After announcing plans to raise state pensions by 10 per cent starting in January, government officials announced on Wednesday that the decision would not be implemented for at least another three months.

“The ministry will take all necessary steps to implement the 10 per cent raise in pensions within the next three months,” said Minister of Insurance and Social Affairs Nagwa Khalil.

She added that the delay would be used to determine exactly how the additional fiscal burden would impact the state budget.

The declaration enraged the board of Egypt’s General Union of Pensioners, which issued a formal statement denouncing the decision. In its statement, the union pointed to earlier ministry promises to implement the pensions raise no later than January.

The union board said it planned to hold meetings with the heads of all its provincial branches next week to discuss the issue and the possibility of organising a sit-in protest.

According to union head and parliamentarian El-Badry Farghali, the pensions raise will cost the state no more than LE2 billion (some $331.6 million), while the government currently owes hundreds of billions of pounds to social insurance funds.

Union members and political activists accuse the government of having wasted some LE436 billion ($72.3 billion) of these social insurance funds to finance state projects. Activists charge the regime of ousted president Hosni Mubarak with having illegally used social insurance funds to support its annual budget.

Following Egypt’s January revolution, then finance minister Hazem El-Beblawi launched an investigation into the issue. In mid-September, he lodged a formal request with Egypt’s Central Auditing Agency (CAA) to investigate allegations regarding the use of social insurance funds in government spending.

Ahmed Hassan El-Borai, appointed labour minister in the wake of the revolution, filed a lawsuit in 2006 in which he argued that putting social insurance funds and pensions under the auspices of the finance ministry was unconstitutional.

Although a court ruled in El-Borai’s favour in June 2009, the government subsequently appealed the decision. Egypt’s Supreme Constitutional Court has yet to issue a final verdict in the case.