VILNIUS — Lithuania’s Council of Ministers is completed a draft budget on the State Social Insurance Fund (SoDra) that contains increases in mandated contributions and a decrease in payout in an effort to keep the country’s primary social safety net solvent.
The SoDra covers pension and maternal benefits, among others for Lithuanians. The draft budget would cut pension benefits by 4-5 percent and 10 maternity benefits. Meanwhile SoDra fees, deducted from employee salaries, will be increased 2 percent.
The government says the austerity measures are needed to cover a 2 billion litai (€579 million) deficit, caused by the lack of contributions from employment taxes.
The budget proposal will be submitted to the Lithuanian parliament, where there will likely be intense debate the unpopular proposal.