Government to start paying out €63m energy bonus scheme in April

Goran Stanzl/PIXSELL

The Croatian government will start paying out one-off bonuses to pensioners, state agency Hina said on Thursday, as part of an effort to help vulnerable groups deal with exploding energy prices.

According to the plan announced by the Ministry of Labor in February, all pensioners receiving a pension of 4,000 kuna (€530) or less will be eligible for the scheme. It is thought that there are 720,000 people in this category, or close to 60 percent out of Croatia’s 1.23 million pensioners.

Croatians have an average age of close to 42 years which makes them one one of the oldest populations in Europe – and around a third of its 3.88 million inhabitants are retired people. However, the pensions are notoriously low, which makes them one of the groups most vulnerable to inflation and energy price hikes.

The government’s scheme includes four categories, with people receiving smallest pensions getting the largest bonus. The most vulnerable category includes elderly people who get monthly pensions of up to 1,500 kuna (€200), who will get 1,200 kuna (€160). On the other end of the scale, pensioners normally getting anywhere from 3,000 (€400) to 4,000 kuna (€530) per month will receive a 400 kuna (€53) bonus.

The payments are expected to start on Friday, April 1, and everyone eligible should get the money “no later than May” the government said.

The government said that the scheme would cost around 480 million kuna (€63 million). The plan was announced in February as part of a larger set of measures the government adopted to combat energy prices, which they estimate to be worth 5 billion kuna (€660).

These also include a variety of subsidies for businesses, cuts to VAT rates and other taxes on energy, as well as lowering tax for a host of basic foodstuffs such as fresh meat, fish, eggs, fresh produce, and cooking oil.

Since prices of electricity and gas for households are set according to a preset formula which gets adjusted several times a year, the measures are set to coincide with the inevitable jump in prices expected on April 1. Even with the government’s plan, electricity prices for households are expected to go up by roughly 10 percent, on average, while prices of gas will go 16 percent up.

(€1 = 7.57 kuna)