The government will change the rules for calculating the cost of living

The Russian government proposed changing the methodology for calculating the cost of living since 2026. The authorities plan to stop calculating payments based on the income of Russians due to rapidly growing inflation. This was reported by Vedomosti with reference to the bill, which was submitted to the State Duma along with the draft budget.

The authorities offer to focus on the level of inflation for the previous year when calculating the subsistence minimum. The size of the indexation will be determined individually every year, the amount of indexation will be submitted to the law on the federal budget.

Each subject of the country will set its own subsistence minimum, which will be derived on the basis of the coefficient of regional differentiation. This is explained by the fact that living in different regions is different.

This will be the fourth change in the methodology for calculating the cost of living in four years. Until the end of 2020, it was calculated on the basis of the minimum consumer basket. Since 2021, the cost of living was formed on the basis of median income of citizens: it amounted to 44.2% of the average per capita income for the previous year.

In 2022, President Vladimir Putin decided to install the cost of living individually each year together with the law on the draft federal budget. During this year, the authorities twice indexed the indicator.

Over these four years, the cost of living has grown from 11,329 to 15,298 rubles, that is, by 35%.