Greek families get little help in form of decent salaries and tax breaks
Greece has one of the lowest support levels for households with two children in the OECD
Workers in Austria are guaranteed a 30% increase in their net salary as soon as they have a second child, as deductions for taxes and social security are reduced. The Germans have the same treatment. The Belgians are even more fortunate, with an increase of 32%, the French are limited to 24% and the Czechs to 21%.
So what applies to Greek workers? As well as receiving the lowest salaries in Europe anyway, they also have the worst treatment among parents with two children, because their pay improvement thanks to reduced deductions is just 7%.
Greece, based on the official data by the Organization for Economic Cooperation and Development, ranks near the bottom of the list of the member countries in terms of the tax treatment of parents. The withholding rate for taxes and social security contributions is reduced from 37% for a single person to just 33.7% for a married person with two children – i.e. by just 3.3 percentage points. The average for the OECD countries is nine percentage points and the average for EU countries is 11.4 points.
Either through the tax expenditure mechanism or through the allowance policy fund, the country has several billion euros available to support the most vulnerable. Income tax credit and child benefits are the two main tools to support parents’ incomes.
However, as it turns out, these resources do not ensure strong support, either due to the establishment of strict income criteria – with a family income of more than 27,000 euros gross in Greece, taxpayers completely miss the child benefit – or due to insufficient targeting of the measures.
The income tax reduction, even after the increase which the government has proceeded with since the beginning of the year, amounts to €777 for a single person and €900 for those who have their first child, which means that the tax aid for having the first child is only €123 annually or €10 per month.
The average annual gross salary in Greece (by the data included in the latest OECD report) amounts to €19,910 – i.e. approximately €1,400 gross.
