The Minister of Labor and Social Affairs, Kostis Hatzidakis, gave an order to immediately “run” the examination of citizens’ applications for the statute of limitations for unconfirmed debts beyond ten years, as long as they fall under the conditions of Law 4997/2022, to the Administration and its officials EFKA and KEAO in a meeting held today.

It is noted that in addition to Law 4997/2022, 2 related circulars have already been issued to EFKA executives: one in December 2022 (about a month after the passing of the law) and a supplementary one in February 2023. It has also already started for days, additional supplementary training of the competent officials for the processing of the relevant applications.

However, in the last few days it has been observed the phenomenon of the gathering of several applications throughout Greece for the statute of limitations of debts beyond ten years, for which the examination has not been completed.

In order to speed up the relevant procedures, a number of interventions were launched. Specifically:

• It was decided to complete before Easter the training of the competent employees in all the local offices of EFKA and at the same time to extend it to the heads of the revenue offices.
• Within the next few days, a new directive will be sent to the competent services, in order to send the relevant limitation requests to the KEAO without any delay. The KEAO will then send its own confirmation to the local addresses, which will automatically resolve any doubts the officials may have as to whether the applications fall within the provisions of the Limitation Act.
• The Minister was asked to forward to the contracting company a request to speed up the delivery of the relevant software, in order for the procedures to proceed even faster.

The meeting was attended by the Minister of Labor and Social Affairs Kostis Hatzidakis, the Deputy Minister of Social Security Panos Tsakloglou, the General Secretary of Social Security Paulina Karasiotou, the Commander of the EFKA Panagiotis Doufexis, the competent Deputy Commander of the EFKA Nikos Hourdakis, the Spokesman of the EFKA Omiros Tsapalos and the competent officials of KEAO and EFKA.

The Minister of Labor and Social Affairs, Kostis Hatzidakis, stated: “The laws must be implemented and indeed without delay. It cannot be tolerated that their implementation is hindered either by bureaucracy or by accountability. That is why I asked for the immediate implementation of a series of interventions aimed at speeding up the examination of requests. The goal is for the image to have improved significantly within the next month and for citizens to immediately receive the response that EFKA owes them.”

Questions and answers about beneficiaries and limitation conditions

1) How will the statute of limitations for debts to EFKA be implemented from now on?

Law 4997/2022 reduced the time available to EFKA to confirm and collect claims from unpaid insurance contributions to 10 years, from the current 20 years. If the claim is not asserted (claimed) within this period, it is time-barred. In this way, compliance is achieved with the decision of the Council of State which ruled that the single 20-year statute of limitations for EFKA requirements, which had been established with the “Katrougalou law”, is an excessive amount of time and goes against the principle of proportionality, with supreme court to set the decade as a reasonable time of limitation.
Then, from January 1, 2027, the limitation period becomes five years, so that it is equivalent to that which applies to the tax administration, therefore the EFKA will also have to certify within five years.

2) Who are the potential beneficiaries?

It applies to all categories of debtors of insurance contributions (employers, freelancers, self-employed, farmers). It also applies to EFKA, to the extent that it should certify claims closer to the date of origination of the debts, which boosts insurance revenues and discourages bad practices of excessive delays.

It is clarified that the employees are not affected by the limitation of the employer’s debts, as the insurance corresponding to these time-barred debts is still recognized for them.

In addition, the self-employed will be able to pay their debts, despite the statute of limitations, if they so wish, in order to recognize the period that was statute-barred as insurance time.

Finally, special care is taken for those debtors who settled debts beyond ten years, so that they are not wronged even though they were consistent. In these cases and upon request by the interested party, the prescribed amount is deducted from the settlement and the amounts paid cover the remaining debt.

Example 1
A self-employed person who submits a pension application in 2022 owes contributions for the years 2002-2011, which EFKA has not attributed to him until the time of application. These contributions concern a period of more than ten years and are therefore time-barred. Even if, in order to establish a pension right, the self-employed person still needs 5 years of official service. Then he has the possibility to pay for 5 of the 10 prescribed years, in order to recognize them as insurance time.
On the other hand, if EFKA had notified the insured of the proof of payment of said contributions within ten years of its creation (an event that interrupts the limitation period), then the insured owes all of the contributions.

Example 2
In 2019 it was confirmed and then, at the request of the insured, a debt from 2008 was settled, which with the provision in question refers to a period of more than ten years and therefore becomes time-barred. This debtor can, with his application, request the suspension of the arrangement and the deletion of his remaining debt. He can, however, continue to serve the arrangement, so that the insurance period corresponding to the debt is recognized.

3) When does the statute of limitations begin? When does the statute of limitations expire?

The statute of limitations begins on January 1 of the year following the year in which the work/service covered by the compulsory insurance was provided. If 10 years pass, i.e. if December 31st of the tenth year after the year in which the work/service was provided, without the insured (or the employer) having been notified in some way of his debt, it becomes time-barred. Debts incurred from 2026 onwards will be time-barred in 5 years.

4) In other words, if someone does not pay their debts within ten years, are they “erased”?

No, because the statute of limitations is interrupted every time the insured is notified that he owes insurance contributions. In such a case, the decade starts again from the notification.

If someone owes self-employment insurance contributions in 2018 and has not paid them, the statute of limitations begins on January 1, 2019. If they have not been notified that they owe by December 31, 2029, the claim is time-barred. However, if the debt is confirmed and an individual notice is sent to him on October 5, 2021, the statute of limitations extends until December 31, 2032. If an act of administrative enforcement (e.g. seizure of an asset) is subsequently carried out on March 10, 2030, the statute of limitations is extended until December 31, 2041.

5) In what ways is the limitation period interrupted?

The statute of limitations is interrupted when EFKA (or KEAO) notifies the insured about the debt in any way: by bailiff/summons, letter, electronic notification or takes an administrative enforcement measure for its collection (notification of individual certificate, confiscation, auction, etc. etc.).

6) Therefore, what is the essential effect of the reduction of the limitation period, since it can be continuously extended by notification of EFKA actions?

The statute of limitations is not an institution intended to avoid payment of debts. It is an institution that ensures legal certainty and the security of transactions. On the one hand, the insured must know what his debts are and that these must be settled at some point. On the other hand, EFKA (and KEAO, which is subordinate to EFKA) must not be inactive in the collection of insurance contributions and must be able to budget and collect its revenues in the context of good management of the organization. Accelerating the statute of limitations ensures that EFKA moves within acceptable time frames, while the possibility of interrupting the statute of limitations ensures that strategic defaulters do not avoid meeting their obligations.