Mexico City, Mexico - México’s Senate approved changes to a bill last week that would exempt pensioners earning less than $28,048 pesos ($2,187 USD) monthly from paying federal income tax.

The bill that came from the Chamber of Deputies set the exemption at 25 times the minimum daily wage rate. The Senate reduced the rate proposed by the Chamber of Deputies because it would have cost the federal government $3.6 billion pesos ($281 million USD) a year. The Senate approved the changes with 84 votes for and three against.

Currently, all pensioners who earn more than the equivalent of nine times the minimum daily wage pay income tax.

Besides cutting taxes for low-income pensioners, the bill would also exempt pensioners who served in the Mexican Armed Forces and those who receive benefits from either federal or state social security.

The bill had been sitting in the Senate for a year and will now be sent back to the Chamber of Deputies for approval.