ECONOMY

Social security debtors need only apply to EFKA for settlement

social-security-debtors-need-only-apply-to-efka-for-settlement

The Labor Ministry has included a clause in the government’s investment incentives bill, which is currently up for public consultation, aiming to convince thousands of Greeks with debts to social security funds to join a settlement program by September 30. The target is for at least 10 percent of the total 35 billion euros of contributions owed to enter a settlement mechanism.

Debtors include thousands of self-employed and freelance professionals with debts to the Single Social Security Entity (EFKA) who may have started the settlement process but not completed it. Many of the latter ran into technical problems, the most common of which was delays in calculating the precise sum of their dues to the former funds that have now been incorporated into EFKA.

Despite the small increase in applications submitted in recent days, debtors’ interest in coming to an arrangement remains low. This settlement is considered the most favorable, as under certain conditions it could even lead to the reduction of the original debt, but up until last week just 110,000 debtors with total arrears of 1.7 billion euros had completed the process. The coffers of the collection center have received 130 million euros.

This pales in comparison with the sum of all debtors and their total dues, as 1.4 million people owe 35 billion euros to the social security system. With the September 30 deadline fast approaching, experts deem it particularly important that 3 to 3.5 billion euros of debts enter the settlement procedures. To this effect, the government is introducing a clause allowing for an application submitted to EFKA for the process to be valid. The definitive calculation of an applicant’s debts could then be completed later on, by the end of the year, as long as the application is tabled by end-September.