To satisfy a person's vital needs, he needs a certain supply of funds. Therefore, in each region a living wage is established for the population. It may change every quarter. The indicator is necessary to determine the poverty line. Citizens whose average income is below the subsistence level of their region of residence can count on financial support from the state.
Living wage - what is it?
In our country, this indicator is intended to assess the standard of living of the population in each region. In addition, it determines whether the family needs state support financially or not. If the total income of a family divided by the number of its members is less than the subsistence level of the region of residence, the family can apply for material support from the state in the form of various benefits, grants, subsidies and allowances. To do this, you need to apply to social security.
According to the law, the cost of living is understood as the value of the consumer basket. Its value is determined by the government every quarter.
The living wage is calculated based on the consumer basket and data from the federal executive body on the level of prices for food, non-food goods and services and expenses for mandatory fees and payments.
Comparison of the definition of the living wage in the old and new way
The main comparisons of methods for calculating the cost of living are presented in the table below.
| Criterion | Methodology for calculating PM up to 2021 inclusive | Methodology for calculating PM from 2021 |
| What determines the size of the PM | Cost of the consumer basket | Median income |
| Frequency of determining the PM value | 1 time per quarter | 1 time per year |
| Frequency of updating PM calculation rules | Not provided | At least once every 5 years |
| Possibility of reducing the PM value | Yes | No |
Until 2021, the cost of living directly depended on the cost of the consumer basket
. It included the cost of a minimum set of food and non-food essential goods, as well as the amount of mandatory fees and charges.
From 2021, the cost of living is calculated in relation to the median income, that is, the amount of income, half of Russians receive more, and the other - less. That is, the cost of the consumer basket is no longer important.
According to the old method, the cost of living was calculated quarterly
, since the cost of the consumer basket was constantly changing. For example, in the third quarter the cost of the consumer basket always decreased due to cheaper fruits and vegetables in season, and in the fourth quarter it increased. That is, the cost of living could either increase or decrease. From 2021, the PM value will be calculated once a year, and it will not be possible to reduce it.
And another important difference between calculation methods is their determination rules. Previously, Federal Law No. 134-FZ determined that the cost of living is determined depending on the cost of the consumer basket. The new edition states that the ratio of the cost of living to the median income should change at least once every 5 years
. That is, the government can increase the ratio, for example, to 50% or 60% (as in foreign countries), which will lead to an increase in the cost of living.
The cost of living now
As has already been said, the cost of living is established in each region separately. This is due to differences in price levels.
So, for example, it amounts to:
- In Moscow: per capita it is 18,029 rubles, for able-bodied citizens – 20,589 rubles, for pensioners – 13,496 rubles, for children 15,582 rubles;
- In St. Petersburg: per capita – 1158 rubles, for able-bodied citizens – 12796 rubles, for pensioners – 9458 rubles, for children – 1136 rubles.
Methodology for determining the cost of living from 2021
The concept of the subsistence minimum, the procedure for its calculation and the frequency of determination are prescribed in the Federal Law of October 24, 1997 No. 134-FZ “On the subsistence minimum in the Russian Federation.” At the end of last year, a new version of this law was adopted, which introduced fundamental changes to the previously used methodology.
From 2021, the cost of living in Russia is determined as a percentage of the median per capita income throughout the country.
Median per capita income is the amount of income relative to which half of Russians receive more and the other half receive less.
For the next five years, the cost of living is assumed to be 44.2% of the median per capita income
.
In 2021, the subsistence minimum is recognized as equal to 11,653 rubles
in accordance with the Decree of the Government of the Russian Federation of December 31, 2020 No. 2406. Subjects of the Russian Federation have the right to set their own subsistence level, but not less than the subsistence minimum per capita for the second quarter of 2020.
For each segment of the population, as before, its own subsistence level will be determined in the following percentage ratio to the subsistence minimum per capita:
- 109% for the working population;
- 86% for pensioners;
- 97% for children.
The cost of living for 2021 for each category of Russians is presented in the table below.
| Period | The cost of living in Russia, rub. | |||
| Per capita | For the working population | For pensioners | For children | |
| 01.01.2021 – 31.12.2021 | 11 653 | 12 702 | 10 022 | 11 303 |
Moreover, Federal Law No. 134-FZ states that the cost of living for the next year cannot be less than the cost of living in the current year
. This was done to prevent the financial condition of Russians from deteriorating.
Calculation of the cost of living - what is included in the consumer basket
Each region sets its own cost of living based on prices in the region, as well as climatic and environmental conditions. In fact, the value of this indicator is influenced by a whole list of factors. The characteristics of consumption of non-food goods and services depend on them. When calculating the cost of living, the Government Decree “On approval of Methodological Recommendations for determining the consumer basket for the main socio-demographic groups of the population in the constituent entities of the Russian Federation” is used.
This includes expenses for the consumer basket. Their cost is taken to be minimal.
So, the consumer basket includes:
- Food products: bread and other flour products, vegetables, fruits, sugar and confectionery, dairy products, meat, fish, eggs, butter, groceries.
This list is varied and of little weight. For example, an adult needs only 160 grams of fruit. At least this is the amount included in the consumer basket. This is less than the weight of 1 apple. Sugar in the consumer basket is indicated at 2 tablespoons per day.
- Industrial goods: summer outerwear and warm clothing, socks, tights, hats, shoes, bed linen, household goods, hygiene products, medicines, haberdashery.
For example, from a woman’s wardrobe, a woman can afford to buy only 1 bra per year, 1 skirt and 1 dress – once every 5 years. Services here are included: rent, heating, gas, electricity, cultural events, transport, hot and cold water.
The share of the cultural program here is only 5%. The legislator suggests that Russians go to the cinema, theater or other cultural event only once a year. and only if there are free funds left after other services.
This list is calculated among 3 social groups:
- able-bodied citizens;
- pensioners;
- children.
It turns out that legislators calculated how much money a family could live on for a whole month.
For such calculations, a commission consisting of representatives of the Ministry of Labor, Social Services and the Statistics Service meets in each region once every 5 years. A commission from the listed organizations collects all the necessary data to calculate the cost of living using special formulas and makes the calculation. This minimum will not include a trip to the Spa or a haircut from an expensive stylist. Red caviar and marbled beef will also not be taken into account, of course.
The commission has the goal of determining exactly what products a person needs so that he does not get sick or lose his mind. Here even the cultural and moral needs of a person are taken into account - going to the cinema or to an exhibition. True, from such calculations a person will only be able to go to the cinema or theater once a month. But this is only if a person sets the goal of living on a minimum in the region of residence.
Transition period
The transition period in relation to the new methodology for calculating the cost of living is established only for regions. In accordance with paragraph 3 of Article 4 of Federal Law No. 134-FZ, the transition period is from 2021 to 2025 inclusive.
During this period of time, the constituent entities of the Russian Federation must gradually increase the size of the regional subsistence minimum to the value calculated taking into account the coefficient of regional differentiation.
Regional differentiation coefficient
– this is the ratio of the national subsistence minimum per capita to the regional subsistence minimum per capita.
The cost of living in Russia in 2021
(as of June 1, 2021, rubles per month)
In Russia as a whole
| Whole population | 10 609 |
| Working population | 11 510 |
| Pensioners | 8 788 |
| Children | 10 383 |
What are the cost of living rates for pensioners?
Regional authorities set the minimum living wage for a pensioner at the end of each year. It represents the minimum pension amount for non-working pensioners. All unemployed pensioners living in the Russian Federation whose total income does not reach the subsistence level in the constituent entity of the Russian Federation must be paid. In this case, social supplements to the pension are established.
Are there living wages for children?
Yes, the cost of living per child is calculated based on the needs for food, treatment, education, clothing, hygiene products, and transportation costs. Due to constant changes in market prices, the value of the economic indicator is constantly indexed and adjusted.
Comments: 21
Your comment (question) If you have questions about this article, you can tell us. Our team consists of only experienced experts and specialists with specialized education. We will try to help you in this topic:
Author of the article: Klavdiya Treskova
Consultant, author Popovich Anna
Financial author Olga Pikhotskaya
- Yuri
07/13/2021 at 22:49 Why in Ryazan do I get paid PM differently every month?
Reply ↓ Anna Popovich
07/19/2021 at 16:11Dear Yuri, every quarter the amount of the subsistence minimum is approved by Government Decree. Its value is also influenced by seasonal fluctuations in food prices, economic, demographic, social and other factors.
Reply ↓
04/18/2021 at 10:47
Hello. The cost of living in our region is 35,000, the salary minus income tax is 31,000. Is this legal?
Reply ↓
- Anna Popovich
04/18/2021 at 20:33
Dear Lilia, according to the law, the minimum wage in a constituent entity of the Russian Federation cannot be lower than the minimum wage, and not the subsistence level.
Reply ↓
09.10.2020 at 00:50
Tell me, I’m a pensioner with a non-working pension 14915, this includes children’s benefits. I have a minor child. It turns out that my child’s living allowance is 1920 rubles. And I read that it should be 11200. Am I understanding correctly or am I confusing something. And where should I contact about this issue?
Reply ↓
- Anna Popovich
09.10.2020 at 10:12
Dear Natalya Pavlovna, for a full consultation, we recommend contacting the social protection department of your city.
Reply ↓
10/08/2020 at 01:04
I wanted to know that we are a family of 4 people, husband, wife, daughter and son. My husband’s salary is a maximum of dirty 36 thousand. I’m on maternity leave. And I have two children. We were told that in the Krasnodar region the cost of living should not exceed 44 thousand. And as I read, they wrote that the amount is then divided by 3 and then the number of family members. Then it’s rude my husband says 35,000 + I was paid maternity leave this month 18,000 = 53,000 thousand. We do everything by 3 = 17.700 and divide by 4. It turns out 4.417. So, or am I wrong about something???
Reply ↓
- Anna Popovich
08.10.2020 at 17:03
Dear Daria, The cost of living is calculated as follows: SD (average per capita family income) = D (profit of all members): Km (Calculation period for 3 months): H (number of people).
Reply ↓
09.21.2020 at 18:43
Hello! Please tell me why the minimum wage is equal to the federal minimum wage, and not the regional monthly wage? In Vorkuta the PM is larger than the federal PM. Why then is the regional subsistence level calculated if all calculations are made according to the federal one?
Reply ↓
- Anna Popovich
09.22.2020 at 09:26
Dear Elena, the procedure for calculating the minimum wage is established by law and is regulated by Federal Law No. 82-FZ “On the minimum wage.”
Reply ↓
09.21.2020 at 11:55
Hello! Please tell me, I gave birth to a second child, we want to apply for additional one-time benefits, we need to collect documents, and it is written not to exceed one and a half subsistence minimum for three months, tell me how to calculate this?
Reply ↓
- Anna Popovich
09.21.2020 at 12:36
Dear Irina, each region has its own cost of living. We recommend that you use for calculations the Government Decree “On approval of Methodological recommendations for determining the consumer basket for the main socio-demographic groups of the population in the constituent entities of the Russian Federation” and the Federal Law “On the subsistence level in the Russian Federation” No. 134-FZ.
Reply ↓
09.18.2020 at 18:48
Can a pension be lower than the subsistence level?
Reply ↓
- Anna Popovich
09.19.2020 at 19:19
Dear Irina, all non-working pensioners whose total amount of material support does not reach the pensioner’s subsistence level (PLS) in the region of his residence are provided with a federal or regional social supplement to their pension up to the PMS amount established in the region of residence of the pensioner.
Reply ↓
06/04/2020 at 12:07
Can a working pensioner receive a salary of 3 minimum wages, or should it be fixed?
Reply ↓
- Anna Popovich
06/04/2020 at 14:50
Dear Boris, the current Labor Code establishes time-based, piece-rate and commission wages, from which we can conclude that wages may not be fixed. But at the same time, the amount of remuneration cannot be expressed in variable quantities - that is, even non-fixed remuneration must have an established monetary equivalent in Russian rubles, and not in the size and quantity of the minimum wage.
Reply ↓
04/19/2020 at 00:13
I have been working in a hotel since November 1, 2019. Due to the pandemic, the hotel was not closed for quarantine. I work. There are 5 shifts of 12 hours a month, a shift costs 1300 with a tax deduction of 13%. There are no more payments. How correct is this on the part of the employer. When the cost of living is 11 thousand. How can you live for a month on 5655 rubles? Is the Organization doing the right thing by forcing you to work, and even for such pennies?
Reply ↓
- Anna Popovich
04/20/2020 at 20:37
Dear Lina, as a general rule, the employer is obliged to give the employee the opportunity to work out the norm of working hours established by law and enshrined in the contract for a specified period, and at the same time, for working out the norm for a month, the employee must be paid a salary of at least the minimum wage. Moreover, even when maintaining a time-based wage system and summarized recording of working time, payment cannot be lower than the minimum wage. But this issue can only be resolved with a detailed study of the conditions of your work and the employment contract.
Reply ↓
03/30/2020 at 14:45
We need to lock up the deputies for a month, give them the minimum wage, and let them bring food according to their orders. Let's see how they howl. In another month they would have adopted a law on the minimum wage = 25,000 rubles.
Reply ↓
01/20/2020 at 21:01
If for some reason the employee’s salary is less than the minimum wage, the employer must pay the missing amount through bonuses, allowances, or increase the salary by an additional agreement.© Don’t you think this is wrong. A bonus is an incentive BONUS, and “hold out” the salary up to the minimum wage at the expense of a bonus, this means depriving the employee of INCREASED wages for high-quality and conscientious work. Instead of “reinventing the wheel” and deceiving the people by raising wages to the minimum wage with incentive bonuses, it is necessary to return to the Labor Code an article about equating the rate of the first grade to the minimum wage, which was in the previous Labor Code and which was removed from the new one, which is where the movement into poverty began...
Reply ↓
- Anna Popovich
01/20/2020 at 23:19
Dear author, in the commentary material we are only talking about legal literacy and the employer’s obligation to pay employees in accordance with the minimum wage. As for bonuses, they are also part of the salary in accordance with Article 129 of the Labor Code of the Russian Federation, which means that at their expense the legally established minimum wage level can be achieved and this is legal.
Reply ↓
How to compare pension and cost of living?
Let's look at an example. According to the calculations of the Pension Fund, your pension amounted to an amount less than the subsistence level. This means that the number of rubles you will receive will increase by the monthly social supplement. As a result, your total income will not be below the subsistence level. How will this look in numbers?
Let’s say that the pension fund employees missed several years of your work experience in their calculations, and the amount of your pension turned out to be less than the subsistence minimum (sometimes the difference can be significant) - amounted to seven thousand rubles. In such cases, you can seek advice from a lawyer and clarify your options and rights.
If the pension is below the minimum monthly wage, a person can count on a social supplement
This means that, based on the law, you can definitely count on a social supplement to your pension in the amount of 1,726 rubles. As a result, the amount of a pension of seven thousand and a social supplement of 1,726 rubles will be 8,726 rubles, which corresponds to the minimum subsistence level. We take two years - the previous 2019 and the current 2021. If in 2021 the cost of living of a pensioner drops to 8,550 rubles, you will be given a social supplement of up to 8,726 rubles. The social significance of pension payments is great and is a barometer of the economic well-being of the state and society.
Note ! _ The indicator is closely related to social characteristics and influences ideas about the standard of living of the population. It is also taken into account when establishing such an important indicator as the minimum wage.
If we consider the situation of this issue across the country, we will see the following. In addition to Moscow, in sixteen regions the figure last year ranged from 9,013 rubles to 19,000 rubles. In accordance with the above, the social payment to the pensions of residents of this region will be larger.
Social supplement may vary depending on the region
Along with the federal subsistence minimum, there is also a subsistence minimum that is calculated in the regions.
Note ! _ In this regard, it is worth paying attention to the following facts. 70 constituent entities of the Russian Federation could offer their residents a subsistence minimum in 2021 that is equal to or even lower than the federal pensioner’s minimum wage of 8,726 rubles.
The experience of recent years shows that upcoming increases in the cost of living of a pensioner may turn out to be insignificant. The Department of Labor's calculations are based on economic reality. The amounts of regional surcharges are made in accordance with general trends characteristic of the entire country. If the federal PM indicators remained within 8,583 rubles, the regional indicators will remain approximately the same level. And, this means that you should not expect a significant increase in the cost of living for pensioners in comparison with 2021 and 2019.
