Increased Living Costs and Social Security Benefits

T HE inroads of inflation on the living standards of social security beneficiaries have become familiar in many countries and have induced counter-measures of various sorts. The diversity of legislative action undertaken on behalf of retired beneficiaries serves to underline the virtually unanimous approval of higher benefits when they are required. Inspection of individual programs shows some of the techniques that have been adopted for the common objective. Of the four countries whose programs are reviewed in some detail in this paper, Denmark and Sweden have experienced limited inflation, which has been largely offset for pensioners by automatic cost-of -living increases and more than offset in Sweden by other measures. Austria and Italy have had severe inflation, which has been met by many separate but related actions, each adapted to a specific anti-inflationary end. The effect of inflation on real income has been especially great in retirement and survivors insurance. The statutory benefit in these programs may be a flat sum or may depend on earnings over a long period of years; once the pension amount has been determined, it is commonly paid for the beneficiary’s life and can be changed only by special measures. That some special measures have been put, into effect is apparent from a review of the social security programs-particularly old-age, invalidity, and survivors insurance. In 34 of the 49 countries that have retirement or pension systems the pro-