From April 1, 4 million pensioners are waiting for indexation: who will receive and how much

Indexation, which will occur on April 1, 2024, will raise the average social pension to 13.5 thousand rubles. Of course, this is not a large amount, but we must take into account that the recipients of social pensions are Russians who, due to various circumstances, do not have enough work experience to receive an insurance pension. That is, these are people who during their adult lives did not make a sufficient contribution to the national economy of the country, and therefore they have no financial basis to count on average (and even more so high) pensions in old age.

“Indexation will take place automatically; there is no need to submit an application,” the Social Fund said in a statement.

Let us clarify that there is a social pension for old age, disability and loss of a breadwinner. It does not depend on length of service and pension coefficient. This pension is assigned to people who do not have the opportunity to provide for themselves or receive an insurance pension.

In 2024, the indexation of social pensions will be 7.5%, according to the annual government decision. The increase is related to the growth rate of the living wage of a pensioner in Russia over the past year, 2023.

Those citizens who receive a social pension that is less than the subsistence level of a pensioner in their region of residence receive a social supplement, which allows them to increase their pension provision to this level.

In total, the April increase in monthly payments will affect 4.1 million people. Of these, over 3.4 million are recipients of social pensions. Almost 700 thousand more people are recipients of state pensions. These are military personnel, members of their families, participants in the Great Patriotic War… This also includes pensions of citizens who suffered as a result of radiation or man-made disasters, and a number of preferential categories (for example, bonuses to pensions for long service for astronauts). In total, 37.5 billion rubles will be allocated from the federal budget for 2024 to increase social pensions from April 1.

MK asked experts – specialists in social and financial issues – to comment on the upcoming indexation of social pensions.

Anastasia Khrustaleva, senior vice-president of Fontvielle Investment Company:

“Social pensions are usually reviewed annually and on April 1. This happens automatically, and the cost of living of a social pensioner for the past year is taken into account. The exception, however, was 2022, when additional indexation was carried out on June 1 against the backdrop of a significant and sharp increase in prices in the country. So, in case of unforeseen circumstances, the government carries out an additional review of the amount of payments. I don’t think it will be needed this year.

The size of the revision correlates with the level of inflation in the country; the increase, as a rule, slightly exceeds it. For example, last year the price increase was 7.42% according to Rosstat, while indexation this year was 7.5%.

As for recipients of social pensions, we are talking about more than 4 million people in 2024. Social pensions are assigned to disabled citizens who cannot provide for themselves for various reasons and do not receive an insurance pension. That is, they are recipients of such payments due to certain life circumstances, for example, age or disability. Moreover, a person can be dependent on the state either permanently or temporarily.

There is one nuance of the upcoming indexation: although the fixed size of the social pension is 7,733.34 rubles, it may still differ for some social pensioners. For example, for people with disabilities of different groups. So, for group I the indexed payment will be 15,466.74 rubles, for group II it will be 7,733.34 rubles, and for the third group it will be 6,573.39 rubles. Taking into account disability since childhood, the amounts are different: 18,559.82 rubles for group I and 15,466.74 rubles for group II. The size of the social pension will be 7,733.33 rubles for recipients in old age, for the loss of a breadwinner (if both parents are absent, the payment is doubled), and for representatives of the Minority Peoples of the North.”

Mark Goikhman, analyst at Capital Skills Financial Academy:

“Of the 4.1 million people who will receive an increase in these payments, 3.4 million are recipients of social pensions and 0.7 million are recipients of state pensions. This is truly a massive indexation of price increases, which has the same meaning for large groups of people as a similar increase in payments to “ordinary” pensioners. Such compensation helps maintain the incomes of people who, as a rule, have higher expenses for vital goods and services. At the same time, their opportunities for additional income are limited.

But compensation of 7.5% is made based on the average inflation rate over the past year. Prices for less in demand goods are also included in its calculation. However, as has long been known, everyone has their own inflation, depending on their personal set of purchases. Typically, people estimate the price increase for themselves to be higher than the average. Thus, the inflation observed by buyers in February 2024 over the previous 12 months is 15.2%, according to the Central Bank of the Russian Federation based on population surveys.”

Andrey Loboda, economist, director of communications at BitRiver:

“The indexation of social pensions by 7.5% is an important step in improving the lives of pensioners. I believe that increasing pensions by this percentage will help make pensioners’ incomes more stable.

Undoubtedly, the state fulfills all its obligations to pensioners and does it very well. Increasing social pensions will even help reduce poverty among older people and improve their well-being. It is clear that pensions in our country, to put it mildly, are not gigantic, but more income will always provide an opportunity, albeit slightly, to improve the quality of life, providing access to basic needs. And this is important in light of the issue of growing inflation; it is important that pensioners do not feel it themselves, so indexation should neutralize inflation risks.”