State Pension to rise to GEL 100

President of Georgia, Mikheil Saakashvili announced on Monday that the state pension will increase in September for all Georgian pensioners and the basic pension will be GEL 100 per month. He also directed the Government to prepare proposals on pension reforms during the next few months.

“You know that all pensioners residing in Tbilisi receive GEL 10 more than others. From September, Tbilisi residents’ pension will be increased to GEL 100, with an extra GEL 7 for those who have a record of service and merit. Those living below the poverty line will get an additional GEL 30 and GEL 15 insurance, bringing their pension to a total of GEL 152,” Saakashvili stated. He also mentioned that pensioners living outside Tbilisi will receive and increase of GEL 20 making their pensions the same as those of Tbilisi residents.

The President also spoke on pension reform and its necessity, “I always remember our election promise of a USD 100 pension package, which takes into account the basic pension, additions according to length of service and merit and health insurance. I can say that the insurance is successful and those with insurance are able to get many kinds of treatment at hospitals. In order to progress to the USD 100 pension package next year we need to carry out serious pension reforms,” the President said and explained the essence of the reform, “The pension reform means that as the result of tax collection, allocation of the budget and relations between the tax payer and the authorities, pensioners will be in a profitable position.”

Yesterday the President's spokesperson, Manana Manjgaladze said that there are several reasons for the decision, one being “inflation and the increasing prices on products.” According to Manjgaladze this decision is also a step forward towards keeping the promise of the USD 100 pension and eliminating the imbalance between the pension for Tbilisi residents and those living outside the capital.

Parliamentary opposition Christian-Democratic movement made two suggestions to the authorities on the issue, “The Government should work in two areas, first for there to be no inequality between Tbilisi and regions’ residents and secondly the authorities should ensure the size of the pension is based on length of service and merit,” Movement leader, Giorgi Targamadze said, adding “as for the minimum to live on, even GEL 100 pension is significantly less than the minimum and I appeal the authorities to work on this.”

Economic analyst, Gia Khukhashvili told The Messenger, “I welcome this decision; however it seems very obscure and doubtful to me. Firstly, these kinds of decisions are not usually made at this time of year; secondly, our authorities generally make such decisions in the pre-election period. So in September, GEL 100 might be worth less than it does now due to inflation. At the same time, our Government has been very active lately in social matters and perhaps they are frightened of social tensions in the country, but it is unclear what they might gain from the statement when it refers to September and not next month.”