Wealthy excluded from basic pension from April 2025

Basic pension of MVR 5,000 per month for people over the age of 65 will not be available to the wealthy, according to the proposed 2025 budget.

This policy adjustment aims to ensure the sustainability of pension funds as the country's life expectancy rises, leading to increased pension expenditure.

The finance ministry has projected that state spending on pensions will grow annually, with pension spending as a share of GDP currently just below 1 percent. This figure is expected to exceed 1 percent over the next decade, eventually reaching 2.8 percent of GDP, or approximately $8 billion, by 2055.

The budget proposal specifies that from April 2025, basic pension eligibility will be restricted to individuals with lower incomes, based on affordability criteria.

However, the budget does not provide details on the income threshold that will determine eligibility for higher-income earners.

Additionally, the finance ministry has indicated it will propose legislative amendments to address the issue of dual pension benefits for retirees receiving more than one pension, aiming to streamline the pension system and ensure equitable distribution.