The Minister of Labour, Pension System, Family and Social Policy, Alen Ružić, stated on Friday that the draft state budget for 2026 includes an annual allowance for pensioners at a level of six euros per year of service, the same as last year. Pensioner trade unions are demanding an increase in this amount to ten or twelve euros.
Ružić told journalists after the ninth meeting of the Council for Pensioners and Elderly People that if a higher level of funding were to be considered, additional funds would be sought from reserves. He noted that each euro per year of service in the planning has an impact on the state budget of approximately 40 million euros. The government will make the decision on the annual allowance by 31 October, in line with constitutional requirements, with Ružić expressing satisfaction at the positive trend in the financial amounts being allocated to pensioners.
The president of the Croatian Pensioners' Association and the Council for Pensioners and Elderly People, Višnja Fortuna, stated that the association would like the annual allowance this year to be ten euros, which she considers a reasonable amount due to inflation. She stated that while there is no guarantee that an increase will occur, there is a sense that it might, with the decision to be made by the government in conjunction with its coalition partners. The president of the Pensioners' Trade Union, Višnja Stanišić, stated that her union believes the allowance should be 80 per cent of the current pension value, or approximately 12.50 euros, but that they would be satisfied with 12 euros.
Asked about the draft budget, Ružić said that his ministry is the first on the list of beneficiaries, with the largest rebalanced positive amount. He highlighted that slightly less than 1.2 billion euros will be allocated for the inclusive allowance, which is above expectations. He further stated that the Law on the Inclusive Allowance would be amended to better define the rights of beneficiaries, ensuring that no one's rights are removed.
When asked about the wages of personal assistants, who had protested the day before demanding a higher hourly rate, Ružić responded that they were in talks with 206 service providers, namely associations employing personal assistants. He announced that within the next ten days, a national panel of these employer associations would be formed, and that they were continuing to hire through their institutions. He noted that the protest had been organised by the Industrial Trade Union, which had sent a letter to the ministry that was currently being reviewed. He stated that they were engaging with all parties and were striving to adhere to all principles and positive regulations, without detriment to personal assistants or service users.
The topic of discussion for the participants of the Council was also the abolition of tax on pensions, which would take effect very soon, with participants recalling all the cumulative increases in financial benefits for pensioners. Ružić highlighted that while they were aware of inflationary pressures, the balance between inflation and the increase in income for the pensioner and general population was on the side of income growth. He noted that the anchoring of prices at the beginning of May 2025 had halted inflation in the area of consumer goods and drinks, which was at zero.
The Minister of Finance, Tomislav Ćorić, did not disclose the amount of money allocated for the annual allowance in the draft, as negotiations with pension representatives were still ongoing. He stated that the issue would come to the agenda in the second half of the month, certainly before the end of October, with the exact date to be agreed upon with the trade unions of state and public sector employees. He expected constructive talks, noting that current circumstances in the Croatian and global economy would be taken into account in the negotiations. The talks would concern the material rights of employees in the public sector, and were expected to begin in the second half of October. During the negotiations for 2026, the government and trade unions had not reached agreement on all points. The basic salary was increased in three steps by one percent, and from 1 December, the basic salary will be 1,035 euros gross. Trade unions in the public sector had previously demanded a stronger increase in the basic salary and a mechanism to automatically adjust salaries to inflation. The minister had previously stated that the new demands and salaries for 2027 would be discussed during the autumn.
The annual allowance was introduced last year as a permanent right for all pensioners. Its value is not determined as a flat rate for everyone, but is calculated by multiplying the number of full years of service by the value set by the government for one year of service. For 2025, this value was six euros per year of service, so a pensioner with 40 years of service received an allowance of 240 euros last year. It is not yet known what the value of one year of service will be in 2026. The government is required by law to set this value by 31 October, with the annual allowance paid in December. Pensioners do not need to submit a request, as the payment is made automatically.
The minister of finance revealed what lay behind the significant increase in expenditure on social benefits in the draft state budget. This line item increased by 226.8 million euros, with 185 million euros of additional funds allocated to the inclusive allowance. This is an increase compared to the amount planned for this purpose in the current year's budget. The inclusive allowance is intended for people with disabilities, with the level of benefits depending on the established level of support. Ćorić dismissed the view that the large portion of the state budget going to salaries, pensions, and social transfers was a cause for concern. He highlighted that the structure of the budget was such that one part was used to finance these rights, while the other was for investment projects and other initiatives. He noted that the government expected economic growth of more than two percent for 2026.
The draft budget increased revenues by 853 million euros, to 36.6 billion, while expenditure rose by 745 million, to 40.6 billion euros. More than 600 million euros in additional funds were linked to pensions and other pension income, wages of employees in the public sector, and social and maternity benefits.
