By Chrysostomos Tsoufis

Tax reductions, contributions, allowances, support, tax exemptions that cost billions, but few know how much these measures affect the lives of citizens. The effects of the measures are present in the various reports and the drafts or draft budgets, but they usually go into the details.

In the draft 2026 budget that it sent to the Commission, the Ministry of Finance calculates the benefit of the measures it has announced.

In scenario 1 measures the effect of the measures coming at the end of November, namely the return of a rent and the 250 euro allowance to pensioners under 65 with income and property criteria. The 2 meters have a cost of 590 million euros.

In scenario 2 tax reform, the new scale for rental income and increases in pensions, the minimum wage and the salaries of civil servants are calculated. Cost of measures for 2026 just over 2.1 billion euros.

The calculations of the Ministry of Finance say that in the measures of the first scenario, the poverty rate (the percentage of people whose equivalent disposable income falls below 60% of the median equivalent disposable income) which for 2025 was 16.9% is reduced by 0.6 points, while when the measures of 2026 are included we have an additional, threefold, reduction of 1.8 points.

The simulation also shows that measures help more the most elderly to escape the poverty line in the first scenario, while in the second the 25-64 year olds are the big losers:

AGE BASE 2025 Scenario 1 Scenario 2

0 – 14 18.4% -0.1 -2
15 – 24 22% -0.4 -2.2
25 – 49 15.7% -0.3 -1.4
50 – 64 16.3% -0.1 -0.8
65 – 79 14.8% -1.5 -2.2
80+ 19% -2.2 -4.4

In terms of the composition of the households, they are percentage-wise favoured more adults over 65 without children which is rather problematic since the targeting of the measures in scenario 2 is to address the demographic TOO and one would expect those with 3 or more children to be in first place. He would also expect that those with one or two children would be more favored than those with none.

HOUSEHOLD COMPOSITION BASE 2025 Scenario 1 and 2

1 adult <65 19.4% -0.7 & -1.2
1 adult >65 24.8% -3.5 & -5.5
1 adult with children 32.6% -0.5 & -1
2 adults <65 13.7% -0 & -0.6
2 adults 1 child 13.9% -0.2 & -1.6
2 adults with 2 children 15% -0.4 & -1.5
2 adults with at least 24.8% 0 & -3.3
3 children

Dividing the disposable income (after subtracting direct taxes and contributions and adding potential social transfers, i.e. benefits and pensions) of citizens into deciles, the simulation shows that percentage-wise the greatest improvement will be seen by those in in the lowest income category and the smallest those who are in the highest both in the first scenario. Indicative:

SCENARIO 1

Decimal Base 2025 Absolute change %

1 €3,959 €75 1.88
2 €6,397 €96 1.5
3 €7,805 €108 1.39
4 €9,150 €106 1.15
5 €10,494 €94 0.89
6 €11,902 €96 0.8
7 €13,599 €89 0.66
8 €15,671 €72 0.46
9 €18,785 €34 0.18
10 €31.055 €11 0.04

In Scenario 2 the picture changes as the positive impact is greater at higher incomes:

SCENARIO 2

Decimal Base 2025 Absolute change %

1 €3,959 €152 3.83
2 €6,397 €258 4.03
3 €7,805 €363 4.65
4 €9,150 €396 4.33
5 €10,494 €496 4.72
6 €11,902 €493 4.13
7 €13,599 €606 4.46
8 €15,671 €726 4.64
9 €18,785 €794 4.23
10 €31.055 €1520 4.9

In conclusion, there is a clear effect of the measures on increasing incomes and reducing poverty, although there is no lack of…misspellings….