How many pensioners see increases – What happens to those with a “personal difference” – What will happen to outstanding pensions
7 questions-answers about pension increases and the support of pensioners
1. Pensions are increasing after 10 years, but not all pensioners will see the increases. How many retirees actually see increases in their incomes?
The vast majority of pensioners, namely 2,499,285 out of a total of 2,634,786 (94.6%) see one, two or even three increases in their income. In fact, the increases are such that 1 out of 2 pensioners will receive at least one additional pension (many and amounts greater than one additional pension) in 2023. The increases began to be applied as early as December 20, 2022. These increases result:
• From the 7.75% increase given these days to more than 1.7 million pensioners.
• From the abolition of the special solidarity levy, which benefited over 900,000 pensioners.
• From the payment of the extraordinary financial aid of 250 euros, which was received by more than 1.2 million pensioners. The payment of an additional emergency aid of 250 euros for Easter had preceded this.
• From the payment of the 4th annual installment, provided for in Vroutsis law, for pensioners who applied before May 2016, with more than 30 years of insurance and concerns 230,000 pensioners.
2. The 7.75% increase in pensions covers only part of the loss of income pensioners lose to inflation. Should the government boost pensioners’ income more?
During these 3.5 years, the government of the New Republic took other measures to increase the income of workers. With the law 4670/2020 (Vroutsis law) he came to correct and abolish in practice a large part of the provisions of the Katrougalos law. Specifically:
1) Gave raises of up to 8% to over 224,000 retirees with over 30 years of Brutsis law insurance.
2) Reduced the tax rate from 22% to 9% in the lowest tax bracket. In simple words, where the pensioner used to pay 22 euros out of 100 euros to the tax office, he now gives 9 euros.
3) Proceeded to reduce pension withholding from 60% to 30% for working pensioners.
4) Abolished the maximum ceiling of 1,300 euros of the Katrougalos prefecture for those receiving main and auxiliary pensions.
5) He gave 3 times the emergency allowance at Christmas and Easter to support the income of over 1 million low pensioners.
6) Restored the €1.2 billion Katrougalos law cuts deemed unconstitutional by the CoE to all pensioners for the main pensions, exhausting the Economy’s fiscal limits and always respecting court decisions.
7) He proceeded to enact the increase in the national pension received by our expatriates from Northern Epirus and the former USSR, an increase that will appear in their accounts in the next period and is in addition to the 7.75% increase.
At the same time, the Government proceeded with additional reductions in pensioners’ income, such as:
• The abolition of the taxation of parental benefits.
• The real estate tax reduction by 35%.
• The establishment of the fuel pass and the market pass.
• The cumulative reduction of ENFIA by 35%
3. However, pensioners with a personal difference do not see any improvement in their income. Why is this happening;
The personal dispute was established by the Katrougalou Law (n. 4387/2016) in pensions that had been issued before 2016. The SYRIZA Government proceeded to establish the personal dispute in order to avoid pension cuts, but in exchange for not being able to increase the these pensions in the future only if they completely eliminate the personal difference. So about 1.5 million retirees found themselves with a “hidden debt” that they first had to eliminate before they could then see real increases in their pockets.
The elimination of their personal difference is done only through the increments. And in this direction we are working. The first increases came with the readjustment of the replenishment rates of Vroutsis. In addition, 83% of the 910,000 pensioners with a personal difference also saw an increase in their income as early as last December. Specifically, 260,000 of them received the extraordinary financial aid of 250 euros at Christmas (they had also received an additional 250 euros at Easter) and 515,000 saw an increase in their pensions through the abolition of the special solidarity levy. Therefore, these pensioners also see an increase in their income and at the same time a significant reduction in their personal difference, which will lead to permanent increases in the future.
4. Therefore, how many pensioners will be “erasing” their personal difference with the increase in pensions?
910,000 pensioners currently have a personal difference out of a total of 2,630,000 pensioners. In 2019, these pensioners with a personal difference reached 1.5 million. Today they have decreased by approximately 600,000 as with the implementation of the improved replenishment rates of V. Vroutsis, 280,000 of them eliminated their personal difference and saw increases. And on top of that, another 320,000 or so are zeroing out their personal difference with the 7.75% increases being given out these days and will see some increases as well.
5. Despite all this, there are also many pensioners who will not even receive the pension they are entitled to. When will the shame of pending pensions end?
The Government of New Democracy implemented a comprehensive policy to address the issue of pending pensions. Specifically, he proceeded:
• In the elimination of overdue main pensions as over 500,000 pensions were issued in the last 24 months. Now new pensions – whose applications were submitted within 2023 – are cleared in an average of 60 days, while in Germany it takes 74 days.
• He paid the pending pensioners the benefit amounts they were entitled to, which amounted to 500 million euros.
• Proceeded to liquidate the thousands of outstanding dividends in the Civil Servants’ Equity Fund and made it possible to pay them immediately every quarter.
• Completed the liquidation of the private sector lump sums and proceeds with the immediate liquidation of the overdue public sector lump sums.
• Advances rapidly in the liquidation of the pending auxiliary pensions (the condition was that the main pensions had been issued first) through digitization of procedures, creation of a Control Tower in the standards of the liquidation of the main pensions, reinforcement of the staff, etc.
6. What did SYRIZA do during the period of its government in order to strengthen the income of pensioners?
SYRIZA and Alexis Tsipras promise pensioners aid at a cost of over 6.5 billion. euros which they neither have nor know where to find them. They even go so far as to promise the abolition of the personal dispute that they themselves voted for and which is their creation! The truth, however, is that SYRIZA, during the period of its government, proceeded ONLY in reductions. Specifically:
1) Increasing the rate of health contribution from 4% to 6% for the total of the main pensions received by the pensioner and – for the first time – imposing a health contribution on supplementary pensions of 6%.
2) Gradual change of retirement age limits until 1/1/2022. The new limits: 62 years for full pension with 40 years of insurance and 67 years with 15 years (Law 4336/2015).
3) Reduction of the minimum pension from 486 euros to 392.7 euros and abolition of the minimum pension (Haikali decision 2015).
4) Recalculation of supplementary pensions from 1/6/2016 and cuts to pensioners with the sum of main and supplementary pension at 1,170 euros net (1,300 euros gross).
5) Increase of insurance contributions for the supplementary pension (ETEA) by one percentage point in total (from 3% for the insured and 3% for the employer, to 3.5% and 3.5% respectively) for 2016-2018 and by half a percentage point unit for 2019-2022, imposing a sustainability clause on the supplementary insurance fund.
6) Reductions – from 1/1/2016 – in the dividends of the Civil Servants Equity Fund by an average of 35%, an increase in the monthly contribution by 12.5% from 4% to 4.5% and the imposition of a sustainability clause.
7) For the lump sums from 1/1/2014, they are calculated according to the Virtual Capitalization model and until today only the contributions paid are returned without interest. Resulting in total reductions exceeding 25%.
8) Abolition of EKAS for 370,000 low-income pensioners, as well as changing the eligibility criteria until 12/31/2019.
9) “Cutting” of widow’s pensions by establishing both an age limit and limiting the pension paid to the survivor to 50% against 70% of the deceased’s pension.
10) Abolition of the spouse’s family allowance in the new main pensions, as well as complete abolition of family allowances in the new supplementary ones.
11) Reductions on average by 44% of ancillary benefits from 1/1/2015. Specifically, for the part of the new supplementary pensions with insurance period until 31/12/2014, with a factor of 0.45 per year and calculation of the pension with insurance period and from 1/1/2015 based on an individual account, with the notional capitalization model, which SYRIZA fought fanatically in the pre-election period.
12) Reduction of the National Pension for disability pensions. Only those with a disability rate of 80% or more receive a full national pension.
13) Increase in the cost of recognition of fictitious years.
14) A 60% reduction in the amount of the main and auxiliary pension of the beneficiaries, who undertake work or acquire a status or activity compulsorily subject to EFKA and ETEAEP insurance and a 100% reduction when they undertake work in the State or NPDD.
15) Freezing of pensions until 2022, limitation of future increases depending on growth (50%) and inflation (50%) with higher than current inflation.
16) Offset of increases from 2023 with the positive personal difference – after recalculation – until their complete elimination.
17) The main pensions issued from 13.5.2016 onwards, according to Law 4387/2016, are reduced on average by at least 20% to 35%.
7. Apart from the personal dispute, what other pending matters did the insured inherit from v. Katrougalou?
The SYRIZA Government inherited the following:
• Over 1,050,000 outstanding pension and insurance outstandings.
• Left €487 million in arrears to over 142,000 pending pensioners.
• It left an EFKA in total disorganization that issued only 900 pensions per day, while today 1,250 pensions are issued per day.
• Delivered a pension mechanism with an average time to issue a pension at 19 months. Today, the average time to issue a 2023 pension is 60 days.
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