ECONOMY

Drive to save social security funds

Ministers are expected to launch a process this week for establishing strict common rules and simplifying procedures for the compulsory collection of arrears to Greece’s three main social security funds.

The plan, which is causing widespread concern as the number of those falling behind their contributions is increasing rapidly, will initially target arrears to the Social Security Foundation (IKA), the Farmers’ Social Security Fund (OGA) and that of self-employed professionals (OAEE), which will be unified into a single system of collection.

The setting up of the Center for the Collection of Social Security Arrears (KEAO) is planned for completion by July 2016, and is seen being followed by the integration of social security and tax arrears a year later, by which time all social security funds should have been integrated into the system.

The plan, combined with letters of warning already sent by OAEE to thousands of its members, has already drawn reaction from the General Confederation of the Self-Employed of Greece (GSEBEE). After a meeting with the OAEE officials, the GSEBEE administration said the letters amounted to “advance notices of confiscation.” OAEE responded that the letters were no more than reminders for the settling of any arrears under recently announced favorable terms.

Nevertheless, the letters initiate a process for imposing a fine and ascertaining the arrears, which will be sent to KEAO. The agency will maintain electronic records of the arrears and be able to activate the collection or even confiscation procedures in a short period of time.

To date, the collection procedures have been handled by the inland revenue department. Under the new system, the combined arrears of contributions and taxes will be automatically calculated and a month after an official order for collection is issued those in arrears will be sent individual notices to settle within 20 days.

Currently KEAO will only deal with cases from IKA and OAEE that have arisen since July 1 this year, do not fall under favorable settlement terms and show some promise of collection.