Government Introduces 13th Pension: What You Need to Know About the New Rules

The government has submitted a new Pension Insurance Act to parliamentary procedure from its session on Thursday, which brings a key innovation, the introduction of an annual pension supplement, colloquially referred to as the 13th pension, but it will not be in full amount as it will depend on years of service.

– We are enhancing the rights of pensioners, strengthening the fairness and sustainability of the pension system, and taking important steps towards a safer and fairer future for all pensioners – stated Prime Minister Andrej Plenković.

The goal is to increase pensions and the adequacy of pensions, so that the overall average pension amounts to 800 euros by the end of the term, we are reducing differences in pensions, and enabling greater participation of pensioners in the labor market, said Minister of Labor, Pension System, Family and Social Policy Marin Piletić.

– The Pension Insurance Act (ZOMO) does not concern only 1,230,000 pensioners but also applies to all insured persons, of which there are 1,756,000 – emphasized Piletić.

New favorable formula for pension adjustment

The law introduces a new favorable formula for adjusting pensions twice a year in a ratio of 85 to 15 in favor of wage growth, for each child, 12 months will be added instead of the previous six months of service for mothers, which will represent an average pension increase of three percent for future beneficiaries for each child, and the bonus for later retirement is redefined, i.e., the condition of 35 years of service and the five-year limitation are abolished.

Introduction of a permanent annual supplement

A key innovation is the introduction of a permanent annual supplement for all pensioners. Although colloquially referred to as the 13th pension, it will not be in the full amount of the monthly pension. Regardless of the amount of pension income, the amount of the annual supplement is tied to full years of pensionable service, which is taken into account for calculating the amount of the pension, and for those beneficiaries whose pension is determined without considering pensionable service, a minimum period of 15 years is established for determining the annual supplement.

– The government will determine the amount of the annual supplement in October with a decision and payment in December, so it will already be paid in 2025 – noted Minister Piletić.

From January 1, 2026, the lowest pension will increase by about three percent, and disability pensions by 10 percent, the penalty for early retirement at the age of 70 is abolished, and pensioners who are employed after the age of 65 are allowed to work full-time with the payment of 50 percent of their pension.

– The current value of the pension for the lowest pensions will amount to 106 percent – he added.

The new law will allow craftsmen and the self-employed to acquire a pension amounting to 50 percent without interruption of work. Beneficiaries of disability pensions will be allowed to work up to 3.5 hours a day and will have their control checks abolished.

– We are also enabling the accumulation of service years on different bases and equating beneficiaries of disability pensions due to partial loss of working capacity with other beneficiaries – noted the minister.

The legislative proposal stipulates an increase in the threshold for determining the fact of maintenance for family members when exercising the right to a family pension to the amount of the lowest pension for 15 years of pensionable service if the family member lived in the same household with the deceased insured person or beneficiary, or if not, the threshold is prescribed at the amount of the lowest pension for 15 years of pensionable service increased by 20 percent.

The condition regarding the prescribed date for the existence of a common-law partnership on March 28, 2008, when it was introduced into the pension system, is also abolished.