Social benefits will increase annually from 2022, after being frozen at same level for 13 years

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Social benefits, such as unemployment benefits, heating allowances or the guaranteed minimum income, will be increased every year after the Parliament has adopted a bill providing for the annual indexation of the index on the basis of which these benefits are calculated. This indicator has not been increased for 13 years.

The social benchmark (SRI), against which all social benefits are calculated, will be indexed annually, with the average inflation rate of the previous year, according to the draft adopted by Parliament on Wednesday. The measure will apply from next year. Currently, the SRI has the value of 500 lei, the same level since 2008.

The social reference indicator is defined in the legislation as the unit expressed in lei at the level of which the monetary benefits are reported – except for the unemployment indemnity – supported from the unemployment insurance budget in order to employ certain categories of persons.

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„The value of the social reference indicator is updated, ex officio, every year, on March 1, with the average annual inflation rate from the previous year, the definitive indicator, communicated by the National Institute of Statistics. In the situation where the average annual inflation rate has a negative value, the last value of the reference social indicator is kept ”,  reads the adopted draft legislation.

This will only be valid if the annual inflation rate has had a positive value in the previous year. Instead, if the inflation negative (deflation), then the last SRI value is retained.

The measure will thus apply from 1 March 2022.

Last year, President Klaus Iohannis re-examined this project, saying that the increase in this indicator leads to directly proportional increases in the amounts of unemployment support measures, as well as the benefits and beneficiaries of social assistance, thus influencing the value of money benefits from the unemployment insurance and from the state budget.

At that time, the parliamentarians established a much more accelerated increase of the SRI, of 140%, from 500 lei to 1,200 lei, in only three years. The budgetary impact of a growth in a single year was calculated by the initiator of the law at 10.4 billion lei annually, or 0.99 percentage points of GDP (2019), while the Government estimated an annual budgetary impact of 856 million lei per month, that is, over 10 billion lei annually.

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