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Official News

Wednesday, 19 March 2014

Low pensions were raised in the first place Poverty reduction indicators are eloquent



At the end of today’s Cabinet meeting, Prime Minister Tigran Sargsyan addressed the Minister of Labor and Social Affairs Artem Asatrânu with the question regarding the impact of this January 1 rise in pensions on poverty reduction in Armenia.

“It is no secret that of 550 thousand pensioners, 350 thousand are faced with the problem of poverty. As we raised pensions by 15% as of this January 1, we tried to firstly increase the pensions of those entitled to lower pensions. What happened as a result, Mr. Asatryan?”

Minister of Labor and Social Affairs Artem Asatryan - Mr. Prime Minister, as you know, AMD29 billion was included in the 2014 State budget only to raise pensions. Our analyses became the basis for a legislative initiative that we submitted to the National Assembly in order to ensure that the focus be moved on the most vulnerable pensioners. Up to January 1, 2014, according to our database, we had 68 thousands pensioners receiving pensions below the extreme poverty line, 230 thousand pensioners receiving pensions lower than the poverty line and 330 thousand pensioners receiving pensions below the upper poverty line. Here it should be noted that the actual level of poverty was established as early as in 2012 by the National Statistics Service, account taken of inflation forecasts.

Prime Minister Tigran Sargsyan – I understand that 300 thousand pensioners were below the poverty line last year.

Minister of Labor and Social Affairs Artem Asatryan – Yes, as a result, we managed to reduce about fivefold the number of pensioners below the extreme poverty line. As of January 1, 2014, their number went down to 12, 800 instead of 68 thousand. 230 thousand retirees below the poverty line stood at 138, 300 persons. Thus, the number of pensioners below the lowest poverty line was reduced by about 40 percent. Instead of 330 thousand retirees below the upper poverty line, now we have 292 thousand persons. Thus, the targeted increase in pensions helped reduce significantly the poverty level. We plan to make this a target next year as well, since the pensioners are the most risky group in terms of poverty. We also have data from the National Statistics Service on the way the rise in pensions is affecting poverty. In this regard, I think we will continue with this policy.

Prime Minister Tigran Sargsyan - I am asking you to provide comprehensive information to mass media, including last 5-6 years’ dynamics. It is clear we have not still managed a tangible improvement, especially as we consider that this year we had an unprecedented cold winter, and our citizens had to consume more electricity and gas as compared to last year. The increase in pensions will go to pay the bills. Nevertheless, there are significant changes, and we must continue with this strategy, seeing it as an effective tool for poverty reduction.
 

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