Favorable changes in the status of working pensioners as well as of debtors of EFKA who are unable to retire provides for the mini insurance, which is presented today at cabinet from the political leadership of the Ministry of Labor and Social Security. At the same time, a provision will be included for the expediting the issuance of supplementary pensions as well as an extension of the deadline for optional inclusion of insured persons in TEKA.
With the same bill, the radical restructuring of the operation of the Occupational Insurance Funds (TEA).
The axes of the changes are:
- the possibility of operating multi-employer funds,
- the improvement of the supervisory function, as well as
- the staggered taxation of the lump sum or monthly pension that the TEA will grant to the insured. The same taxation system will apply – for reasons of fairness – to group insurance policies provided by private insurance companies.
Changes to judges’ pensions
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Secure information from the “Imerisia” newspaper states that the same bill, now or later, will include the provision for judges’ pensionsin implementation of the decisions of the Plenary of the Court of Auditors. As “Imerisia” has written, the method of calculating pensions for all judges will change, outside of the EFKA system, from the passing of the law onwards, while only those who have appealed to the Court of Justice (about 400-450 people) will receive retroactively. . The new way of calculation will respect the court decision but will “scissor” the demands of the judges.
The personal difference allowance
This year’s will be legislated with the same bill personal difference allowance for all those with a pension of up to 1,600 euros and a personal difference of more than 10 euros as a result of which they lose the 3.1% increase. Around 750,000 pensioners will receive the emergency allowance before Christmas this year. The extraordinary one-off financial aid amounts to:
- To 200 euros for a pensioner of the e-EFKA to whom main old-age, disability or death pensions were paid in October 2023 for a cumulative total net pre-tax amount of up to 700 euros.
- To 150 euros for a pensioner of the e-EFKA to whom main old-age, disability or death pensions were paid in the month of October 2023 cumulatively of a total net pre-tax amount from 700.01 euros up to 1,100 euros.
- In 100 euros for a pensioner of the e-EFKA to whom main old-age, disability or death pensions were paid in October 2023 for a cumulative total net pre-tax amount from 1,100.01 euros up to 1,600 euros.
Maternity allowance
In addition, it is institutionalized maternity allowance for self-employed women and farmers.
Today, employed women, in a dependent labor relationship, are entitled to special maternity protection leave for 9 months with a monthly allowance from DYPA equal to the minimum wage. In other words, they receive an allowance from DYPA of 780 euros (with the current minimum) for 9 months to raise the child after the end of the sergeant’s license (which is also subsidized by EFKA and DYPA). Female workers even have the possibility to partially transfer the allowance to the father (for 7 months).
This right is extended to self-employed women, who are currently entitled to a maternity allowance for 4 months with a monthly amount of 150 euros, as well as to female farmers who do not receive any allowance at all. With the new regulation, self-employed mothers and female farmers will be entitled from 1/1/2024 to a special paid 9-month leave in the same way as the corresponding leave for working mothers with a dependent work relationship, with a monthly allowance from DYPA equal to the minimum wage. Enough:
Have financial awareness and insurance capacity for sickness benefits on the date of delivery
The applicant is not entitled to maternity allowance from another insurance organization.
The mini insurance will also include the provisions for the use of a prepaid card for the benefits of OPECA beneficiaries.
On the contrary, the reduction of widow’s pensions in the case of employment or retirement of the beneficiary will not be included. The matter is sensitive and the handling will be determined in collaboration with the Maximos Palace, in order to avoid strong reactions.
New “penalty” for working pensioners
In detail, the main provisions of the bill are the following:
Working pensioners: The provision for working pensioners provides from 1/1/2024 the abolition of the 30% penalty in their pension. Instead it is set monthly 10% tax on income from their work. The new regime favors the majority of working pensioners and aims to encourage them to declare their incomes in order to reduce undeclared work.
The favorable regulation also extends to pensioners with disabilities. Today disabled pensioners did not have the right to work without interrupting the disability pension and allowance with the exception of patients with psychiatric problems or mental retardation.
The new provision will allow work, in order for those who feel able to work to participate in the social process and increase their income. A necessary condition is to prove their insurance disability, which means that their income from work cannot be higher than that of an able-bodied worker.
The “penalty” for the self-employed and the exceptions
For the self-employed, the corresponding resource will amount to 50% of the selected insurance class. Special care is taken for those self-employed have an obligation to have supplementary insurance (lawyers, doctors, engineers, etc.), so that even there the burden ends up being half of the total contribution they pay for primary and supplementary insurance.
The declaration of retired job candidates will be made through the e-EFKA electronic platform.
The categories of employed pensioners who were exempted from the pension cut under the previous regime will be excluded from the new regulation, such as, for example, pensioners of the former OGA, those with many children with minor children, those receiving the extra-institutional allowance, the mentally ill, etc. a.
The ultimate goal of the reform of the pensioners’ employment regime is to increase their participation in the labor market, both to cover job vacancies, where there is a shortfall between supply and demand, and to extend their working life and boost their income . Since the rationalization of reservations, a part of the work currently carried out by pensioners in the informal sector of the economy is expected to be transferred to the formal sector, with the expectation of reintegrating many into the labor market, stimulating and further strengthening the long-term sustainability of the insurance system, simultaneously boosting government revenues.
New pension scheme for debtors
Today, self-employed debtors with debts of up to 20,000 euros do not receive a pension at all. With the new regulation, the debt limit is increased to 30,000 euros for freelancers and to 10,000 euros for farmers with terms and conditions (proving by removing their bank accounts that they are indigent and not defaulters). In particular, they should not have deposits of more than 15,000 euros.
Those who owe more than 30,000 euros (or more than 10,000 euros if they are farmers) will have to pay the excess amount in one go. As soon as the debt falls to 30,000 euros, the pension will be issued, which will be withheld at 60% until the debt falls to 20,000 euros. After 20,000 euros, the installment amount drops and the pension increases. The debt from 20,000 euros and below will be repaid in 60 installments. The same will happen to farmers with 10,000 euros and 6,000 euros of debt.
Fast track adjuncts
Expediting issuance of supplementary pensions: The mini-insurance will include a provision for expediting the issuance of supplementary pensions as the backlog of pensions remains at high levels. The provision will provide that pending applications will henceforth be considered on a 15-year basis and not on the basis of individual provisions.
It is noted that the 15-year period currently applies to the former IKA, while in the State you establish with the conditions of the main one (foundation with 25 years and 35 years). At the age of 25, the insured receives the supplementary pension at 67 even if he received the main pension much earlier (e.g. at 55 with 25 years of age and a minor). To get the auxiliary before 67, he must be 35 years old.
With the new provision, all civil servants will be able to establish a right to an auxiliary with 15 years. With the activation of the provision, according to EFKA circles, approximately 30,000 pending State aid will be automatically cleared.
OPECA benefits with plastic money
The bill will also include the provision for the payment of a large percentage of DYPA and OPECA benefits (with the exception of disability) with a physical prepaid card, as is now the case with half of the Minimum Guaranteed Income, as the other half is paid into bank accounts.
In practice, the amounts of the majority of social and welfare benefits, from child benefits, birth benefit, to unemployment benefits with the exception of disability benefits, will go into the prepaid card and not into bank accounts. In this way the approximately 2 million beneficiaries will be able to use the prepaid card to do their shopping.
In addition, the cardholder will transact immaterially, electronically, through e-shopping, e-banking and other online services.
The aim is to give “what is due, to those who are due, for exactly what is due” in order to combat tax evasion at the same time. We remind you that the increase in the use of plastic money throughout the economy has already boosted tax revenues.
Extension for TEKA
The deadline for voluntary insurance in the Auxiliary Capital Insurance Fund (TEKA) for all those who are already employed and under the age of 35, as well as those who did not have an auxiliary fund until now, is extended for one year. The insured persons in question can be voluntarily covered by applying to TEKA until the end of 2024.
New framework for TEA and group insurance policies
A radical restructuring of the operation of the Professional Insurance Funds (TEA) is foreseen by the provisions that will be included in the Insurance bill. The pensioner who will receive the supplement of the professional fund, will be able to choose the monthly payment (pension) or request to be paid in one lump sum the entire amount that he would receive in pensions for the following years.
Until today the lump sum was tax-free for this reason and the vast majority of the insured preferred the lump sum benefit over the pension which is taxed as income based on the scale.
The plan of the Ministry of Labor foresees henceforth the taxation of the lump sum to be twice that of the pensions and to be imposed incrementally up to 20% based on the years of insurance:
- For insured persons with up to 10 years of insurance, the taxation of lump sums will be 20% and 10% for pensions.
- For policyholders with 10 – 20 years of insurance, taxation will drop to 15% for the lump sum and 7.5% for the pension.
- For insured persons with more than 20 years of insurance, taxation will be 10% for the lump sum and 5% for the pension.
The taxation procedure will be applied from the passing of the law onwards. This means that the insurance contributions that have already been paid by the TEA insured will remain tax-free, as has been the case until now. Any taxation will concern the new contributions that will be paid, or the new insureds that will arise either in the current TEAs or in any created in the future.
Source: Daily
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Average pension in Greece 2023
Comprehensive Article on Favorable Changes in the Status of Working Pensioners and Debtors of EFKA
Greece has been making significant strides in reforming its pension system to benefit working pensioners, debtors of EFKA (Greek Social Security Organization), and other groups. The Ministry of Labor and Social Security has introduced a bill that includes favorable changes to the status of working pensioners, debtors of EFKA, and other categories.
Working Pensioners and Debtors of EFKA
The bill provides for the abolition of the 30% penalty in pensions for working pensioners from 1/1/2024. Instead, a monthly 10% tax on income from work will be introduced. This new regime aims to encourage working pensioners to declare their incomes and reduce undeclared work. Additionally, debtors of EFKA who are unable to retire will benefit from the mini insurance.
Radical Restructuring of Occupational Insurance Funds (TEA)
The bill also includes the radical restructuring of the operation of Occupational Insurance Funds (TEA). The axes of the changes are:
The possibility of operating multi-employer funds
The improvement of the supervisory function
* The staggered taxation of the lump sum or monthly pension that the TEA will grant to the insured, with the same taxation system applying to group insurance policies provided by private insurance companies.
Changes to Judges’ Pensions
According to the “Imerisia” newspaper, the bill will include a provision for judges’ pensions, implementing the decisions of the Plenary of the Court of Auditors. The method of calculating pensions for all judges will change, with only those who have appealed to the Court of Justice (about 400-450 people) receiving retroactively.
Personal Difference Allowance
The bill will also legislate a personal difference allowance for all those with a pension of up to 1,600 euros and a personal difference of more than 10 euros. Around 750,000 pensioners will receive the emergency allowance before Christmas this year. The extraordinary one-off financial aid amounts to 200 euros, 150 euros, or 100 euros, depending on the pension amount.
Maternity Allowance for Self-Employed Women and Farmers
The bill institutionalizes maternity allowance for self-employed women and farmers. Self-employed mothers and female farmers will be entitled to a special paid 9-month leave, with a monthly allowance from DYPA equal to the minimum wage, starting from 1/1/2024.
New ”Penalty” for Working Pensioners
The provision for working pensioners provides for the abolition of the 30% penalty in their pension, and instead, a monthly 10% tax on income from work will be introduced. This new regime aims to encourage working pensioners to declare their incomes and reduce undeclared work. The favorable regulation also extends to pensioners with disabilities, allowing them to work without interrupting their disability pension and allowance.
Greece’s pension system is undergoing significant changes to benefit various groups, including working pensioners, debtors of EFKA, judges, self-employed women, and farmers. These changes aim to encourage income declaration, reduce undeclared work, and provide better financial support to those in need.
References:
<a href="https://ec.europa.eu/social/main.jsp?catId=1112&intPage
