck and that's it. What is the retirement revolution?
The concept discussed in the Sejm's elder Policy Commission is simple in its assumptions but complicated in effect. For persons whose calculated pension benefit is lower than statutory minimum pension. According to the fresh idea, ZUS would halt monthly, frequently penny transfers to the benefit of one-off payment of the full amount due. After receiving this money, the individual would formally end his relation with the pension system. This means that it would vanish from the Social safety Office records as a recipient.
The main engine of these changes is finance. ZUS has been alarming for years that the service of specified low benefits is grossly unprofitable. The costs associated with the execution of the transfer, the handling of correspondence and the maintenance of data in IT systems are many times higher than the value of the payout itself, which frequently amounts to respective zlotys and, in utmost cases, only a fewer cents. From an institution's perspective, Disposal of these benefits means a clean rationalisation of costs and simplification of administrative procedures, which present absorb disproportionately large resources.
Who precisely will the fresh regulations be affected? Thousands of Poles
The fresh regulations are aimed at a circumstantial but diverse social group. This is about people who, through their professional lives, have paid very low pension contributions. It was enough. one, only contributionto formally get the right to benefit. This is how the Social safety Office strategy showed up people whose monthly pension is simply a symbolic gold or even 2 cents. Who is most frequently in this group?
These are, above all, women who, after giving birth to their children, have no longer returned to the labour marketplace for work, sacrificing themselves to their home duties. They are besides those who have been employed “black” or working on work and commission contracts for years, from which no pension contributions were paid. This problem is peculiarly visible in agrarian areas and in erstwhile industrial centres, where the grey region for decades was the only alternate to unemployment. As a result, after reaching retirement age, they are formally eligible for benefits, but their amount is purely symbolic. The number of people with ‘penetary pensions’ is steadily increasingWhich makes the problem more and more burning.
Biggest blow: failure of the right to 13th and 14th pensions
However, the top controversy and concern among seniors is the key consequence of the proposed change. Persons who decide or are forced to accept a one-off payment, automatically lose the right to any additional yearly benefits. We are talking about the thirteenth and fourteenth pensions, which for many pensioners with the lowest benefits represent the most crucial cash injection throughout the year.
In practice, for individual who receives 5 PLN per month, “Thirteen” and “Four” of minimum pension (now over 1780 PLN gross) are absolutely fundamental amounts. They let you to buy drugs, heat for winter, or cover the most urgent expenses. The fresh regulations will take their support away. Senior, who will receive a single pension, e.g. respective 100 PLN capitalised pension, forever say goodbye to the yearly additions. It is this aspect that makes the proposal seen not as aid, but as a financial trap for the weakest.
Reform or drama for the poorest? Experts are divided
The debate around the task shows a deep division in its impact assessment. Supporters, including representatives of ZUS, emphasise the aspect of rationalisation. They claim that the strategy must not indefinitely lose money for the service of benefits which are lower than the cost of the postage stamp. From their perspective, it is simply a logical step towards the recovery of public finances and the simplification of bureaucracy. They indicate that the State should not keep the fiction of regular witnessing where it is purely symbolic.
On the another hand, critics and aid organisations are informing that the threat to the poorest and the marginalisation of them. For many older people, monthly, even the smallest transfer from the Social safety Office is more than money. It's proof of belonging to the system, a sense of being noticed by the state. One-off payment and "exemption" from the list of pensioners can lead to deep a sense of social exclusion. Experts inform that, while administrative savings will be real, the social cost of this operation may be much higher. The parliament is approaching the vote, and thousands of seniors are anxiously waiting for a decision that will find their future.
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The parliament ends with penny pensions. The seniors will lose the 13th and 14th benefits?
