Pension revaluation 2020: example increases equalization amounts

2020 pension revaluation: limited increase in the amount 2020 for both the equalization that will be very probable around 0.60%, but to be sure it is necessary to wait for the publication of the Mise decree, and for the 2020 mini-pension revaluation that will be really bad.

As always in January, the pension amounts paid by the different social security institutions such as the INPS, former INPDAP, INAIL, Inercassa undergo the ISTAT revaluation, ie, the so-called. automatic equalization of the amount compared to inflation, the cost of living.

Due to the effect of new 2020 Budget Law, pension benefits will increase and the increase will be spread over 6 separate rates:

• 100% for incomes up to 4 times the minimum amount (equal to 513 euros), that is for those who arrive to take a check for 2.052 euros.

• at 77% for treatments up to 5 times the minimum treatment;

• 52% up to 6 times;

• 47% up to 8 times;

• 45% up to 9 times;

• 40% for treatments over 9 times.

Then starting from 2022 the brackets will become 3: 100% revaluation up to 2.029 euros, 90% between 2.029 and 2.538 euros, 75% above that figure.

Translated means that 2 million and 800 thousand pensioners will collect about 3 euros more per year, or 25 cents per month, according to the calculations of Spi Cgil.

Pension revaluation 2020: what is it and how does it work?

What is the 2020 pension revaluation?

There revised ISTAT pensions, Is a percentage applied to pension amounts paid by social security institutions, INPS, INAIL, Inercassa, etc., it always happens every year, starting from January, this allows to adjust the amount of the pension toinflation index and cost of living, noted by ISTAT in the previous year and measured provisionally.

Pending publication with a specific decree of the Ministry of the Economy, which will take place by the end of November 2019, the effective pension revaluation rate 2020 it could very probably be even at 0.60%.

ISTAT revaluation pensions how it works: Pensions as other allowances paid for example by the INPS for unemployment, redundancy, mobility, etc. therefore benefit from automatic equalization, which is nothing more than a revaluation of the amounts based on inflation, that is, compared to the consumer price index of households in a given year.

• To determine the 2020 pension increase to be applied starting from 1 January, the ISTAT uses the consumer price index for families of workers and employees (IOF) recorded provisionally in December considering the first 9 months of the year and then settled definitively in the first three months of the new year.

• Therefore from January to October the index of revaluation to be applied to pensions it is provisional, becoming definitive with the new year that settles the last 3 months of the year, then October, November and December.

• As a result, the final revaluation at the beginning of the year settles the amount of pension checks, decreeing an increase on the check paid in January 2018.

Here is the news on what the 2020 pension reform provides.

Pension revaluation block 2020 in Budget Law:

Based on the provisions of the definitive text of the new Budget Law 2020, the extent of automatic pensions equalization, will be up to 4 times the minimum.

The ISTAT revaluation on 2020 pensions is due then of:

• 100% for incomes up to 4 times the minimum amount (equal to 513 euros), that is for those who arrive to take a check for 2.052 euros.

• at 77% for treatments up to 5 times the minimum treatment;

• 52% up to 6 times;

• 47% up to 8 times;

• 45% up to 9 times;

• 40% for treatments over 9 times.

The new percentages of pension equalization no longer apply for amount bands but on a decreasing index over the entire amount of the pension.

For the 2017 as a result of the Pension Stability Law, the block of revaluation it is once again, for the checks above 4 times the minimum, or, for those that exceed the 2000 euro gross.

Specifically, for pension checks of 4 times higher the automatic revaluation will be 75% instead of 90%; those over 5 times will be revalued by 50% instead of 75% and those by 6 times the minimum of 45% instead of 75%. this extension of the pension revaluation block, was decided by the Renzi Government, in order to find the appropriate part-time coverage at 63 years for workers close to retirement, female option, no-tax area for pensioners and safeguard for the exodus.

From 2018 le pensions have started to increase again as from January 2019, the provisional value relating to 2018 is still applied which is equal to + 1.1% which will lead to increased pensions regardless of the 2019 invalid citizenship pension, minimum and social allowance from February.

From 2019 on the other hand with the new Budget Law the ISTAT revaluation was blocked for 3 years to pensions exceeding 3 times the minimum:

• 97% up to 2029 euros;

• 77% up to 2,537 euros;

• 52% up to 3042 euros;

• 47% up to 4059;

• 45% up to 4566;

• 40% over 4566 euros.

From 2020 with the Budget Act 2020, here is the 2020 pension revaluation:

• 100% for incomes up to 4 times the minimum amount (equal to 513 euros), that is for those who arrive to take a check for 2.052 euros.

• at 77% for treatments up to 5 times the minimum treatment;

• 52% up to 6 times;

Pension revaluation 2020 for those who increase the amount?

THE new 2020 pension amounts, are published by the Institute in January and vary according to the amount of the check and the automatic reference equalization, set on the basis of inflation.

The inflation rate is expressed through the consumer price index for families of workers and employees (IOF) temporarily recorded in December 2019, taking into account the first 9 months of the year and then settled definitively in the first three months of the new year 2020.

Therefore, from January to October 2019, the provisional pension revaluation index is applied, and then in January – February and March 2020, a new and definitive index survey is carried out, on which it settles the last 3 months of the year , then October, November and December.

As a result, the final revaluation at the beginning of the year settles the amount of pension checks, decreeing an increase on the check paid in January 2020.

Pension revaluation 2020 example new amounts:

Here are the provisional increases regardless of the integration up to 780 euros of the citizenship pension:

• 2020 minimum pensions: the increase (still unofficial) should be 2.57 euros – from 513.01 euros to 515.58 euros in 2020.

2020 solidarity contribution: 5 brackets for gold pensions

The solidarity contribution on 2020 pensions is a tax levy provided for by last Budget Law which has established an increasing percentage to be applied to CDs. gold pensions.

The percentage amounts of the solidarity contribution on gold pensions above 100,000 euros will be applied for 5 years and will be from 15% to 40% based on 5 brackets.

15% will be applied to the part of the check exceeding 100 thousand euros and up to 130 thousand.

The 2020 solidarity contribution on gold pensions will certainly be reconfirmed by the new 2020 Budget Law.

Positive or negative adjustment in January 2020:

As we said in the paragraph on what is and how does automatic equalization on pensions work?, in January the balance of the amounts paid in October, November and December is paid to pensioners.

This adjustment takes place on the basis of the definitive index established by ISTAT which is usually always positive, which translated means adjustment in favor of the pensioner and therefore return of the amount actually due in the previous year.

What happens if the adjustment that is usually positive is negative instead?

If the provisionally allocated increase for the first 9 months of the year 2018 is not equal to or higher than that definitively recorded by the ISTAT, or, if the difference between the provisional and the definitive index is negative, the pensioners they must return the amount paid.