The opposition party “Latvia First” (LPV) has submitted amendments to the “On State Pensions” law, proposing that the childcare period in employment record be fully accounted for until a child reaches the age of two, regardless of actual contributions made to the state budget.
- Expanded Coverage: Proposes extending the insurance record credit from 1.5 years to two years of childcare.
- State Funding: Mandates state social insurance contributions based on the previous year’s average national salary.
- Retroactive Application: Includes recalculations for individuals who took parental leave before the law’s enactment.
Addressing Pension Inequality
The LPV states that current legal regulations only count parental leave in the insurance record until a child reaches one and a half years of age. This limitation, combined with inconsistent social contributions, often prevents the full accumulation of pension capital.
According to the LPV, this creates a systemic disadvantage for individuals who care for their children until age two, as the missing period reduces the final calculation of their old-age pension.
Proposed State Contributions
To mitigate this social inequality, the bill proposes a state obligation to make social insurance contributions during the extended childcare period.
The party suggests that the contribution base should be no lower than the average salary established in the country for social contributions in the previous year. The Cabinet of Ministers would be tasked with determining the specific amount and procedure for these payments.
Additionally, the proposal stipulates that for individuals who took parental leave before the new law comes into force, the period will be recalculated and included in the insurance record under the updated conditions.
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