Pension Indexing 2024 – Net/Gross Table.  How much will the increases be?

The indexation of pensions and pensions in 2024 will reach 12.12 percent – ​​Piotr Goscek, Chief Tax Consultant at inFakt, informed the business editorial team. On Friday, the Central Bureau of Statistics published the latest data necessary to calculate the growth rate of subsidies for this year. This is the amount of benefits that can arrive after increases.

The Central Bureau of Statistics reported today, Friday, that the real increase in average salaries in 2023 compared to 2022 amounted to 1.1%. Data is critical for retirees and retirees. They are used to calculate the indexing index.

It involves multiplying the amount of benefit and the basis for its estimation by the benchmark index. It is the average annual price index of consumer goods and services in the previous calendar year of at least 20%. The real increase in average salary in the previous year.

The Central Bureau of Statistics provided information about the real increase in average salaries in 2023 compared to 2022, which amounted to 1.1 percent. As a result, pensions will eventually be linked to the pension inflation rate – 11.9 percent and to 20 percent of the real salary increase, i.e. 0.22 percent. This means that pensions will increase by 12.12 percent from March 1, said Piotr Juszczyk, senior tax advisor at inFakt.

He also pointed out that “the increase in the pension by 12.2 percent is the result of high inflation that accompanied us until 2023.” – The so-called pension inflation is slightly higher than the general average annual inflation (11.4 percent). Therefore, retirees can count on slightly higher benefits, but on the other hand, we must remember the burdens of common law, Juszczyk emphasized. “Pensions up to 2,500 zlotys are not subject to taxes in principle, but nothing protects them from health insurance contributions,” the expert noted.

Indexation of pensions in 2024

We have prepared a table showing the extent of the interest increase with an index of 12.12%. In this case, the minimum pension will increase to PLN 1,780.96 gross (PLN 1,620.67 net) from the current PLN 1,588.44 gross (PLN 1,445.48 net). Calculations on this matter have been prepared for us by Piotr Juszczyk.

The people who receive the highest benefits will benefit the most. Pensioners who now receive a gross benefit of PLN 2,000 (net PLN 1,820) will receive an additional PLN 220.58. In the case of people receiving a gross pension of PLN 5,000 (PLN 4,250 net), it will be more than double, i.e. PLN 478.46 net.

Furthermore, those in power may also – as was the case in 2023 – decide on an amount and a percentage, with a minimum increase. Last year, benefits increased by 14.8%, but not less than a total of PLN 250. The size of the pension increases has resulted from the highest inflation rate in two decades. In such a case, the lowest pension in 2024 would rise to a gross PLN 1,838.44, or a net PLN 1,672.98. This means an increase in utility by a net amount of PLN 227.50.

– It remains for the government to decide whether the minimum pension will be increased by an index or by PLN 250. If the ratio is increased, the pension will amount to a gross PLN 1,780.64 and a net PLN 1,620.38. Increasing the pension amount will increase it to PLN 1,838.44, net PLN 1,672.98, meaning an index of up to 15.7 percent. In the first case, pensioners will receive a higher transfer of PLN 174.9, and with an increase in the amount of PLN 227.50 – said the chief tax consultant at inFakt. In his opinion, “indexing quotas is more realistic.”

We should know the official indexation price next week. Pursuant to the Law on Pensions and Pensions from the Social Insurance Fund, the Minister responsible for Social Security announces, through a notice in the Polski Monitor, within 3 working days from the date of the announcement by the Head of the Central Statistical Office, that it as well as the amount of the increase.

Second indexation at high inflation

Donald Tusk's government is also working to introduce a second indicator in the face of high inflation. Minister of Family, Labor and Social Policy Agnieszka Dziemianowicz-Bąk spoke about this last month. As indicated, the coalition agreement provides, among other things, for the following: Second indexation within a year if inflation exceeds 5%. – We are working on appropriate legal solutions – depending on the level of inflation – such a second indexation could appear, said Dzimjanovic-Bak.

Main image source: Stock struggle

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