This will be the last pay of pensioners before the 'Escrivá reform'

Next February will be accompanied by a pleasant surprise for Spanish pensioners. The reason is that they will receive what is known as ‘paguilla’, the payment to compensate for the deviation in the CPI (Consumer Price Index) and the increase in the pensions of these citizens that has the objective of not losing purchasing power.

The explanation is as follows: over the years, the Government has been drawing up projections for the rise in pensions that took into account different economic scales and which sought to adjust these increases to the increase in inflation. But, in those cases in which inflation was later higher than expected, paid to retirees this pay as compensation.

This is what happened this year: the increase in inflation above what was expected in the second half of the year has left it at 2.3%, compared to the 0.9% rise in pensions (1.8 % in non-contributory ones) that the Government implemented at the end of January. This difference would be 1.4%, a deviation that will cause a disbursement of about 1,900 million euros, according to the calculations of José Luis Escrivá, Minister of Inclusion, Social Security and Migration.

The amount of this payment will be different depending on the type of pension. The previous calculations made by the Economist estimate income in about 167 euros per pensioner, although the increase in inflation could raise these amounts somewhat more.

The last pay of the pensioners

This payment will be, except for surprises, the last that the Government pays to pensioners. This is because the new method of revaluation of pensions introduced by the reform of José Luis Escrivá will make the increases adjust to inflation, since they will be determined by the CPI of the previous year.

Specifically, and in accordance with the text of the bill delivered to the Congress of Deputies and which is being debated for its final parliamentary approval, pensions will be revalued from 2022 “in the percentage equivalent to the average value of the variation rates y-o-y expressed as a percentage of the Consumer Price Index for the twelve months prior to December of the previous year “.

This means that the Government will take into account the inflation rates until November 2021 to determine the increase in pensions in 2022. For that year, the revaluation of the minimum and non-contributory pensions is already known, which will increase by 3%, above the CPI.