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Pensions: how much will they be in October 2024 after the veto of the mobility law? - Infobae
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Jubilaciones: de cuánto serán en octubre 2024 tras el veto a la ley de movilidad
Los jubilados recibirán en octubre un incremento del 4,17% en sus haberes, junto con un bono de $70.000 para quienes perciban la mínima. A pesar del ajuste mensual por inflación, los ingresos continúan perdiendo poder adquisitivo frente a los precios, especialmente tras el veto a la ley de movilidad
www.infobae.com
September 12, 2024
Retirees will receive a 4.17% increase in their income in October, along with a $70,000 bonus for those receiving the minimum. Despite the monthly adjustment for inflation, income continues to lose purchasing power compared to prices, especially after the veto of the mobility law.
In October, the adjustment to salaries corresponding to the 4.2% inflation recorded in August is applied.
The retirement panorama in Argentina has once again been the center of attention, after the Chamber of Deputies confirmed the veto of the new retirement mobility law . This fact has caused retirees and pensioners to face a different scenario with respect to what they would have received if the proposed regulation had been approved in Congress. In this context, the minimum pension for retirees will suffer a slight increase in October 2024, although the improvements are far from what was projected by the frustrated law.
The veto and its impact on retirement benefits
2024 has been a year of changes and challenges in economic policy, especially for retirees. Following the veto approved by deputies , retirees who receive the minimum pension will see their income increase by 4.17%, which raises the minimum pension from $234,539 to $244,324.61. However, when adding the $70,000 bonus that the government continues to grant, retirees with the minimum pension will receive a total of $314,324.61 in October. This represents an increase of 3.21% in the total income of these retirees, in a context of high inflation that continues to erode their purchasing power.Although the veto left without effect the possibility of implementing a new pension mobility formula based on the evolution of the Consumer Price Index (CPI), retirees will continue to receive monthly adjustments tied to inflation. If the proposed law had been approved, the increase in September would have been 8.1%, bringing the minimum pension to $253,303 and, with the bonus included, to $323,303. However, current pensions remain considerably below this figure.
The October increase and the bonus
Despite the decision taken in Congress, the Government ratified the delivery of a $70,000 bonus for those retirees and pensioners who receive the minimum pension. This bonus, which has been a palliative measure against the sustained increase in inflation, helps to increase the income of millions of retirees, although it is still insufficient to cover the increase in the cost of living.In October 2024, the bonus will continue to play an essential role for beneficiaries of the minimum pension, as well as for other types of pensions. For example, the Universal Pension for Older Adults ( PUAM ), which is below the minimum pension, will see an increase with the bonus, going from $257,632 to $265,404.27, which implies an increase of 3.01%. Without the bonus, the PUAM would be $195,404.27. These types of pensions, which also suffer the impact of inflation, depend largely on the bonus to approach the income level of the minimum pension.
For its part, the income corresponding to non-contributory pensions (PNC) , which benefit people with disabilities, mothers of seven or more children and other vulnerable sectors, will increase from $234,177 to $241,970, which represents an increase of 2.90%. Without the bonus, beneficiaries of non-contributory pensions will receive $170,978.99.
The minimum will reach $244,324.61 in October, but with a $70,000 bonus, retirees' income will start at $314,324.61
How much do retirees get in October 2024?
- Minimum retirement :
Without bonus: $244,324.61
With bonus: $314,324.61 - Universal Pension for Older Adults (PUAM) :
Without bonus: $195,404.27
With bonus: $265,404.27 - Non-contributory pensions :
Without bonus: $170,978.99
With bonus: $241,970 - Maximum retirement :
$1,644,081 (with an increase of 4.17%)
The role of the bonus in income containment
The $70,000 bonus, which will continue to be delivered in October, will continue to play a central role in mitigating the loss of purchasing power. More than 65% of retirees and pensioners who receive the minimum pension, that is, more than five million people, will continue to depend on this additional reinforcement to their income. Although the bonus represents temporary help, it is clear that it is not a long-term solution to the growing inflation , which eroded the value of retirees' income in recent years.As for the maximum salaries, which are also adjusted for inflation, the increase in October will be 4.17%, which will take the maximum salary from $1,578,233 to $1,644,081. These increases, although significant in nominal terms, are below initial expectations in the context of high inflation that the country is facing.
The mobility formula and increases linked to inflation
One of the most significant changes in the retirement system is the updating of pensions using a formula that takes into account the Consumer Price Index (CPI). Since July 2024, pensions and retirement benefits began to be adjusted monthly, instead of quarterly, following the evolution of inflation, without the need for Congress to approve new pension updates.This new formula is one of the main modifications implemented by the government of Javier Milei, who seeks to make pensions more directly reflect increases in prices in the economy. With this methodology, the income of retirees and pensioners is updated month by month taking into account the inflation data of the previous month. Thus, in October 2024, retirement benefits will be adjusted based on the August CPI, which guarantees that retirees' income maintains a certain level of updating against inflation.
Despite this monthly adjustment, the October increase is still insufficient to fully offset the deterioration in purchasing power that retirees have experienced throughout the year. Monthly increases linked to inflation are a measure that helps prevent a greater loss in the value of income, but they fail to match the real increase in prices in the economy.
