By Atom MarkarianThe Armenian government approved on Thursday modest increases in tiny state pensions and other social benefits paid to parents of newborn children and relatives of deceased persons.
One of the measures approved by ministers will raise from 7,200 drams to 7,900 drams ($14) the average amount of monthly retirement benefits starting from next month. Officials said the move is in line with the government’s pledge to equalize the pensions with the cost of its “food basket” by 2006. The physiological survival minimum is currently estimated at 10,370 drams per person.
The increase will hardly make much difference to the lives of some 530,000 Armenian pensioners, the vast majority of whom rely on their families for survival. It will require the state Social Security Fund to collect an extra 1.4 billion drams ($2.4 million) in extra revenues from employee taxes this year. The agency’s total budget is to make up 42.5 billion drams in 2003 and, according to its chairman Frunze Musheghian, will reach 48 billion drams next year.
Musheghian said the fund has substantially boosted its revenues in recent years and now pays the pensions on time. But he admitted that private employers continue to evade social security taxes en masse by underreporting the number of their workers and their wages. Only about 400,000 people are now officially listed on the payrolls of state and private enterprises across Armenia. The real employment rate is believed to be much higher.
Other government benefits will see a more tangible increase. The one-time payment for the birth of a child will now equal 35,000 drams, up from 5,900 drams. The measure is apparently aimed at boosting Armenia’s birth rate which has plummeted over the past decade.
Also, the families of elderly persons who die after reaching retirement age will get 75,000 drams, or 67 percent more than before, from the state for organizing their funeral. But the money will still not cover even half of minimum funeral expenses in Armenia.
(Photolur photo: Frunze Musheghian.)