Armenianow.com
Oct 8, 2004
Too Little Too Late?: Pensions increase, but will it matter?
By Marianna Grigoryan
ArmeniaNow Reporter
As of October 1 pensions have increased in Armenia. By the order of the
Government, the elderly who rely on the monthly stipend for survival will
find it slightly easier to cope. But only slightly.
Pensioners, who have worked 20 or more years, will get an extra 20 drams –
about four cents – for each year of work.
According to Ashot Abrahamyan, head of the social insurance department of
the State Fund for Social Insurance, the average increase is 700-800 drams –
about $1.40-1.60.
This implies that, in the average, a pensioner getting extra 800 drams can
additionally afford half an egg or 200 g of bread a day.
Far from a windfall, the news is nonetheless welcomed for elderly such as
Rima, aged 65, who spends her days from early morning until evening going
about Yerevan selling sweets.
“If the pensions do rise it will be very, very good,” the woman says
happily. “I will calm down a bit, the winter is coming up, cold, hard.”
Rima takes buns and cakes in a box she ties around her neck. She sways, the
box sways, as Rima fights for survival, making about 75 cents to $1 a day.
Rima gets 3,300 drams per month pension, about $6.60
What should I do?” she asks. “I am at a loss: to pay for the electricity or
buy bread with my pension. While the winter is soon to come, and I have no
idea what I’m going to do. There’s nothing we can do. I wish something
changed.”
According to statistics, there are 542,000 pensioners in Armenia, most of
whom live in dire conditions. (The pension age this year in Armenia is 59.5
for women and 63 for men.)
Having worked for decades, many pensioners despite their age have to earn
their living like Rima, selling sunflower seeds, bread, odds and ends to
survive somehow.
Abrahamyan says that, according to the decision, the extra payment is
envisaged only for the pensioners receiving insurance pensions and will have
no impact on the size of general pensions.
“People who have 5 and more years’ working experience receive insurance
pension. However, this law concerns only those pensioners who have 20 or
more years’ working experience,” he says.
To illustrate: The pension of those having 25 years’ working experience has
gone up from 6,500 to 7,000 drams ($13-14) and those having 40 years’
working experience will receive 11,320 drams ($22.50) a month instead of 10,
280 ($20.50).
Abrahamyan says that though the increase may seem negligible, it
significantly affects the budget. As a result, the budget spending is
expected to grow by 300-320 million drams ($600,000-640,000) per month.
“This is already the second pension increase this year. Last time in January
the pensions went up again by 20 drams for each year of the working
experience,” says Abrahamyan.
Pensioner Hakob Petrosian says that the pension increase is ominous.
“The pension increase every time brings about a rise in prices. The prices
of bread, electricity and everything else go up,” he says. “As a result, it
won’t make any difference for the pensioners, the things will only get worse
and worse as nobody cares for us. Whatever happens only we are to look after
ourselves at this age.”
“I know that this change is not essential. What’s the effect of such an
increase?” says Abrahamyan. “Nowadays, 700-800 drams can’t change anything.
But there’s nothing else we could do.”
Abrahamyan says that the increase will be periodical and that the next
supplement is expected in January when the basic pension will increase by
1,000 drams ($2) at once.
“Both in Yerevan and provinces, people get their pension a month later, so,
the pensioners will get their supplements starting from November,” says
Abrahamyan, “and they themselves will see whether the supplements make sense
at all.”