The settings most often used are 12 or 24 doses. There are, however, the 60 installments for those who are about to retire and owe up to 30,000 euros, the 240 installments for those who choose to settle debts through an extrajudicial mechanism and the option of a 10-year debt statute of limitations. The 4 arrangements that can erase debtors’ debts to EFKA are the following:
1 The fixed arrangement (all-weather arrangement) with 12 or 24 installments and an interest rate of 5.5%. It is joined by everyone at any time to reduce burdens and, most importantly, to prevent a small debt from growing from the surcharges that run at 8.5% annual interest and have no “ceiling”, but continue to be charged even when the debt doubles. If one takes into account that the interest rate freeze expires in a year and can jump from 5.5% to 8.5% in September 2025, then it becomes clear that borrowers have every reason to reconsider their options the law gives them to settle their debts before they become insolvent.
2 The arrangements for debtors who are about to retire with debts of up to 20,000 euros and up to 30,000 euros in the EFKA and up to 6,000 euros or up to 10,000 euros in the OGA. For debts up to 20,000 euros (or up to 6,000 euros for the OGA) and it is foreseen to “pay off” debts with 60 installments that will be withheld from the pension. For a debt of 20,000 euros to the EFKA, the withholding is 333 euros from the pension, for a debt of 15,000 euros the withholding is 250 euros per month from the pension, while in the OGA the maximum withholding amount of the pension against the debt reaches 100 euros per month for 60 months. For the pension with a debt of up to 30,000 euros to the EFKA and up to 10,000 euros to the OGA, pension applications are submitted, but it remains to submit applications to the special platform of the EFKA, which will check whether the conditions for the debtors’ inclusion in the regulation are met (limit deposits up to 12,000 euros, 20-year contribution payment, age 67 or 62). In this arrangement, the pension will be issued and 60% will be withheld until the debt falls from 30,000 to 20,000 euros for the EFKA and from 10,000 euros to 6,000 euros for the OGA. Once debtors reach these limits, they will receive the entire pension and the remaining debt will be paid in 60 installments with pension withheld.
3 Debt settlement through the out-of-court mechanism. In this arrangement, the installments reach 240 for debts to the State (AADE/DOU) and Social Security Agencies (EFKA/KEAO and up to 420 if there are also debts to banks. A key part of debt settlement with the out-of-court debt settlement mechanism is the partial cancellation of debt, up to 75% of the basic debt to the State, up to 85% of the overdue debt increments to AADE and EFKA and up to 95% of the AADE fines. The disadvantage of the extrajudicial mechanism is that the debtors (and the guarantors) pledge their property against part of the debt. The mechanism produces an automatic debt settlement, based on the value of the property and disposable income, after covering the reasonable and inelastic expenses of the debtor, as well as co-debtors and guarantors if applicable for debts to banks. By March 2024, 27,380 debtors of the EFKA had joined for debts of 1.5 billion euros, of which 17,681 remain, while 8,759 abandoned it and only 940 managed to complete it.
4 The statute of limitations for part of the debt for debts certified to the Funds from 12/5/2016 onwards and at the time of their certification had completed 10 years. In this case, together with the debt, the insurance period is extinguished, which means that if the remaining insurance period is not sufficient for the debtor to receive a pension, then the partial statute of limitations and the settlement of the remaining debt are beneficial in order to complete the required pensionable period.
Debt statute of limitations
EFKA debtors can achieve a statute of limitations on debts to insurance funds that were accrued from 2016 onwards and go back more than 10 years. This indirect debt settlement concerns employers and freelancers, the self-employed and farmers. It facilitates those who have debts of more than 30,000 euros and cannot get a pension. The statute of limitations concerns the debts certified to the Funds from 12/5/2016 onwards and at the time of their certification they had completed 10 years. Debt statute of limitations includes three categories:
1 Debts over 10 years, for which there is no interrupting event (the debtor has not been served with a certificate of debt) are time-barred. For example, debt created in 2010 and not confirmed until 2022 (12 years) is time-barred due to the lapse of 10 years.
2 Debts for which the limitation period was interrupted until 11/05/2016 and on the date of application for retirement (2024) the limitation period (10 years) has passed since they were confirmed are time-barred. For example, a debt that was confirmed until 2012 and until 2022 there was no re-notification is statute-barred.
3 Debts for which the statute of limitations was interrupted from 12/5/2016 onwards are reviewed and the part of the debt beyond 10 years is time-barred. For example, debt created from 2001 and asserted in 2018 is time-barred for the period from 2001 to 2007 and the debt is limited to the years 2008-2018, which is within the 10-year statute of limitations.
One in two quits
The increase in current contributions, the increases in old debts that are running without brakes, but also the “coil” of… the next regulation that will settle debts left unpaid from the previous ones, are the reasons why one in two of the debtors of the EFKA that enter into regulation leaves it before the end of the semester.
According to the available data of the KEAO, at the end of March 2024 the total active arrangements were 326,081 and the adjusted amount 4,532,717,225 euros, while the integrated arrangements of those that came into force in the previous 5 years were a total of 672,237 for debts to the KEAO amounting to 3,255,089,382 euro.
Of the debtors who joined the KEAO arrangements, more than 51% end up leaving them, while in terms of the amount of debts, the corresponding percentage amounts to 72%. In practice, 7 out of 10 euros of the debt that goes into regulation remain uncollected and return to the debtors’ tab with more surcharges.
The result is that the debts to the EFKA are increasing and the freelancers who have 50% of the debts (about 24 billion euros) of the 48 billion euros debt to the Funds are eagerly asking for a new opportunity to reduce the burdens of of their old debts.
“Ice” in new settings
The possibility of a new regulation of general application like the old one of 120 installments (Law 4611/2019) does not appear on the government’s horizon, but nothing can be ruled out. The possibility of a new arrangement can be examined on a different basis and only when all debts are collected in one tab, while now a debtor who owes to IKA, TEB, TSAV and auxiliary has 4 different tabs for each debt. This is also the reason why there are 1.5 million debt registers (tabs), while the debtors do not exceed 600,000. The single record of all debts in one register will be ready by EFKA by 2025 and then a comprehensive debt settlement can be reviewed.
HOW DOES THE 10-YEAR LIMITATION APPLY AND WHAT IS THE COST?
| Total debt | Debt period | Total years owed | Year of certification of the debt | Period of debt that is time-barred due to 10 years | Period of debt that is not statute-barred | Debt that is time-barred | Debt that does not expire |
| 41.000 | 1998-2015 | 17 | 2016 (after 12/5) | 1998-2005 | 2006-2015 | 13.667 | 27.333 |
| 39.200 | 2000-2016 | 16 | 2017 | 2000-2006 | 2006-2015 | 13.067 | 26.133 |
| 37.400 | 2002-2017 | 15 | 2017 | 2002-2006 | 2007-2016 | 12.467 | 24.933 |
| 35.600 | 2003-2018 | 15 | 2018 | 2003-2007 | 2008-2017 | 11.867 | 23.733 |
| 33.800 | 2003-2019 | 16 | 2019 | 2003-2008 | 2009-2018 | 14.500 | 22.533 |
| 32.000 | 2004-2020 | 16 | 2020 | 2004-2009 | 2010-2019 | 16.000 | 21.333 |
| 30.200 | 2005-2021 | 16 | 2021 | 2005-2010 | 2011-2020 | 10.067 | 20.133 |
| 28.400 | 2006-2022 | 16 | 2022 | 2006-2011 | 2012-2021 | 9.467 | 18.933 |
| 7.000 | 2003-2007 | 4 | 2018 | 2003-2007 | – | 7.000 | 0 |
| 10.000 | 2002-2008 | 6 | 2020 | 2002-2008 | – | 10.000 | 0 |
| 12.000 | 2000-2006 | 6 | 2018 | 2000-2006 | – | 12.000 | 0 |
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