BUSINESS

KEAO targets strategic dodgers among social security payment debtors

ROULA SALOUROU

TAGS: Finance

The non-payment of social security contributions – whether on purpose or not – to the country’s crumbling pension funds has grown to unprecedented proportions, with expired debts referred to the Center for the Collection of Social Security Arrears (KEAO) adding up to 16.6 billion euros in end-June from 15.7 billion in end-March.

Data show that many debtors who had sought to settle their arrears via a payment plan are unable to keep up with their installments, so that out of the 147,308 debt cases adjusted to payment plans only 50,249 remain on course and 8,842 have been successfully completed; the other 88,217 have fallen by the wayside, with those debts once more being described as “expired.”

It appears from the numbers that the hike imposed on contributions has not only failed to tackle the problem of pension funds’ financing but has also exacerbated it, as employers and employees are increasingly unable to pay their dues. Observers warn that the new hikes for both salaried employment and for the self-employed and farmers will lead to a collapse of funds’ revenues.

In fact, the total expired debts to social security funds are far above the 16.6 billion euros referred to KEAO (concerning debts of over 5,000 euros each) and are estimated to add up to around 25 billion euros.

In an effort to increase the funds’ revenues, KEAO is now proceeding to the separation of regular dodgers from those who are genuinely unable to pay due to financial restrictions, imposing strict measures on the former through a campaign of repossession notices and through corporate insolvency inspections. A few days ago KEAO obtained full access to the bank accounts of debtors so that experts can assess the profile of those who have significant arrears by monitoring their bank transactions.

The Labor and Social Security Ministry, meanwhile, will try to convince the country’s creditors to agree to the reentry into a payment plan of debtors who may have missed installments by mistake or for reasons beyond their control.

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