Cuban Government Raises the Minimum Pension for the First Time in Ten Years

The sociologist Elaine Acosta believes that the increase in pensions “will not affect” the elderly, a traditionally vulnerable group. (14ymedio)

14ymedio bigger14ymedio, Mario J. Pentón / Luz Escobar, Havana/Miami | 31 October 2018 — Beginning in December, Cuban pensioners who receive the minimum monthly pension of 200 Cuban pesos (equivalent to $7.50 USD) will receive 242 CUP ($9.00 USD). The increase, announced Tuesday by Belkis Delgado, Director of Prevention, Assistance and Social Work of the Ministry of Labor and Social Security, is the first increase in the minimum pension in ten years. In addition, social assistance will be increased by 70 CUP ($3.00 USD).

The last time minimum pensions were increased was in 2008, when Raúl Castro raised pension and social assistance payments by 20%. At that time, the amount of the lowest benefits of this type was 164 CUP.

The measure will come into force in November, but the beneficiaries will not notice the increase until December because many of them have already received benefits for this coming month, when the increase had not yet been announced.

The official explained that the Government is working on a salary reform plan that would “not leaving anyone helpless” and facing “the low capacity to make purchases in the face of high prices in the retail market.”

The increase will affect a total of 445,748 retirees and 157,791 low-income people, and will cost 313 million pesos from the public treasury, according to the Ministry of Labor and Social Security.

“Since the Raulist reforms, or guidelines, began, subsidies have been eliminated which has especially affected vulnerable groups such as the elderly.” The reduction of subsidized products available through the ration book is a good example, explains sociologist Elaine Acosta, who considers that the increase in pensions “will not affect” that social group because of the country’s current economic situation.

Acosta, of Cuban origin and resident in Miami, believes that the State has turned over responsibility for the care of the elderly to families, which also do not have enough resources to alleviate the problem.

“On the one hand you have the authorities saying they want to confront the problem of an aging population and on the other hand they eliminate subsidies and cut the beneficiaries of social assistance, we have a problem with that,” she explained.

Cuba is the country with the oldest population in Latin America, with 20.1% of people over 60 years of age. This, together with the low levels of birth and fertility, have led the Government to face the challenge of having an increasingly small group of active working people support a growing number of retirees and pensioners.

Guillermina Laso, a former worker in the textile industry in Cienfuegos described the increase as “a joke in bad taste.”

“After so many years working for this Revolution and they give us an increase of 42 pesos, which isn’t enough to buy anything,” he protests.

“Now they say that they are going to increase pensions, but they do not say that it isn’t enough to buy what we need, nor that on the other hand they take our last centavo with the prices they put on products in the state stores,” he added.

Angela Iglesias, a retiree from Sancti Spíritus, points out that the increase is barely enough for “a bottle of oil and a pack of 10 sausages.”

“How dare they publicize this increase as if it were something we should be grateful for? We have worked for years and what we receive is barely enough to eat,” she added.

The high prices in state stores that charge in Cuban convertible pesos (CUC, each worth 25 CUP) as well as low salaries, whose average barely exceeds $30 a month, are some of the criticisms that have emerged in the consultation process on the constitutional reform project.

The academic Carmelo Mesa-Lago has calculated that with the end of Soviet subsidies in the early nineties, the purchasing power of retirees was 16% of what it was in 1989. According to Mesa-Lago, the real value of pensions has not recovered and last year was close to 50% of what it was compared to the period before the crisis.

“We must emphasize that this increase occurs at a time of greater differentiation of income. In Cuba the gap between those who receive more and have access to consumption is growing and, on the other hand, there is a large population that can not meet its basic needs,” says Elaine Acosta.


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