The Government kept the bonus for minimum pensioners at $70,000: how much should it be if it were updated for inflation

The bonus of up to $70,000 for retirees receiving the minimum pension has been postponed until August, according to Decree 686/2026 published in the Official Gazette.

This bonus has been frozen since March 2024. If it had been adjusted along with other pension payments, its value should be $218,558. And the total minimum pension for August, instead of $489,775 ($419,775 + $70,000), should be $638,333 ($419,775 + $218,558).

This means the bonus has lost almost 70% of its value since it was frozen by the Executive Branch. Between month-on-month losses and the non-payment of Christmas bonuses due to the lack of adjustments, the difference to the detriment of retirees and pensioners amounts to $148,558 in August alone. The bonus is not included in the pension amount and is not counted towards the Christmas bonus payment.

The decision to freeze the bonus or pension supplement at $70,000 (March 2024) affects half of the retirees in the SIPA (Integrated Pension System), some 3 million people, plus another 1.5 million who receive the PUAM (Universal Pension for Older Adults) and non-contributory pensions.

The positive impact of the bonus has been decreasing over time, going from representing 52% of the minimum pension in March 2024 to 16% when it is paid in August. As long as the bonus remains frozen, this downward trend will intensify until it represents a negligible percentage of the total value.

Because of the frozen bonus, retirees receiving minimum pensions are losing ground to inflation every month. For example, between January and June of this year (the latest official data), inflation was 16.8%, but the total minimum pension increased from $410,880 to $473,318, a 15.2% increase. The Universal Pension for Older Adults (PUAM) saw a 14.6% increase in the first half of the year, and non-contributory pensions also rose by 14.2%.

The freezing of the bonus of up to $70,000 has reached the courts. In August of last year, the Third Chamber of the Social Security Court, in the case of Varela Alberto v. ANSeS, ruled that if a retiree suffered a loss exceeding 15%, the freeze would be confiscatory and violate Article 14 of the National Constitution.

And the government should reimburse that loss to the 4.5 million retirees and pensioners who receive that bonus and also grant the updated amount to new retirees and pensioners receiving minimum benefits. The government appealed the ruling.