Housewives’ pension pledge costs
The pledge by PASOK leader George Papandreou that uninsured housewives would get a monthly pension of 550 euros dominated pre-election promises in the last week before the polls. In a television interview, Papandreou announced that the pension, which PASOK will hand out to pensioners of the Farmers’ Pension Fund (OGA) and to the uninsured, will rise to -550 per person or -900 per couple. Currently, a housewife – just like any other uninsured senior citizen – is entitled to the minimum OGA pension, which this year comes to -278 and will reach -330 in 2008. Citizens are entitled to this pension if they are at least 65 years old and their annual income does not exceed the ceiling for the annual pension OGA gives to farmers, i.e. -3,890 in 2007. Their family income should also not exceed twice that amount, that is, -7,780 per year. With this pledge, Papandreou is placing the highest bid, as he is promising an increase in the pension from -330 to -550 as well as an increase in the number of those entitled to receive it. PASOK officials have suggested that the income bar for any uninsured citizen to be entitled to a pension will rise to -7,700 per person and -15,400 per family. They add that with the expansion of the income criteria, the number of recipients of this pension will rise from 60,000 to 210,000 people, the majority of which will be uninsured housewives. The additional fiscal cost for the budget due to the pension adjustment from -330 to -550 and the increase in the number of recipients by 150,000 people is estimated at -1.34 billion. To this amount another -2.46 billion should be added from the increase of the OGA pension to -550 and -900 for an insured farmer and a couple, respectively. Consequently, the total cost of the measure will come to -3.8 billion per year, which is equal to 1.8 percent of the country’s gross domestic product, a rather forbidding amount for any Greek budget to afford at once. As a result, it is more likely that PASOK would implement the measure toward the end of its four-year government term if it is voted in.
