BUSINESS

Pensioners to return 'social dividend'

PROKOPIS HATZINIKOLAOU

TAGS: Finance

Salary workers, retirees on low pensions, property owners and families with three or more children will bear the brunt of the new austerity measures accompanying the 2018 budget, which come to 1.9 billion euros.

Next year the primary budget surplus will have to rise to 3.5 percent of gross domestic product, therefore more cuts will be required, with low-income pensioners – the recipients of next month’s so-called “social dividend” – set to contribute most, according to the new measures.

Retirees on low pensions will effectively have to return the handout they get in late December at the end of January, as the cost of pension interventions according to the midterm fiscal strategy plan amounts to 660 million euros. This is just 60 million euros shy of the social dividend’s 720 million euros that Prime Minister Alexis Tsipras promised this week.

The new measures for 2018 are set to be reflected in the final draft of the budget that is to be tabled in Parliament on Tuesday. They are likely to further increase the amount of expired debts to the state, after the addition of 34 billion euros from unpaid taxes and fines in the last three years, owing to the inability of most taxpayers to meet their obligations to the tax authorities.

Plans for next year provide for the further reduction of salaries in the public sector in the context of the single salary system, additional cuts to pensions and family benefits, as well as the abolition of the handout to most low-income pensioners (EKAS).

Freelance professionals are also in for an extra burden in 2018, due to the increase in their social security contributions that will be calculated on the sum of their taxable incomes and the contributions they paid in 2017.

Next year will also see a tax hike for owners of medium-sized and large properties, as along with the adjustment of the “objective values” (property rates used for tax purposes) in spring, the government is bringing back the Large Property Tax (FMAP), shifting the burden from owners of assets worth up to 50,000 euros (in objective value terms) to those above that threshold.

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