Starting July 1 2006 minimal pensions would increase from 72.45 leva to 85 leva, Labour and Social Policy Minister Emilia Maslarova said.

In this manner the minimal pension would equal 52 per cent of the minimal wage, Darik Radio reported.

Taxation would continue decreasing next year, aiding families maintain bigger portions of their income. The Cabinet would also discuss changes to the overall social policies, once Bulgaria joins the EU, Prime Minister Sergei Stanishev said previously.

According to Cabinet plans the minimal wage would increase to 200 leva in 2007. As a result of this development the national budget would lose 150 million leva. Additional losses are expected from VAT changes.

Budget income for 2007 is expected to reach 41.7 per cent of the GDP. Expenditure would total 40.9 per cent and the planned budget surplus is 0.8 per cent, Darik reported.