Protection measures for pensioners

The Romanian Government decided on Thursday that pensioners with pensions below 872 lei, that is 195 euros, should be exempted from the payment of healthcare contributions.

Valentin Țigău, 11.03.2016, 13:28

The measure taken by the government to exempt from the payment of healthcare contributions those pensioners whose pension is below 195 euros will be applied in the case of five hundred thousand people. The measure is a consequence of the increase in the pension point and of the harmonization of the new fiscal code with the Healthcare Law.

The Government’s spokesman, Dan Suciu, explains: “We have harmonized the new fiscal code with the Law on the reform of the healthcare system. According to the old provision, only the pensions smaller than 166 euros were exempt from the payment of healthcare contributions. Now, the new ceiling is of 195 euros, following the increase in the pension point. This amendment will apply in the case of 508 thousand pensioners, who will therefore no longer pay healthcare contributions.”

So far, almost 2 million pensioners have been exempt from the payment of healthcare contributions. Romania currently has more than 5 million pensioners, which is a high number. From one year to another, this makes it difficult for the state budget to support these payments, even if most of the pensions are below 224 euros.

The situation is pretty serious because, in some counties, the number of pensioners exceeds the number of employees. The average pension in Romania is among the lowest ones in Europe, amounting to almost 200 euros. Pensions are 5 times lower than in France and 20 times lower than in Luxembourg. And this happens in the context in which, from a technical point of view, the Romanian system uses high individual contribution quotas to be paid from pensions.

According to economic analysts among the causes for this situation are: the rather slow passage from the public pension system to the private system, the drop in the number of active population, the economic crisis and the rising unemployment rate. Other causes are the false promises of politicians related to sustainable growth and the corruption in the system, fueled by the permissive legislation and by some Communist-like mentalities.

The funds deficit and the bad loans made to cover payments have a negative impact not only on pensioners, who have become the victims of austerity measures, but also on the population’s general living standards. Consequently, the debates on pensions have triggered fierce reactions by the society, as has happened recently, when the MPs have granted themselves special pensions calculated depending on the number of mandates they held in Parliament.

A similar debate, on which the Constitutional Court was called to pass its decision, was generated by the proposal to grant special pensions to locally elected officials. Among them there are former Communist party secretaries who, during Communism, held positions similar to their present ones.