BUSINESS

Social security funds are facing a hole of 2 bln euros

The expected cut to third-party levies will inflict a blow on them By Christina Kopsini

A gap of 2 billion euros is opening before the government’s very eyes as the country’s social security funds will require additional financing if they are to continue to pay out pensions without any problems until the end of the year.

The 2-billion-euro deficit does not include possible losses from the new reductions to so-called third-party levies within the year, or the cuts in resources that partly finance the funds.

The third-party charges fetch some 2 billion euros into the pension funds annually. Some funds, including that for public works contractors, depend entirely on third-party levies such as collections from the certification of public works, levies imposed on all kinds of construction projects and the charge imposed on every piece of machinery that is imported for works.

There is a similar situation in the fund of law professionals, as well as in the farmers’ fund, which collects some 1 billion euros from so-called social resources.

The launch of the Development Ministry’s online platform for the registering of citizens’ complaints regarding third-party levies has generated major concern among social security funds, as they simply cannot afford any more reductions to their revenues at the moment.

The biggest headaches are building up at the Social Security Foundation (IKA), the Freelancers’ Fund (OAEE) and the farmers’ fund (OGA), as the problem with servicing expired contributions has grown to a point that resembles a payment stop in the funds that survive on freelancers’ contributions. The deficit at IKA amounts to 807.9 million euros, at OAEE it has come to 462.7 million, while at OGA it has reached 181 million euros.

The cash problems of social security funds that rely on freelance workers is reportedly the first issue that new Deputy Labor and Social Insurance Minister Antonis Bezas has been asked to resolve.

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