Government Offers Unequal Conditions to Retired People

Mariam Khurtsidze

The government of Georgia announced a new social initiative: retired people over 67 will receive 140 GEL as a pension from September of 2012 including 15-GEL insurance packet. The initiative was raised when the 2012 state budget was drafted and the funds necessary for the increased pensions were already reflected in it.

When the draft-budget was discussed at the first Parliament session, the MPs said it envisaged increased pensions. However, nobody clarified the amount of the increased pension then. The government presented the financial plan last week. On November 9, the President of Georgia met prime-minister, ministers of finances and healthcare and discussed increase of pensions up to 140 GEL.

From September 2012 the pension will increase at 10 GEL. In addition to that, pensioners will receive 15 GEL insurance packets. Retired people over 67 will receive additional 15 GEL and finally the pensions will amount to 140 GEL.

The parliamentary opposition does not support the draft-budget. After the minister of finances presented the main financial document to MPs in details, the majority asked most questions regarding the pension reform. The oppositionist MPs state the pensions shall increase from January 1, 2012 and not from September 1 as it is envisaged by the draft-budget.

“Considering current social environment, the situation is very critical. People, particularly retired people, urgently need assistance in the purchase of medicines, in medical treatment, and in the reimbursement of their treatment expenses… So, the decision to increase pensions and insure retired people only from September is unacceptable,” said Magda Anikashvili, secretary of the parliamentary fraction “Christian-Democrats.”

Minister of Finances Dimitry Gvindadze answered the questions of the oppositionist MPs. He said the government decided to increase pensions due to fiscal sources of the country. He said if the pensions for the people over 67 will increase earlier, it might cause some economic problems for the state.

“We reviewed our fiscal resources and made economically proper decision. There are many examples, even in European zone, when decisions were made due to political dynamics and momentum and it had negative impact 2-3 years later. We will not do it. So, it was the most rational decision,” said Gvindadze.

Non-governmental organization Healthy Environment thinks the initiative of the Government of Georgia is not well-grounded.

The 140 GEL pension includes 15 GEL insurance for retired people.

According to the assessment of the NGO, ‘The government’s initiative is not well-grounded, the arguments lack sense and it makes the fulfillment of the initiative suspicious.”

The Healthy Environment protested the 15 GEL insurance packets for various reasons: “Only people over 67 will receive the increased pension and it creates unequal conditions for them. The bonus amount for pensioners per month is 15 GEL that makes 180 GEL per year. Only 100 GEL is envisaged for the purchase of medicines. While the retired people belong to the high risk group of getting sick, the allocated insurance funds are not reasonable and cast doubts about efficiency of the insurance.”

“Thus, we think the insurance of the retired people will fail like the previous initiative of the government about five-GEL insurance failed,” said the organization representatives.

The Healthy Environment recommends the government “to create equal conditions for every pensioner, to make the insurance packet effective, to clearly work out the social part of the budget and not to give unreal promises to the retired people about effective access to healthcare.”

There are estimated 670 000 pensioners in Georgia and one seventh of the state budget is spent on their pensions. The pensions increase in parallel to the increase in budget. However, the proportionality between those increases is still arguable. For example, people wonder whether the budgets for the defense and interior ministries are too much and whether it would be better to accumulate more funds on social projects and on the increase of pensions?!

This time, 70 million GEL will be spent on the increase of pensions from the 2012 state budget which was increased at 300 million GEL. In 2013, supposedly, 200 million GEL will be spent on the increase of pensions. The government aims to make the pensions equal to 100 USD by the end of Mikheil Saakashvili’s presidency.