Consumer Price Index (CPI) legislation needed for the increase of AOV pension approved in Parliament

On August 16th, the Minister of Public Health, Social Development and Labor, Omar Ottley presented a legislation to Parliament regarding reparation of several legislations used to increase amounts such as pension and minimum wage.
“I am proud to announce that it was voted on and approved by Parliament unanimously. This critical legislation will allow the long awaited increase of AOV pension to occur for 2023, and ensures a timely annual indexation of minimum wage and pension moving forward,” stated Minister Ottley.
The changes to specific regulations include the national ordinance on general old-age insurance (pension), the national ordinance on general widows and orphans insurance, the national ordinance on minimum wages, the national health insurance ordinance, and the national accident insurance ordinance.
The legislation amends the provisions of certain national regulations relating to the adjustment of amounts based on developments in the price index for household consumption.
Under current legislations, the adjustment of amounts such as pension is subject to the CPI for the month of August of previous year to the current year.
However in 2018, the methodology used by the Department of Statistics has been adjusted and the price index is determined quarterly.
Therefore, JZW, SER, COA and the Governor have all given negative advices on all attempts to index pension based on 3rd quarter CPI. To avoid any further delays in indexation, all legislations have been amended to make use of 2nd quarter CPI for indexations.
Utilizing the 2nd quarter ensures that the Ministry of VSA will be able to adjust various legislations yearly to ensure legal certainty and aid in avoiding obstacles in legislative trajectory hindering the Minister from meeting the January 1st deadline of the following year.
Based on CPI of 2nd quarter of 2021 at 2.84% and the 2nd quarter of 2022 at 4.91%, the pension is projected to increase to Naf. 1,338 from the current maximum pension of Naf. 1,240.

The post Consumer Price Index (CPI) legislation needed for the increase of AOV pension approved in Parliament appeared first on Pearl FM Radio.

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