The percentage of salary increases stems from the transitional agreement between social partners on the Cost of Living Allowance (ATA), which stipulates payment of 66.7% of the inflation increase.
Employees in the public and wider public sector, as well as those in the private sector receiving ATA, will see salary increases slightly above 1% starting from 1st January.
This was detailed in a circular issued by the Ministry of Finance shortly after the announcement of December’s inflation rate by the Statistical Service.
This year’s ATA payments are based on the latest agreement between social partners, which stipulates payment of 66.7% of the inflation increase from the previous year, provided there is economic growth (up from the previous 50%).
According to the Ministry’s circular, the average Consumer Price Index for 2024, excluding the impact of increased consumption taxes, reached 113.46 points compared to 111.38 points the previous year (base year 2015), reflecting an increase of 1.87%.
However, due to budgetary arrangements based on the transitional ATA agreement, salaries will increase by 1.25% instead of 1.87%.
The Ministry’s circular specifies that from 1st January 2025, for a period of twelve months, a 1.25% adjustment will be incorporated into the cost-of-living allowance, which will rise from 355.29% to 360.98% on basic salaries, with a minimum allowance of €13,786.
It is noted that the transitional agreement on ATA will be subject to social dialogue this year as it is set to “expire” in mid-June.
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Source: Economytoday
