Sinkevičius rules out changes to pension indexation

Lithuanian Prime Minister Mindaugas Sinkevičius said there would be no changes to pension indexation or other benefits and support while he leads the government, LRT reported. He spoke after the ruling Social Democratic Party’s council discussed proposals to review automatic indexation of public spending, including pensions.

Vytenis Povilas Andriukaitis, the party’s honorary chairman, criticised the proposals at Saturday’s meeting. He said the party should make clear that pensions and other social benefits for families needing support must not be cut.

Andriukaitis also called for higher taxes on wealthier people, saying social inequality was growing. He said the number of millionaires in Lithuania had risen by 8% under the Social Democrats and argued that the country had a high level of social exclusion.

Juozas Olekas, speaker of Lithuania’s parliament and a Social Democrat, also urged the party to revisit the idea of taxing people with the highest incomes more heavily. He did not specify a proposed measure, but noted that a plan for a fourth, 36% personal income tax rate for top earners had been dropped during last year’s tax reform discussions.

Lithuania currently has three main personal income tax rates: 20%, 25% and 32%. The highest rate applies to income exceeding 60 average wages in the country.