By Chrysostomos Tsoufis

Among the announcements of the Prime Minister in International Exhibition of Thessaloniki it will also be its reformation Solidarity Contribution which still burdens around 400,000 pensioners since 2010. The decision has been made and the Ministry of Labor is working on various scenarios to ease the burden on this particular group of taxpayers.

The so-called EAS is imposed with rates from 3% to 14% on all those who receive a main pension of more than €1,400 and an auxiliary pension of more than €300 (with rates of 3% to 10%) and brings significant revenues to the budget, around €500 million. The scaling of the rates is applied from the first euro and to the total amount is as follows:

For pensions €1,400-€1,700 3%
€1701-€2.000 6%
2001€-2.300€ 7%
€2,301-€2,600 9%
€2,601-€2,900 10%
€2,901-€3,200 12%
€3,201-€3,500 13%
>€3,500 14%

The first of the prevailing scenarios wants the rates to increase a little, but not to be imposed on the entire pension but only on the part of the pension that exceeds the ceiling of each bracket, just as it happens with income taxation.

In such an eventuality, a taxpayer of €1600 who under the current system is burdened with €48 (€1600 x 3%), could drop to €10 if it is assumed that the first rate would rise to 5% or to €20 if it were to rise to 10%. In the first case the relief is €38/month or €456/year, in the second case it is €28/month or €336/year.

The second scenario leaves the method of enforcement the same, i.e. throughout the pension and from the first euro. However, the escalation of rates, at least for the 2nd, 3rd and 4th tiers, should not be so steep, to be fairer for pensioners with pensions of up to €2,600. For example in the 2nd tier the rate will not double to 6% but will go from 3% to 4%. In the third tier it will be reduced to 5% from 7% and in the fourth to 6% from 9%.

So a pensioner of €2,000, from €120 will drop to €80 and will be reduced by €40/month or €480/year.

The rates remain the same for pensions above €2,600 for reasons of fairness since they concern far fewer senior pensioners.

There is also a third scenario that calls for the abolition of the EAS for the part of the supplementary pension with a benefit for pensioners from €10 to €71 per month.

At the same time, the leadership of the Ministry of Labor has pledged that from 2025 the ridiculous increases seen with pensioners will stop and they wanted thousands of them to either get much smaller increases or none at all, while in some cases they even got less than before due to the way the EAS is implemented.

This will stop from 2025 as the Ministry of Labor has made it clear that in the case of a negative difference – that is, when the solidarity contribution “eats” a part of the increase or causes a reduction in the pension – EFKA will cover it and the pensioner will enjoy the entire increase .