‘Life goes on’:
New scheme improves lives of Georgia’s pensioners

The Government of Georgia is taking action to improve the lives of its retired population and help them get the best out of their later lives.

The current ruling Georgian Dream (GD) party has started working on a new program ‘Life goes on’, which will offer greater support for Georgia’s elderly citizens.

In particular, companies that employ pensioners will enjoy tax benefits, announced Prime Minister Giorgi Kvirikashvili while promoting the GD party at a pre-election campaign event in Georgia’s Racha region.

This does not imply the removal of pensions or social benefits. This is an opportunity for many experienced people to earn extra income. At the same time, they will share their experiences with the young generation,” said Kvirikashvili.

Georgia’s Ministry of Health and Social Affairs and the Ministry of Finance are currently jointly working on the program, which will officially be presented in the coming days, announced the PM’s press office.

The Government of Georgia has also started a major reform of the pension system, which will see pensioners receive money based on a model of private pension accumulation instead of the existing social pension package.

The new pension system, which has already been approved by Government, will launch next year in Georgia.

The pension reform included two components:

• Indexation of the existing social pension system; and
• Launch of private pension accumulation.

Specifically, indexation of the existing social pension system will create a mechanism that determines how much the pension should be increased annually. This method will allow the state to protect pensioners from inflation so retirees’ solvency rate does not worsen.

The private pension accumulation scheme was designed for future pensioners. In this regard money will be deducted from the salaries of the working population and saved in a special account until they reach the pension age. Ultimately these people will have an amount of money at their disposal when they retire.

About 35,000 people in Georgia started receiving an increased pension from last month following the Government’s pledge to allocate an additional 90 million GEL y/y for Georgia’s retired community and disabled persons.

From July 1, 2016 the Government has allocated 1.57 billion GEL from the state budget for pensions and social support. This was 120 million GEL more (8.3 percent) than what was allocated in 2012, where the state spent 1.45 billion GEL on this.

Georgia currently has 33,000 more retired people than in 2012. The pension is available to women aged 60 and older and men aged over 65.