Despite opposition from pensioners' associations and several parties, the increase will be a flat 6.5 euro for all pensioners, rather than a percentage increase.

If GDP growth is significantly higher, 3.5%, which is unlikely according to the latest forecasts, pensions would rise by 9.75 euro.

The portion of the bill dealing with curbs on public sector pay was adopted after the government forecaster, IMAD, downgraded its GDP growth forecast for the year and warned that the economy was slowly cooling down.

To shave an estimated EUR 100 million off the annual public sector wage bill, senior civil servants will forfeit a portion of performance bonuses and limits will be put in place regarding payment for higher workload.

The bill forms part of the 2020-2021 budget package that the National Assembly was debated yesterday. With dozens of amendments to process, the budget debate dragged well into the night.