Ruling party announces austerity measures, less free train rides for students and solidarity tax on special pensions

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The leaders of the ruling Social Democrat Party discussed several austerity measures at the Executive Committee meeting on Monday, with Finance minister Eugen Teodorovici announcing that the Government will adopt a draft law to restrict the number of free train rides for students. FinMin also proposed capping special pensions to RON 10,000.

Local media also reported before the PSD meeting that the Finance minister would also intend to cut the scholarships of the students who are not working during summer. The plan was that students are entitled to only 12 free train rides per year.

In retort, the National Alliance of the Students Organisations in Romania asked the ruling coalition to stop any action to restrict the rights of the students on the free train transportation and scholarships. Students argued that only 20 pc of the issued tickets are for students, urging investments to improve traveling conditions.

As for the scholarships, the Student Alliance said that, despite rises in the past years, no type of scholarship is covering the monthly expenses of students (food, clothes, books, attending various academic events).

“Regardless of the type of scholarship for students, this aid is granted for entire duration of the academic year (12 months), as their current expenditure are also present when there are no teaching activity (…) Students are facing the same subsistence-related problems also during the school vacations, and this why reducing the duration of granting scholarships is totally unjustified“, reads the Alliance’s press release.

At the same time, the intention was that bonuses granted to civil servants for hazardous working conditions to be capped to a fixed amount. Most of the clerks are currently getting a bonus of 15% of their salary for hazardous working conditions. Sources within the Government revealed that, as the unitary salary law is leading to pay rises in the upcoming years, those bonuses will put pressure on the budgets of the central administration and, for this reason, the Executive wants to set a fixed sum for these bonuses.

Special pension capped to RON 10,000

PSD has also agreed to tax all special pensions, more precisely pensions higher than RON 10,000 will be taxed by a so-called “solidarity tax”.

“I think a normal version is to cap special pensions to RON 10,000, and a solidarity tax will be applied to all that exceeds this sum. We think it is a correct and logical approach”, minister Teodorovici said.

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