Bulgaria to Increase Pensions by Nearly 10% in 2025

Pensions in Bulgaria will be increased by 9.6-9.7% from July next year, as per the Ministry of Finance's latest estimates, which are in line with the Swiss indexation rule. Initially, experts had predicted a smaller increase of 8.7%. As a result, the minimum pension is expected to rise to approximately 636-637 leva.

The Ministry of Finance also confirmed that the COVID supplement will continue to apply to newly granted pensions next year. This follows an analysis conducted by the Ministry of Social Affairs, which had suggested eliminating the supplement. The Ministry of Social Affairs argued that, according to the International Monetary Fund's assessment, the supplement had significantly increased pension costs and had effectively become a part of the pension formula, thereby deviating from the principle of "contribution-rights."

Additionally, the Ministry of Finance is considering changes to the annual pension update process, which follows the Swiss rule. One proposal is to adjust the weighting of the two components that currently determine the increase: growth in insurance income and inflation. There is also the possibility of moving the pension update to April rather than July.

Another proposal from the Ministry of Social Affairs involves converting pensions not related to employment into monthly financial benefits managed by the Social Assistance Agency. To address issues with the payment of disability pensions beyond the validity of TELK (Medical Expert Commission) decisions, the ministry is advocating for stricter adherence to TELK decision deadlines to prevent unlawful payments.

Furthermore, the Ministry of Social Affairs suggested introducing a mechanism to set minimum and maximum insurance amounts, with the goal of reducing the share of insured individuals who report significantly lower incomes. Another notable proposal is to remove the pension cap of 3,400 leva to encourage people to insure themselves based on their actual earnings.