La budget law 2023 carries with it important pension news 2023. Government it changed the inflation-based revaluation mechanism of pension treatments, moving from a method based on three brackets to another divided into six brackets. Added to this is a "bonus" intended only for minimum pensions which will raise the treatments by an additional 8 euros per month. Simply speaking, starting next year, the lowest checks up to four times the minimum will enjoy greater increases because they will be able to take advantage of a full reassessment (to which, for minimum pensions, the bonus is also added), while on checks equal to or greater than four times the minimum, the adjustment will be progressively cut. Let's move from theory to practice and see what that means.
Pensions 2023: from brackets to brackets
The equalization mechanism is nothing more than an adjustment of pensions to inflation which causes the checks to be adjusted on the basis of theconsumer price trends. Given the spike in inflation in 2022, the increase in pensions will be equally high next year, but not for everyone. How will it work?
To establish the percentage of revaluation so far the former Draghi government has used a mechanism a three brackets:
- 100% revaluation for pensions up to 4 times the minimum (in figures: 2.102 euros gross);
- 90% revaluation for pensions between 4 and 5 times the minimum (between 2.102 and 2.627 euros gross);
- revaluation to 75% on pensions exceeding 5 times the minimum (2.627 euros gross);
From 2023, as established in the Budget law, there will be a subdivision into 6 bands:
- 100% on pensions up to 4 times the minimum (2.102 euros gross),
- 80% on pensions between 4 and 5 times the minimum (2.102-2.627 euros gross),
- 55% on pensions between 5 and 6 times the minimum (2.627-3.152 euros gross),
- 50% on pensions between 6 and 8 times the minimum (3.152-4.203 euros gross)
- 40% on pensions between 8 and 10 times the minimum (4.203-5.254 euros gross),
- 35% on pensions over 10 times the minimum (above 5.254 euros gross).
Pensions 2023: the revaluation percentages
The answer depends on the amount of the checks and the percentage of revaluation applied. “full” revaluation – the one that applies to checks up to 4 times the minimum – means that the 2023 pensions will be increased by + 7,3 %, an adjustment calculated on the basis of the change in consumer prices provided by Istat on 3 November 2022 (however, inflation has risen further in recent months, which could lead to a further adjustment in the near future). AND What happens to higher pensions? In these cases, as mentioned, the revaluation percentage will progressively decrease as the amount increases and thus we will have:
- pensions above 4 times the minimum: revaluation of 5,6%,
- pensions between 5 and 6 times: revaluation at 4%,
- pensions between 6 and 8 times the minimum: revaluation to 3,65%,
- pension between 8 and 10 times the minimum: revaluation to 2,92%,
- pension exceeding 10 times the minimum: revaluation at 2,55%.
Pensions 2023: how much are the increases?
Moving from percentages to figures, it means that whoever has a gross pension up to €2.102 per month will recover all the inflation forecast by the Government. Taking practical examples, the minimum pensions from 525,38 euros will rise by 7,3% to 563,73 euros per month, 38,35 euros more per month (plus bonuses which we will discuss shortly). The treatments of 1 thousand euros gross will increase by 73 euros gross per month (about 53 euros net), those from 2 thousand euros gross they will go up by 110 euros a month and by 1.430 euros a year.
For all the others, the inflationary recovery will be lower and will depend on the bracket to which they belong.
Pensions 2023: the bonus for minimum treatments
The review of the pension revaluation mechanism, with the transition from 3 brackets to 6 brackets, will lead to savings. Unspent resources will be used to increase the amount of minimum pensions. Translated into simple terms, it means that for around 2 million people who receive the minimum treatments – equal to 525,38 euros, we recall – the 7,3% revaluation will be joined by a further 1,5% increase for a total of +8,8%. Starting from January 2023, the amount of minimum pensions will therefore rise to around 570 euros per month. It will arrive in 2024 a further increase of 2,7%, always to be added to 7,3% (total +10%) which will determine an increase to 578 euros per month.
