Government Approves Another Pension Increase

Citing improved pension tax collection, the government announced on Thursday another increase in its modest retirement benefits paid to some 530,000 elderly Armenians.

Labor and Social Affairs Minister Aghvan Vartanian said the average pension in the country will grow by 10 percent to approximately 10,500 drams ($23) a month starting from April 1. He said the increase was made possible by an almost 35 percent jump in social security contributions collected by the tax authorities in the first quarter of this year.

Proceeds from pension tax levied from both employers and employees from January through the end of this months totaled 12.8 billion drams ($28 million), according to official figures. Vartanian said the improvement was a result of the government’s decision late last year to shift responsibility for the collection of that tax from the State Pension Fund to the State Taxation Service.

The latter announced last January a crusade against endemic tax evasion and in particular the widespread underreporting of workers’ salaries by employers.

The increased pensions will still be below the official poverty line of about 13,000 drams per person. Analysts believe that it is set too low given the cost of life in Armenia.