BUSINESS

Courts question inclusion of social security arrears in debt relief criteria

ROULA SALOUROU

TAGS: Economy

In a number of recent cases, courts have denied citizens the right to have their debts restructured because judges have deemed an amendment made last year to allow people’s social security arrears to be included in their eligibility criteria was unconstitutional.

Kathimerini has seen several court decisions which clearly state that including citizens’ unpaid social security contributions in the debts used to calculate whether they can qualify for relief runs counter to the Greek Constitution.

In their reasoning, the courts say writing off debts to the social security funds would also mean the debtors losing the equivalent credits they need to qualify for a state pension when they retire.

The Labor Ministry is examining the matter. However, ministry sources point out it was Greece’s lenders which pushed for social security arrears to be included in the criteria for debt restructuring eligibility under Law 3869/2010 – colloquially known as the “Katseli law” after the ex-economy minister who drafted it, Louka Katseli.

The legislation is designed to help indebted households secure some relief from the debt burden as long as they fulfill certain requirements.

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