Armenia’s Ministry of Labor and Social Welfare has submitted a draft government decision for public discussion that would extend the 20% cashback program for pensioners and social benefit recipients through December 31, 2029.
Under the proposal, eligible individuals would continue receiving cashback on qualifying cashless transactions made using their pension or social benefit bank cards.
The refund would remain at 20% of eligible spending, with a maximum cashback amount of 10,000 Armenian drams, according to the proposed arrangements.
If approved, the extension would cover the period from January 1, 2027, through December 31, 2029.
The initiative is intended to provide additional financial support to pensioners and benefit recipients while encouraging the use of electronic payments.
How Does the 20% Cashback Program Work?
The cashback system allows eligible pensioners and social benefit recipients to recover part of the money they spend through qualifying cashless transactions.
For example, under a 20% cashback calculation:
A qualifying purchase of 10,000 AMD would generate 2,000 AMD in cashback.
Qualifying spending of 25,000 AMD would generate 5,000 AMD.
Qualifying spending of 50,000 AMD would generate 10,000 AMD, reaching the stated maximum.
These examples assume that the transactions meet the program’s eligibility requirements and that the recipient has not already reached the applicable cashback limit.
The initiative provides an additional financial benefit linked to card spending rather than a direct increase in the basic pension or social benefit amount.
Why Is the Government Proposing an Extension?
The existing cashback arrangements are scheduled to remain in effect until December 31, 2026.
The ministry’s new proposal seeks to continue the initiative for another three years, preventing the scheduled expiration of the program at the end of 2026.
According to the draft, the extended period would begin on January 1, 2027, and continue until December 31, 2029.
The proposal is being considered through a public consultation process before a final government decision is made.
Submitting a draft for public discussion does not, by itself, indicate that the government intends to cancel the program.
Public Debate Over Pension Support
The proposed extension has also prompted criticism concerning the adequacy of financial assistance available to pensioners.
In commentary accompanying the announcement, journalist Taguhi Aslanyan questioned the government’s broader approach to pension policy, public spending and the purchasing power of elderly citizens.
The commentary argued that cashback payments, although helpful, do not necessarily compensate for the financial pressure created by rising living costs.
It also raised questions about government spending priorities and whether future increases in pensions and social benefits would be sufficient to protect recipients against inflation.
These criticisms represent the author’s assessment of government policy rather than established findings about the authorities’ intentions.
In particular, speculation that the public consultation process might be used to justify ending the cashback initiative is not supported by the stated purpose of the draft, which is to extend the program.
Will Pension Payments Increase Alongside Inflation?
A separate issue raised in the public discussion concerns the possible indexation of pensions and social benefits.
Indexation generally refers to adjusting payments according to a specified economic indicator, such as inflation, to help preserve their purchasing power.
However, the actual impact depends on how the adjustment is calculated, when it is introduced and which recipients are covered.
The cashback extension proposal does not establish a new pension indexation formula or specify future increases in basic pension payments.
Consequently, the proposed continuation of cashback should be considered separately from any future government decisions concerning pension increases.
Why Does Inflation Matter for Pensioners?
Inflation can reduce the purchasing power of a fixed pension or social benefit.
When prices for food, utilities, medicine and other essential goods rise, households may need to spend more money to maintain the same standard of living.
Cashback programs can provide partial financial relief for eligible purchases, but their benefits depend on the amount of qualifying spending and the program’s maximum refund.
For individuals with limited income, the difference between receiving cashback and having a permanently higher pension may be significant.
A pension increase provides additional income according to the applicable payment rules, while cashback depends on eligible transactions.
Has the Cashback Extension Been Approved?
The extension remains a draft proposal submitted for public discussion.
If the government approves it, the program would continue from January 1, 2027, through December 31, 2029, with the stated 20% cashback rate and maximum refund of 10,000 AMD.
Until a final decision is adopted, the existing arrangements remain scheduled to expire on December 31, 2026.
For pensioners and social benefit recipients, the most important point is that the government is proposing to preserve the cashback initiative for an additional three years, rather than announcing its termination.
The final decision will determine whether the proposed extension takes effect and whether any additional changes are introduced before approval.
