Changing the provisions on social transfer adjustment by amending legislation

The Government agreed to the proposal for the Implementation of the Republic of Slovenia’s Budget for 2023 and 2024 Act. Among other things, these proposals relate to the increase in the lumpsum grants to municipalities and change the provision regarding the adjustment of social transfers.

The proposed amendments take into account the agreement on the amount of lumpsum grants to municipalities for 2024 and 2025, and the additional financing of labour costs of work in public institutions, which the Government concluded with municipal associations. In both years, lumpsum grants to municipalities will total EUR 725; moreover, municipalities will receive an additional EUR 20 million and EUR 34 million to finance indirect users' higher labour costs in 2024 and 2025, respectively. Municipalities will receive these additional funds to finance labour costs in different amounts. The aforementioned additional funds will be paid to the municipalities in a single instalment no later than by the end of June each year. ​

The amendment also introduces an arrangement according to which municipalities will receive funds from the Recovery and Resilience Facility one day before the deadline for payment to the contractor, provided that they submit the underlying documents 15 days in advance.

The amendments also provide that transfers, which are subject to adjustment under the Act Regulating Adjustments of Transfers to Individuals and Households in the Republic of Slovenia, will be adjusted by 70 percent of the consumer price index in in 2024, as determined by the Statistical Office in the period December 2022-December 2023.

A somewhat limited adjustment is used to maintain, to a certain extent, the standard of living of social transfer recipients, while at the same time limiting the pressures on the growth of inflation. The automatic indexation of social transfers with inflation is one of the factors that may cause additional inflationary pressures in an environment with relatively high inflation, and thereby contribute to the persistence of inflation. It should be noted that social transfers were already adjusted by 10.3 percent this year and that the Government has also been taking other measures to curb the cost of living increase.

The proposed amendments override the provision of the proposed Article according to which the pay grade value for public employees will not be adjusted in 2024.

The proposed amendments also define more clearly the indexation of pensions. A partial, 8.2-percent indexation of pensions and other benefits will carried out in January 2024, and, pursuant to the Pension and Disability Insurance Act, the final indexation will be carried out in February, offsetting, at the same time, the partially indexed pension amount for January 2024.

Source: Ministry of Finance

Amendment to the Decree on the method of determining and calculating the contribution for ensuring support for the production of electricity from high-efficiency cogeneration and renewable energy sources

The Government issued a Decree Amending the Decree on the method of determining and calculating the contribution for ensuring support for the production of electricity from high-efficiency cogeneration and renewable energy sources.

For the purpose of reducing energy costs for households and the impact of such costs on inflation, the Government of the Republic of Slovenia adopted a temporary measure under which households will not be liable to pay a contribution for supporting electricity production in high-efficiency cogeneration and from renewable energy sources in the period 1 November 2023-31 December 2024.  The change will take effect on the electricity bill date for December 2023.

Source: Ministry of the Environment, Climate and Energy