BUSINESS

Creditors approve Greek pension hike

ROULA SALOUROU

TAGS: Finance

The new social security bill, which was made public on Thursday, will lead to raises in pensions to varying degrees, either on paper or in the pockets of older and more recent retirees, as according to senior Labor Ministry officials it has cleared the review by the representatives of the country’s creditors.

The fiscal cost of the hikes promoted for main and auxiliary pensions did not appear to worry the creditors, as they have the ministry’s pledge that any cost will be covered for 2020 through the already included credit of the social budget.

It will also continue to be funded until 2070 by the 0.5 percent share of gross domestic product stemming from the abolition of the handout the previous government had introduced and branded the “13th pension.”

Main pension increases will only concern those who have already retired (or will do so) after completing between 30 and 44 years of insured labor, as the bill provides for new replacement rates.

In contrast, those who retired after less than 30 years’ work, as well as those who worked more than 44 years, will not be entitled to a hike.

The raises will range between 12 and 250 euros per month and apply retroactively from October 1, 2019, but will reach most pensioners at staggered dates, while the dues since October’s Council of State decision will be paid in installments.

There will also be raises from October 2019 to some 300,000 recipients of auxiliary pensions, ranging from 5 euros to 196 euros per month.

The bill clearly states that the auxiliary pensions paid up to September 2019, concerning applications submitted up to December 31, 2014, continue to be paid out after October 1, 2019 at the amount calculated according to the regulations applying until December 31, 2014.

This practically cancels the changes introduced by the Katrougalos law in the summer of 2016, which the Council of State has deemed unconstitutional.

The recalculation of the auxiliary pensions that the Katrougalos law had provided for is also abolished.

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