WILLEMSTAD – The political party PAR has included a proposal to increase the AOV pension to XCD 1,500 in its newly released 2025–2029 Action Agenda, citing growing concerns over declining purchasing power for retirees and the urgent need for pension reform. 

The proposal comes amid broader discussions about the sustainability of Curaçao’s pension system. In a press release dated July 16, 2025, the Minister of Finance explained the current status of AOV adjustment, indexation, and potential increases, referencing recent data presented by the International Monetary Fund (IMF) in late June. 

According to the IMF, the real purchasing power of AOV pensioners has declined by 23%, with the average monthly AOV benefit now equating to XCD 668 in real terms. For context, this amount represents just 32.7% of the minimum wage (XCD 2,040) in Curaçao as of 2025. These figures underscore the pressing need to reform the AOV pension legislation. 

Government and PAR Call for AOV Reform 

The current government has already acknowledged the need to increase AOV benefits and has included it in its 2025–2029 Governance Program. PAR is building on this commitment by proposing concrete measures to both fund and implement the pension increase. 

PAR’s Key Proposals 

To finance the proposed raise to XCD 1,500, PAR suggests two main alternatives: 

Granting Temporary Work Permits to Undocumented Residents 
By legalizing employment for undocumented persons—similar to measures implemented in Aruba—these individuals could contribute to the AOV pension fund and other social programs via direct taxation. With Curaçao’s population aging and the workforce shrinking, this would help offset the declining contributions to the fund. 

Transition to an Indirect Taxation Model 
Shifting from a system based primarily on direct income tax to one that emphasizes indirect taxes (such as VAT or consumption-based taxes) would ensure broader participation, including from undocumented residents and tourists, who currently make purchases without contributing to pension funding. 

Short-Term Support for Pensioners 

While advocating for a structural reform of the AOV system by January 2027, PAR is also pushing for immediate relief. The party proposes the introduction of a “supplement” of XCD 637, effective January 2026, which would temporarily bring the monthly AOV benefit up to XCD 1,500. This would improve the quality of life for all pensioners while the broader legal reform is being finalized. 

Funding the Supplement 

PAR suggests financing the supplement through increased government revenue generated by economic growth, supported by its earlier-mentioned proposals. The party recognizes, however, that the aging population is growing faster than the economy, making long-term sustainability a key concern.