Υπ. Of Labor: Increase of the disposable income of the pensioners and modernization of EFKA

In the last 2.5 years with specific interventions in the pension system, a large portion of retirees have seen increases in their income.
At the same time, a huge effort is underway and the problem of outstanding pensions is being actively addressed.

Finally, a comprehensive overhaul of EFKA has been launched with the aim of becoming more efficient and more citizen-friendly.

In more detail:

A) Increase in the disposable income of retirees
Increases in main pensions
Permanent increases in retirees with 30 years of insurance and over with law 4670/2020 (Vroutsis Law). More than 225,000 retirees saw permanent increases due to the adjustment of replacement rates.
The increases range from 0.56% to 7.21% (depending on the insurance periods) in the compensatory part of the pension.

Increases in supplementary pensions

The cut of those who had a monthly main and auxiliary sum of more than 1,300 euros was legally canceled. Total income increase for 235,000 retirees amounting to 200 million euros per year.
The average monthly pension of young retirees of supplementary old age increased from 196 euros (end of 2018) to 222 euros at the end of 2021.

Additional increases in individual groups of retirees

Increases in working retirees, as the “parallel work penalty” was reduced from 60% to 30%.
Increase in pensions paid to orphaned children, as they are now entitled to a pension of both parents at a rate of 50%.
Significant reduction of the so-called “personal difference” for 550,000 retirees with over 30 years of insurance. These are old retirees (who had retired before the Katruggalo Law) and who did not see increases in their pensions from the recalculation of the Vroutsis Law, but saw, thanks to this Law, a reduction (“gnawing”) of their personal difference with increases given for ’20, ’21 and ’22. So from 2023 when pensions will thaw – the increases will be given based on a mathematical formula provided in the Legislation – these retirees will be in a better position to increase their pensions.

Increase income through more favorable taxation

The tax rate was reduced to 9% from 22% for annual income from pensions and salaries up to 10,000 euros and by 1% for incomes over 20,000 euros.

The benefit is:

– 177 euros per year for a pensioner with a monthly pension of 833 euros or more (excluding health contributions).
– up to 177 euros per year for a pensioner with a monthly pension from 720 to 833 euros (excluding health contributions).
B) Dealing with the problem of outstanding pensions
In July 2019, the Government received from the previous year more than 1,050,000 pension and insurance claims.
With targeted interventions (national pension advance, digital monitoring of outstanding pensions, fast pension structure, supply of 3,000 new computers, certified accountants and lawyers, etc.) and a lot of work, we achieved concrete and measurable results:
2021 was a record year for EFKA in issuing new pensions, reaching 225,000, while in 2020 161,000 were issued and in 2019 only 123,000. Especially in relation to 2019 there was an increase in the issuance of new pensions by 83%!

Overdue main pensions have been reduced by 50,000 in the last 12 months. They have been reduced to 83,000 from 133,000 a year ago. The goal is to clear all of the overdue main pensions by the end of June.

C) Improving the service of the citizens

EFKA alone has 48% of citizens’ complaints to the Ombudsman for the entire public sector.
Therefore, the improvement of the service of the citizens by EFKA is an urgent and immediate priority. That is why specific actions were developed, although a huge effort is still needed. Specifically, among others:

The new single service number 1555 was created. It operates 24 hours a day, 7 days a week, free of charge for anyone who calls. In the first 7 months of its operation, it has processed more than 1,150,000 citizens’ calls, with 8 out of 10 saying that they are satisfied with the way it operates.

More than 30 new electronic services have been developed and more than 1.2 million electronic transactions are implemented every month, eliminating corresponding visits to the branches. In combination with the electronic appointments, the inconvenience from the queues at the EFKA branches was eliminated.

The institution of certified lawyers and accountants was promoted (458 have already been certified) who have already started issuing pensions in a very short time.

D) The reform of EFKA

With law 4892/2022 we promoted a comprehensive reform to address the serious problems of operation, administration and organization of EFKA.

With this reform, among others:

We make the Management of the Organization more efficient. With a new Organization Chart and the possibility of placing executives from the wider public and private sector in positions of Directors and General Managers.
We reward good employees by introducing a productivity bonus.

We enhance transparency and control in the operation of EFKA. Citizens’ complaints will now be dealt with more quickly and disciplinary responsibilities will be reimbursed quickly.