Turkey's lowest pensioner salary to stay below hunger threshold after hike

Pensions are set to increase by at least 37.57%, placing the salary below the hunger threshold, while civil servant salaries will see a 49.2% increase, following Turkey's official annual inflation announcement for 2023. There will be a 25.6% hike in the special consumption tax on alcoholic beverages and fuel, and the ceiling rent increase rate applicable in workplaces will be set at 53.86%.

Duvar English

After government-run Turkish Statistical Institute (TÜİK) announced that the annual consumer price index (CPI) was 64.77 percent for 2023 and producer price index (PPI) was 44.22 percent, several increases in taxes, prices, and wages began to be implemented.

Lowest pensioner salary stays below hunger threshold

Pensioners' salaries will be increased by the PPI for the second half of the year, which was 37.5 percent, to cover the difference caused by the inflation. 

Nonetheless, this is not necessarily the official amount, as the government can add welfare share and an equal amount of pay rise for all pensioners.

Social security expert Özgür Erdursun stated that the lowest pension, which is currently 7,500 liras, was likely to be increased by 50 percent and pointed to 11,250 liras for the lowest pension.

Turkey’s hunger threshold reached 14,431 liras in December, data from the Confederation of Turkish Trade Unions (Türk-İş) revealed.

The salaries of civil servants and civil servant retirees will increase by 46.5 percent, after the sum of inflation difference and 15 percent increase based on collective bargaining agreement.

The lowest civil servant salary increased from 22,000 liras to 32,860 liras with a 46.25 percent increase. Civil servant pensioners' salaries increased from 9,876 liras to 14,739 liras with an increase of 46.25 percent.

The calculation of civil servant salary, including teachers, police, nurses, doctors, and engineers, was estimated according to a married civil servant with two children. The final raise rate and salaries will be determined by the Ministry of Treasury and Finance Ministry.

There are 5.3 million working and retired public employees in Turkey.

The inflation rate will be applied to social security and welfare payments as well.

The old-age pension of 2,348 liras, which is given to those aged 65 and over, increased to 3,504 liras. The pension of people with “40-69 percent disability” increased from 1,874 liras to 2,797 liras, while the pension of people “with people over 70 percent disability” increased from 2,811 liras to 4,196 liras. The 5,098 lira home care support increased to 7,608 lira.

The severance pay ceiling of 23,500 liras increased to 35,000 liras. The paid military service fee increased from 122,000 liras to 182,000 liras with an increase of 60,000 liras.

Over 25 pct hike to implemented on fuel, alcoholic beverages

The special consumption tax (ÖTV) on fuel and alcoholic beverages will be increased by 25.6 per cent, based on the PPI rate announced for the second half of 2023.

The minimum lump sum tax on beer will increase to 7.76 Turkish liras. The tax on one litre of rakı, traditional alcoholic beverage, increased from 380 liras to 478 liras. With the addition of value added tax (KDV) to this amount, the tax amount on one litre of raki increased to 573.75 liras.

Accordingly, the ÖTV amount taken from one litre of gasoline was increased from 7.53 liras to 9.82 liras with an increase of 2.30 liras (the inflation difference of 1.92 liras + 20 percent KDV).

The ÖTV of diesel, which was 7.05 liras, would be increased by 2.16 liras (1.80 liras + 20 percent KDV); thus, it would be 9.21 liras.

If the President does not use the cancellation authority given by the law, these amounts would be directly reflected in the prices on gas stations.

According to the latest PPI, business owners whose lease expires for their workplace in November will apply a ceiling increase of 53.86 percent in January.

While a 25 percent increase limit will be applied for residential rents until July 2, 2024, no such limit has applied for workplaces.

One dollar equals to 29.78 Turkish liras as of Jan. 3.