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What pension awaits Kazakhstanis in 2017?

by February 6, 2017 Market

Increase on a regular basis

It should be reminded that at the solemn meeting dedicated to the 25th anniversary of Independence of Kazakhstan, the President Nursultan Nazarbayev instructed the Kazakhstan Government to increase the amount of pension by 20% in 2017 compared to 2016, as well as to increase the size of a one-time state aid in connection with the birth of a child by 20% from July 1, 2017. It is worth noting that the payment will be increased to 2 million 100 thousand Kazakhstanis.

Speaking about the increase of pensions, I would like to emphasize that, despite the crisis in the global economy; Kazakhstan fully fulfilled social commitments to increase social benefits, including pensions.

Pensions are paid in a timely manner. Their sizes, in contrast to the wages of the working population, increased regularly every year, while ahead of the inflation rate of 2%, which corresponds to the adopted in 2014 the Concept of further modernization of the pension system until 2030.

Increase every six months

It should be noted that the work to improve the pensions is carried out systematically, consistently, taking into account the real possibilities of the budget.

Thus, pension spending – solidarity and the base – amounted to more than 1.3 trillion tenge in 2016; it will amount to more than 1.5 trillion tenge in the current year.

“The size of base pension payments increased by 7% from January 1, 2017, and pursuant to orders of the Head of State will be increased by another 13% from 1 July 2017. In general, this will ensure its growth to 20% in relation to 2016,” S. Zhakupova said.

Thus, the basic pension amounted to 11,965 tenge in 2016, taking into account the increase of 7%, its’ size is 12 802 tenge from 1 January 2017, and with a view of increase of 13% will be 14 466 tenge from 1 July 2017.

According to Deputy Minister, taking into account the increase of pensions to 20%, the average size of pensions, taking into account the basic pension will rise from 55 117 tenge in 2016 to 66 676 tenge, the minimum size – from 37,789 tenge in 2016 to 45 711 tenge.

“Since the beginning of the current year the amount of cumulative pension increased by 9% once again. The next step – the amount of cumulative pension will be increased by 11% from 1 July this year, all of which will increase to 20% in relation to 2016, as it was entrusted by the Head of State in his Address to the people of Kazakhstan on January 31, 2017 ” The third modernization of Kazakhstan: global competitiveness,” S. Zhakupova said.

According to the vice minister, additional documents from the recipient of pension payments is not required, since the allocation is based on data available in the pension business.

Recalculation according to seniority

Currently, the basic pension is given to all in the same size without taking into account seniority, and a new approach to its destination will be applied from July 1, 2018. In particular, the size of the basic pension to each recipient individually, depending on its seniority of participation in the pension system, will be recalculated in the framework of the further modernization of the pension system.

“If a citizen has 10 years of experience or does not have employment record, then the size of the basic pension is equal to 50% of the subsistence minimum will be equal to the current size. The basic pension will be increased by 2% for each year over 10 years and the size of the basic pension will be 100% of subsistence minimum in the experience of 35 years or more,” Deputy Minister said.

For example, at the experience of 20 years, the basic pension will be 70% of subsistence minimum, 30 years old – 90% of subsistence minimum (if 10 years – 12 802 tenge, 20 years � 17 122 tenge, 35 years – 24 459 tenge).

S. Zhakupova stressed that this applies to all retirees.

“In this connection, the size of the basic pension will be rearranged to all recipients of basic pension on the basis of information about employment history available to pension schemes of the recipient from July 1, 2018. 116.3 billion tenge is provided in addition to the budget for 2018 for these purposes,” concluded S. Zhakupova.

According to Vice-Minister, on the one hand it will allow to restore social justice for those retirees who because of lack of information about income, having a great work experience, receive lower pensions, on the other � to stimulate current and future generation of workers to the formalizing labor relations.

Source: The Prime Minister of Kazakhstan