The Institute for Market Economics warns that increasing social security contributions carries a risk of impoverishment of workers, an increase in households below the poverty line and a rise in inequalities.
The conclusion is from an analysis on the topic of the social security burden, which recalls that the medium-term budget forecast already includes an increase in the pension contribution by three percentage points by 2028.
In recent weeks, there has also been talk of an increase in health insurance.
The analysis by the Institute for Market Economics emphasizes that the increase in the social security burden guarantees a decline in disposable income, an increase in poverty and a deterioration in the living standards of all workers and their families. The researchers conclude that there is a high probability that in an attempt to relieve the pressure on the pension fund, problems will be created that the social system will have to solve.
The Institute has assessed the effect of the planned increase in the social security burden on household budgets, based on the latest available individual data from the Statistics of Income and Living Conditions for 2023.
In the calculations for each employee, the value of the social security contribution increases by three percentage points up to the maximum social security income. According to the assessment made in this way, the decrease in the distribution of income from 2023 is an average of 172 leva per month, with the assumption that for income from 2025 the effect would be even more serious.
As expected, the differences are large, with poorer households losing a proportionally larger share of their income.
For high-income households, the effect of the change is weak, due to the presence of a maximum social security income, which is now 4,130 leva. However, the gap between the best-paid workers and everyone else is increasing.