New scheme for social security debts

New scheme for social security debts

The platform for applying for a debt settlement program for contributions to social security funds will open before Easter, i.e. during this month, and will remain open up to September 30.

The draft law is already on its way to Parliament and will not include any income or property criteria for the eligibility of debtors. It will, however, include some very favorable terms which in certain cases will lead even to a write-off of around 60 to 65 percent of the total debt (original debts plus fines and penalties), mainly for freelance professionals.

The bill concerns all debts to social security funds accrued up to December 2018, which come to a total of 35 billion euros. It will also abolish all active settlement plans, with the outstanding debts entering the new, more favorable arrangement.

Even when there is a pending application for the inclusion in the extrajudicial mechanism of debts to funds, a debtor may quit the process and join the new mechanism. It is only in cases where a debt has been irrevocably included in the out-of-court settlement or the law on the overindebted households that the debtor will not be able to benefit from the new arrangement system.

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