Self-employed insurance premiums are increasing

The insurance contributions of freelancers at the level of inflation by 9.6%.

This increase brings charges of 20 euros in the first insurance category from 210 to 230 euros.

The insured have the possibility to freely choose the class of contributions they will pay.

At the same time, by decision of its Administration EFKA the possibility of choosing an insurance category is extended until February 12, 2023.

As the Ministry of Labor points out, a self-employed person with an annual income of 20,000 euros, who with the Katrougalou law initially paid 449 euros per month and with the law 4670/2020 (Vroutsi law) for the lower insurance category paid 210 euros, from now on from now on he will pay 230 euros. Accordingly, a self-employed person with an income of 30,000 euros, who with the Katrougalou law initially paid 674 euros and with the Vroutsi law limited his contributions to only 210 euros, will now also pay 230 euros. It is noted that over 80% of freelancers have chosen the lowest insurance category.

The announcement of the Ministry of Labor

By decision of the Deputy Minister of Labor and Social Affairs, Panos Tsakloglou and based on the provisions of Law 4670/2020, the contributions of self-employed professionals to the Electronic National Social Security Agency (e-EFKA) are adjusted based on inflation (9.6%) .

Thus, a self-employed person, with an annual income of 20,000 euros, who, with the Katrougalou law, initially paid 449 euros per month and, with the law 4670/2020 (Vroutsi law), for the lowest insurance category paid 210 euros, as of now and henceforth, he will pay 230 euros. Accordingly, a self-employed person, with an income of 30,000 euros, who, with the Katrougalou law, initially paid 674 euros and, with the Vroutsis law, limited his contributions to only 210 euros, will now also pay 230 euros. It is noted that over 80% of freelancers have chosen the lowest insurance category.

According to the decision, the new levies are effective from January 1, 2023 and are scaled across six different classes. The insured have the possibility to freely choose the class of contributions they will pay.

At the same time, by decision of the e-EFKA administration, the possibility of choosing an insurance category is extended until February 12, 2023.

“From the examples, which are attached, it appears that the contributions in 2023, after the adjustment, are significantly lower than those imposed in 2017 by the Katrougalou law, but also with the contributions established in 2019 by the previous government, after the storm of reactions caused by the Katrougalou law” says the Ministry of Labor and Social Affairs in a statement.

And he explains that the adjustment of contributions every year is necessary for the following reasons:

“First, because ignoring inflation in contributions will lead with mathematical certainty to lower pensions. If there was no contribution adjustment mechanism, we would be led to a depreciation of the value of the contributions, undermining the future pensions of the insured, especially in times of intense inflationary pressures, such as the one we are going through. For this reason, in every system of insurance contributions there is an adjustment mechanism, in order to ensure their real value.

Secondly, because the pensions of current retirees are covered to a significant extent by the contributions of the active insured. Our insurance system is pay-as-you-go, as is generally the case in Europe, which means that the pensions of current pensioners are largely covered by the contributions of active insured persons. Every adjustment of the pensions should be covered by corresponding contributions to the insurance funds. Otherwise, the insurance system will once again enter a vicious cycle of increasing deficits with obvious risks to its sustainability.

Thirdly, because our insurance system must operate in terms of fairness and proportional distribution of burdens, based on the capabilities of each insured person. Today, the paradox prevails that the main pension contributions of the self-employed who choose the first insurance category (more than 8 out of 10 choose this category) are even lower than those paid by workers who are paid the minimum wage! Specifically, in 2022, the monthly contribution for pension and health for the self-employed in the first insurance category was 210 euros per month. Correspondingly, the contributions of an employee who is paid the minimum wage, last year, after the double increase of the minimum wage, amounted to 225.4 euros per month (with a deduction for 14 wages). There is, in other words, the possibility that an employer pays for his own contributions less money than the contributions corresponding to his employee, who is paid the minimum wage!

The Deputy Minister of Labor and Social Affairs, Panos Tsakloglou, said: “According to the current law, the contributions of the self-employed and self-employed insurance classes for the years 2023 and 2024 are increased by the percentage change of the average annual general wage change index of the previous year, i.e. at 9.6% for the current year, according to ELSTAT.

The core of our insurance system is distributive. The readjustment of the contributions is necessary, so that on the one hand the pensions of the self-employed can ensure them a decent standard of living in the future and on the other hand to maintain the fiscal balance, given the increase in pensions, which is taking place after 12 years”.

* Indicative examples are attached for the amount of self-employed contributions, as they were formed under SYRIZA with the Katrougalou law, in 2020 with the Vroutsis law and in 2023.

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