A retroactive statute of limitations is coming for settled debts as well

By Dimitris Katsaganis

The new insurance bill will also provide for the possibility of retroactive statute of limitations for regulated – and therefore confirmed – insurance debts, according to what a high-ranking source of Capital.gr reported to the Ministry of Labour. It is recalled that the day before yesterday, against the presentation of the bill in question by the political leadership of the competent Ministry it was mentioned that a provision will be included which will provide for the possibility of statute of limitations on debts to the funds after the 10-year period (ie before 2012), provided that they are not certified.

It was also mentioned that there will be “especial care for those debtors who settled debts beyond ten years, so that they are not wronged even though they are consistent”.

According to what the same source reported to Capital.gr, this means that those debtors who settled debts before 2012 and comply with this regulation, will have the possibility to retroactively request the statute of limitations, i.e. the cancellation of all or part of the debt concerning the period before 2012.

This means that their regulated debt will be reduced (or will be eliminated if there are no debts after 2012) by the amount of the “cut” part of it and thus will fall (or will be eliminated if there is no other debt after 2012) and the amount of the monthly installment.

What does the Ministry say? Work

In more detail, according to the latest clarifications given yesterday by the Ministry of Labor in relation to the statute of limitations for debts, with the proposed regulation the time available to EFKA to confirm and collect claims from unpaid insurance contributions is reduced to 10 years, from 20 years that it is today.

If the claim is not asserted (claimed) within this period, it is time-barred.

In this way, compliance with the decision of the Council of State is achieved, which ruled that the single 20-year statute of limitations for EFKA requirements, which had been established with the “Katrougalou law”, is an excessive amount of time and goes against the principle of proportionality, with the supreme court to set the decade as a reasonable time of limitation.

In other words, the legislative framework is first adapted to the decision of the Council of State.

Then, from January 1, 2027, the limitation period becomes five years, so that it is equivalent to that which applies to the tax administration, therefore the EFKA will also have to certify within five years.

The provision concerns all categories of debtors of insurance contributions (employers, self-employed, self-employed, farmers).

It also applies to EFKA, to the extent that it should certify claims closer to the date of origination of the debts, which boosts insurance revenues and discourages bad practices of excessive delays.

It is clarified that the employees are not affected by the limitation of the employer’s debts, as the insurance corresponding to these time-barred debts is still recognized for them.

In addition, the self-employed will be able to pay their debts, despite the statute of limitations, if they so wish, in order to recognize the period that was statute-barred as insurance time.

Finally, special care is taken for those debtors who settled debts beyond ten years, so that they are not wronged even though they were consistent. In these cases and upon request by the interested party, the prescribed amount is deducted from the settlement and the amounts paid cover the remaining debt.

Example 1

A self-employed person who submits a pension application in 2022 owes contributions for the years 2002-2011, which EFKA has not attributed to him until the time of application. These contributions concern a period of more than ten years and are therefore time-barred. Even if, in order to establish a pension right, the self-employed person still needs 5 years of official service. Then he has the possibility to pay for 5 of the 10 prescribed years, in order to recognize them as insurance time.

On the other hand, if EFKA had notified the insured of the proof of payment of said contributions within ten years of its creation (an event that interrupts the limitation period), then the insured owes all of the contributions.

Example 2

In 2019 it was confirmed and then, at the request of the insured, a debt from 2008 was settled, which with the provision in question refers to a period of more than ten years and therefore becomes time-barred. This debtor can, with his application, request the suspension of the arrangement and the deletion of his remaining debt. He can, however, continue to serve the arrangement, so that the insurance period corresponding to the debt is recognized.

When does the statute of limitations begin – When does the statute of limitations expire

The statute of limitations begins on January 1 of the year following the year in which the work/service covered by the compulsory insurance was provided. If 10 years pass, i.e. if December 31st of the tenth year after the year in which the work/service was provided, without the insured (or the employer) having been notified in some way of his debt, it becomes time-barred. Debts incurred from 2026 onwards will be time-barred in 5 years.

What will happen to anyone who does not pay their debts within ten years?

His debts are not extinguished, because the statute of limitations is interrupted every time the insured is notified that he owes insurance contributions. In such a case, the decade starts again from the notification.

Example

If someone owes self-employment insurance contributions in 2018 and has not paid them, the statute of limitations begins on January 1, 2019. If they have not been notified that they owe by December 31, 2029, the claim is time-barred. However, if the debt is confirmed and an individual notice is sent to him on October 5, 2021, the statute of limitations extends until December 31, 2032. If an act of administrative enforcement (e.g. seizure of an asset) is subsequently carried out on March 10, 2030, the statute of limitations is extended until December 31, 2041.

In what ways is the limitation period interrupted?

The statute of limitations is interrupted when EFKA (or KEAO) notifies the insured about the debt in any way: by bailiff/summonsman, letter, electronic notification or takes an administrative enforcement measure for its collection (notification of individual certificate, confiscation, auction, etc. etc.).

The essential effect is the reduction of the limitation period

The statute of limitations is not an institution intended to avoid payment of debts. It is an institution that ensures legal certainty and the security of transactions. On the one hand, the insured must know what his debts are and that these must be settled at some point.

On the other hand, EFKA (and KEAO, which is subordinate to EFKA) must not be inactive in the collection of insurance contributions and must be able to budget and collect its revenues in the context of good management of the organization.

Accelerating the statute of limitations ensures that EFKA moves within acceptable time frames, while the possibility of interrupting the statute of limitations ensures that strategic defaulters do not avoid meeting their obligations.