Good; Not Good Enough: Pension increase lags behind cost of living surge

Good; Not Good Enough: Pension increase lags behind cost of living surge

Նազիկ Արմենակյան
ԱրմենիաՆաուի ֆոտոթղթակից

Pensioners are not as enthusiastic about benefit increases as the Government, which raised aid allotments beginning this year.

Across the board, pensions will be raised by 10 percent. (The minimum pension, for example, will grow from about $27 to about $34.)

There are approximately 522,000 pensioners in Armenia (about 16 percent of the population), and many of them view the 10 percent raise in contrast to the 14 percent hike in food staples.

While authorities believe that raising pensions means assistance to a solid share of the population, pensioners and experts point to the 4.7 percent inflation and the perpetually increasing cost of living to conclude that the raise will not bring any positive change in the living standard of the socially vulnerable strata of society.

“Over the past years, price hikes in Armenia have been so rampant that these raises [pensions, salaries] are absolutely not proportionate to that inflation and will not bring relief to pensioner’s poor living conditions. This is just a campaign step prior to the fortcoming elections in order to attract the attention of that social class,” member of Heritage parliamentary faction Armen Martirosyan told ArmeniaNow.

According to data posted by Radio Free Europe/Radio Liberty, in the neighboring Georgia minimum service pension is 110 lari (some $66; 25,500 AMD), in Azerbaijan it’s 85 manat (around $108; 41,800 AMD). In Armenia the average pension is 25,000 drams (around $64.50), when, by official data, the minimum consumer basket per month in 2011 was 62,600 drams (around $170).

“The added amount won’t even buy a kilo of beef, given that it costs 3,000 drams ($8). If they were going to give a raise they’d better have given a proper raise to people with low pensions first, so that it could make a difference. The way they have done isn’t of help to us,” says pensioner Roza Balayan, 77.

Many pensioners are living alone without families and their only source of income is their pension; they economize it trying to make it last, along with attempts to spend less. Almost all pensioners need medications and medical adssistance, but have neither medical insurance nor state assistance.

“I worked for 55 years but only 35 is counted and after this recent raise my pension has become 31,300 (around $81). But I live alone and can hardly make both ends meet. I am trying to spend with extreme caution, counting every penny. I am not even heating my place, but it still does not suffice,” says 75-year-old Arusyak Soghomonyan, adding that her utility expenses are 7,000-9,000 drams ($18-23) for her one-bedroom apartment, plus additional payments for property tax, garbage disposal, medicines and food.

Economist Andranik Tevanayna told ArmeniaNow that the rate of the price hike is much higher than the raise in pensions, which, he believes, “nullifies the government efforts”.

“In order to be able to raise pensions, the government raises taxes, whereas our economy has to be developed and one of the most important steps in trying to develop it is to relieve the tax burden, and not add pressure. Our government is collecting taxes, which leads to inflation,” says Tevanyan.