Can The Government Decrease The Rate Of Pension Due To High Inflation?


VIP Contributor
Pension is one of the ways many people survive in this world. After serving a company or a governmental organization for several years, many people are entitled to pension. This is why there is a fixed amount of income for each and every elderly citizens. However, there comes a time when a country suffers from great economical problems and this can be due to many reasons such as inflation. I live in a country where inflation is increasing at alarming rate and the prices of many things are increasing after a few days and I believe that the economy will be ruined. In case such kind of thing happens, do you think that the amount of pension people receive will also decrease? Can the economical problems of a country have an adverse effects on pension, too? What do you think?


Valued Contributor
Indeed pension is the life line of anyone that has served during his youthful life and has retired at old age. So at that point it will certainly be too late to start making plans on how to survive when someone is already old. Hence pensionis meant to make provision for all those contingencies. In some countries pension is compulsory for both private and public workers and while in some other country is not. In the face of an economic downturn or inflation then the government will be left with no choice then to cut down the pension, In other to meet the economic situation.


VIP Contributor
Our pension here by the government has suffered a failed promise. About 5 years ago there was the promise to increase the monthly pension by 1,000 pesos (that is $20) which is fair as to my estimate. The increase were to be implemented after 2 years and another increase after 4 years. But now it's been 5 years but the promised increase did not arrive. In fairness to our government I don't think the decrease in the pension will happen because the pensioners will definitely go on a protest march. The government pension here is very minimal and decreasing it is like insulting the pensioners. Until now I am still hoping that the promised increase in pension will be given to us soon. The reason of the government for the postponement of the increase is the pandemic.


VIP Contributor
Most countries have external debts so they hardly find the money for themselves to pay their debts for foreign countries so what about pension? They have hardly some funds to pay salaries or pensions or fixed amount of money they couldn't increase this due to inflation or any other reason because due to the economical problem that they have faced during the hole year of pay debts or loans.

Good luck

Valued Contributor
It is possible for government to decrease the rate of pension allowance paid when the income in the purse of the government is not even enough to pay salary for worker that are regular.They really find it difficult to pay pensioner their gratuity after serving for so many years


Verified member
There is a very small possibility that government pension in my country will be affected by the economic decline. It's the way the pension has been set up. Pensions aren't gratuitous. They are computed based on the value of contributions of a member and the employer over the employment period. Thus, the existing members are actually contributing to the payment of the pension. Our Social Security agency maintains funds that allow pensions to be paid for the next 7 or 10 years even without premium collections. These funds get depleted when increases in pensions are granted. A few years ago, a law was enacted to nurse the funds back to health by implementing planned increases in contributions for the next 5 years.​