Many older people consciously refuse their well-deserved rest and go to work in order to provide themselves with the necessary medicines, food and other means necessary for life. The issue of increasing benefits for working pensioners has been raised repeatedly, but officials cannot come to a common denominator. So will there be indexation or not, and how much will the income of pensioners increase?
Recalculation of pensions for working pensioners from August 1, 2018
In August of each year, working pensioners have their pensions recalculated based on the results of their work in the previous calendar year. This means that from August 1, 2021, the size of pensions for this category of senior citizens will be increased depending on whether the pensioner worked in 2021, how long he worked last year and what salary he officially received.
The following factors will affect the recalculation amount:
- whether the pensioner worked throughout 2021 or only part of it,
- how high the pensioner’s official salary was.
The maximum recalculation amount is the value of three pension points. Those who worked throughout the last year and received a salary of more than 20 thousand rubles can count on the maximum.
Please note that the recalculation will also affect those pensioners who are currently no longer working, but worked in 2017!
As for what the specific amount of recalculation of pensions for working pensioners will be from August 1, 2021, in this case you need to remember one more important nuance.
Pensions from August 1, 2021: who will receive increased payments
The pensions of all working old-age or disability pensioners will be recalculated. But this is not a traditional recalculation made according to the usual algorithm from inflation values for non-performing categories. This time, payments are increased due to pension points earned in 2021. This measure is being taken to compensate for the pensions of employed pensioners that are not subject to indexation (cancelled from 2021).
This increase is associated with an increase in the length of service of a working pensioner and the payment of insurance contributions by the employer. For retired employees, enterprises pay insurance premiums, which, according to the new regulations, are recalculated into pension points. These points, accumulating, give the right to recalculate payments, which is carried out by the Pension Fund. Thus, the increase in pensions from August 1 is characterized by the fact that it is made individually for each payment and its size depends on factors such as the time of receipt of the pension and the amount of transferred contributions.
The legislator does not classify pensioners who are unofficially employed as employed, so they cannot apply for an increase in payments.
To receive an increase, you do not need to visit the Pension Fund branch, since the recalculation is not of a declarative nature and occurs without the participation of the recipient, because the Pension Fund receives all the necessary information from employers (in particular, from the SZV-M report).
So, all working age or disability pensioners for whom employers paid insurance contributions in 2021 (at least for 1 month) have the right to recalculate their pensions.
Read also: Raising the retirement age
How much will pensions for working pensioners be recalculated in 2021?
This nuance is as follows. Working pensioners who have been working for the last several years in a row have had all indexation frozen. This means not only that their pensions do not increase at the beginning of the year, when indexation takes place for non-working old-age pension recipients. This also means that the value of their pension point is frozen at the level it was at the time of their return to work or at the time of their old-age pension with job retention.
In 2021, the cost of one pension point is 81.49 rubles. This means that the maximum recalculation (three points) is 244 rubles 47 kopecks. But this is for those who worked throughout 2021, received a salary of more than 20 thousand rubles, and now no longer work.
If the pensioner continues to work, then the Pension Fund of the Russian Federation will use not the 2021 indicator as the value of the pension point, but the indicator that was at the time of the freeze. For example, if a pensioner retired several years ago, but retained his job, the Pension Fund will take into account the value of the pension point for 2015 (the moment of freezing). This is 71.41 rubles. The maximum recalculation will be only 214 rubles 23 kopecks.
Is it profitable to work for a pensioner?
To answer this question, you need to understand what kind of pensions there are. Insurance pensions are allocated (that is, through insurance contributions to the Pension Fund). They occur due to old age, due to disability and the loss of a breadwinner.
State pensions, which are paid from the state treasury, are as follows:
- for length of service;
- by old age;
- on disability;
- upon loss of a breadwinner;
- social pension.
The state pension, paid from the state budget, is canceled if a disabled citizen gets a job.
But exceptions are possible. So, some people can receive two pensions. For example, old-age insurance and state insurance due to disability (such pensions are possible for WWII participants, blockade survivors, etc.).
In 2021, the list of benefits for pensioners has been updated, what are you entitled to now?
The state does not prohibit citizens who are retired from working. The advantage of working in retirement is additional income and an increase in pension points.
Minus for working pensioners: amendments have been made to the law on pensioners who work. Based on these, the indexation of insurance pensions and fixed payments to it is cancelled. But this does not apply to government payments. They are constantly indexed.
Some social benefits are only available to non-working retirees. When applying for a job, the following are canceled:
- Social old age pension.
- A federal supplement that allows you to increase your overall income to the subsistence level.
- State pension due to the loss of a breadwinner.
- Compensation for caring for a disabled person.
The government is constantly discussing pension reform. There are many proposals, but they have not yet been accepted. Thus, there is a proposal not to pay pensions to citizens who receive five hundred thousand rubles a year. It is also planned to cancel payments to those people whose monthly income is 2.5 times more than the established subsistence level.
Is it possible for a working pensioner to achieve a full recalculation of his pension?
Working pensioners receive a recalculation of their pensions, taking into account all those indexations that have passed by, immediately after leaving work.
In practice it looks like this. If a pensioner resigns in July 2018, he will be entitled to an increased pension starting in August. But due to certain features of companies’ accounting reports to the Pension Fund and the work of the pension fund itself, the increase itself will occur only in the third month after dismissal. In our example, the pensioner will receive in October an increased pension for October and the difference between the old and new pension amounts for August and September.
The Pension Fund quite officially explains that in the case when a pensioner returns to work, having received a recalculation of his pension, no one will take away the increase from him.
He will receive an increased pension and salary. True, the next indexation of the pensioner will not be affected again.
Including, no one is stopping a pensioner from getting a job with the same employer in the same workplace. Therefore, if there is such an opportunity to quit and return to work, and there is also a sense in such a step (for several months you will have to sit without a salary, on one pension, and the question is whether increasing your pension is worth it), a working pensioner can take advantage of it for an additional increase .
Cancellation of indexation for a working pensioner
Indexation refers to the annual increase in the size of the pension. Insurance pensions increase in accordance with rising prices. And government payments increase depending on the cost of living.
Indexation is not carried out for working pensioners. Insurance pensions for pensioners who do not work were indexed on January 1, 2021, and increased by 3.7%. The state pension is indexed regardless of whether a person works or not. The only exception is social payments. They are canceled when applying for a job.
Perhaps something will change soon, and indexation will also be relevant for working pensioners. The President of the Russian Federation ordered the government to carefully consider this issue.
Should working pensioners expect a return to indexation?
Almost certainly not worth it. What is happening in Russia in 2018 should make it clear to Russians that times have finally changed.
In those years when the state earned huge amounts of money from selling natural resources abroad, it could more or less adequately provide for ordinary people, including pensioners. Pensions increased, the country's economy grew. There was enough money not only for oligarchs close to power, but also for ordinary people.
Now times are completely different. The state, through its policies, brought the country under sanctions; the economy was never seriously reformed to modern conditions. While high-tech giants became the largest companies all over the world, in Russia they relied on the oil and gas industry in the old fashioned way.
This policy has led to the fact that there is little money in the country, and first of all it is provided by oligarchs close to the authorities. There is no money left for ordinary people, so the budget is saved on the largest social expenses - pensions. Starting next year, it is planned to raise the retirement age. Due to this, current pensioners will supposedly receive a significant increase of a thousand rubles per month each, but the state will take back even more by increasing the VAT tax.
It is at least naive to expect that working pensioners will receive an increase on an equal basis with non-working ones. Officially, the freeze on pensions for working pensioners has been extended until 2021; nothing prevents it from being extended beyond this period for as long as desired.
Indexation of pensions of working pensioners
If you reach the appropriate age and have sufficient insurance experience to take a vacation, you can submit a request to the territorial office of the Pension Fund for the assignment of pension payments.
In this case, the citizen has the right to continue working. The disadvantage of this solution is the inability to annually recalculate the amount received taking into account inflation.
Indexation of pensions is currently available only to non-working pensioners. If a citizen continues to work after retirement, an adjustment to the cost of the IPC and an increase in pension payments will be available only after dismissal.
For this purpose, notification of the territorial branch of the Pension Fund of the Russian Federation about the termination of labor activity is also required.
Indexation of pensions for older people who continue to work was “frozen” back in 2021. Changing this situation has been planned for several years. News about a possible recalculation of the amount of payments and an increase in their size is quite contradictory.
Working pensioners can expect a pension increase in 2018 in August.
The government promises an automatic recalculation of the amount of payments taking into account the points accumulated by citizens. Their number depends on the length of work experience and insurance contributions paid to the Pension Fund.
At the same time, the maximum amount of the bonus is limited to three points, the cost of each of which this year is 81 rubles 49 kopecks. Thus, pensioners who continue to work will be able to receive 244 rubles 47 kopecks in addition to their pension payment.
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When will working pensioners get their indexation back?
Indexation of pensions for working pensioners may begin as early as 2022, that is, in the next budget cycle, RIA Novosti reports, citing the Chairman of the Upper House of Parliament Valentina Matvienko. However, she clarifies that specific dates are still unknown. Most likely, they will be voiced by the head of state Vladimir Putin during the announcement of his message to the Federal Assembly.
After the chosen option is enshrined at the legislative level, the authorities will adjust the parameters of the Pension Fund's budget by amending the relevant law.
