ECONOMY

Vroutsis insists social security funding remains within targets

Labor Minister Yiannis Vroutsis assured reporters on Monday that the necessary balance between funding and expenditure in the social security system for 2013 was secure, just a few hours after the government held meetings with the representatives of its international creditors.

The minister stated that Athens is “totally” within its targets and forecasts as far as the absorption of the calculated contribution of the state budget to total pension spending is concerned.

He went on to assert that “of the total annual state expenditure of 10.5 billion euros for the needs of the social security system, 83.3 percent was meant to be disbursed within the first 10 months and so far 82.9 percent has been handed out, securing the smooth and unhindered payment of pensions.”

On the other hand, Vroutsis declined to comment on the social security funds’ finances for 2014, when the government’s ability to adhere to its commitment to a new cycle of contributions (to be reduced by 3.9 percent up to 2016) will be determined.

Last week Deputy Labor Minister Vassilis Kegeroglou tabled an amendment which provides for the transfer of funds of at least 30-35 million euros from the Generational Solidarity Insurance Fund (AKAGE) to the Assistance at Home program in order to cover the gap in funding from local authorities, which are supposed to support the project. This transfer of money from a pension fund to a social program that may be necessary but belongs to a different sector raises concerns as to whether the ministry distinguishes between pensions and social benefits.

According to new data released on Monday concerning October pension requirements – via the Helios system – there are no significant changes compared to previous months. The number of pensioners comes to 2,704,295 people and the total number of pensions paid is 4,450,260, out of which 9,749 are paid to foreign nationals. The total pensions expenditure for October amounts to just over 2.3 billion euros, while the average monthly income from pensions is 926.89 euros.

Although there appears to be no change in the number of multiple pensions, Vroutsis insisted that this chapter is now closed.