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ORIGINAL FRENCH ARTICLE: Pas de revalorisation pour les petites retraites

by anonymous

No Cost-of-Living Adjustment for Small Pensions

Translated Friday 19 September 2014, by Gene Zbikowski

There will be no cost-of-living adjustment for pensions below 1200 euros a month on Oct. 1, even though the government had announced that they would not be impacted by the freeze on social security benefits.

“The rules on cost-of-living adjustments, due to the very low rate of inflation forecast for 2014 (0.5% – editor’s note), result in pensions remaining unchanged,” the ministry of health explained to the Agence France Presse. Due to a mechanical application of the rules for calculation (which notably take the 2013 cost-of-living and inflation adjustments into account), retirees receiving the lowest pensions will not get one extra euro a month, and thus find themselves treated exactly like all the other retirees.

The pensions of retirees receiving the old-age minimum will, on the other hand, benefit “from a slight boost in October, as the government promised,” the ministry pointed out, without however revealing the amount of the adjustment.

Within the framework of its plan to cut spending by 50 billion euros by 2017, the government had decided to freeze retirement pensions until October 2015, which was to result in 1.3 billion euros in savings. Under pressure from deputies belonging to the governing majority, the government had “promised to spare poor retirees from the freeze measure by applying the normal cost-of-living adjustments to their pensions.”

The freeze on the cost-of-living adjustment had been decided upon only for retirees of all retirement plans (private-sector workers, farmers, civil servants, artisans, etc.) receiving over 1200 euros a month (adding together the basic retirement pension and any supplementary pension). This concerns roughly half of the 15 million retirees in France. In the final analysis, this comes down to an 18-month freeze, since the date of the annual cost-of-living adjustment was pushed back this year from April to October, as part of the reform of retirement pensions.

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