All new settings in Funds

By Dimitris Katsaganis

“Respite” for all debtors of the Funds is brought by the double regulation announced last week by the Prime Minister from the floor of the Parliament.

As Mr. K. Mitsotakis stated, “in the coming weeks those who owe EFKA will join the more favorable regime of more installments of the Ministry of Finance and the statute of limitations is being streamlined. This will be done in ten years, then in five years, in compliance with the decisions of the supreme court that ruled unconstitutional and these provisions of the Katrougalou law.”

More specifically, according to information from “K”, the establishment of a new “fixed regulation” of 24 installments and the possibility of statute of limitations for e-EFKA claims after ten years (instead of 20 years) is imminent.

Specifically, the government will replace the existing “fixed” i.e. permanently “open” for all debtors (regardless of debt amount) regulation of 12 installments with a completely new one which will differ from the existing one only in the number of installments, as they will increase in 24 installments.

At the same time, pursuant to a previous decision of the Council of Ministers, the government will halve the statute of limitations for insurance debts, that is, from 20 to 10 years, facilitating the retirement of freelancers who establish a pension right.

These initiatives had been outlined by the Minister of Labour, Mr. Kostis Hatzidakis himself, stating (before the Prime Minister) that the harmonization of the Funds with the current (in relation to the permanent regulation) with the tax office is being considered.

24 doses

It is reminded that from December 2019, the new fixed regulation for debts to the tax office from 24 to 48 installments applies.

Contrary to the “tradition” that wanted the alignment of the tax office and the Funds in everything related to the arrangements, the government at the time did not pass the 24 installments to the Funds as well, as, according to what was reported to “K” by officials of the .Work, the percentages of regulated debtors in the Funds were much higher than those of the tax office.

However, now the time has come for something like this to happen, not only for reasons (albeit delayed) of observing the “tradition” of aligning the Funds with the tax office, as both debts concern the State, but especially because of the outflow observed in the first quarter from the regulations (about 1 in 6 “broke” their regulations) but also the very small participation of the affected businesses in the emergency regulation of 72 payments for corona-debtors (February 2020-June 2021). The advent of the energy crisis since the beginning of this year has significantly reduced the economic endurance of entrepreneurs, forcing the government to double the doses of the permanently open regulation.

Fund circles reported to “K” that not only any debtor will be able at any time to include any of their insurance debt in the 24 installments, while anyone who has already joined the 12 installments will be able to jump to the 24 installments, adjusting the amount downwards of his installments.

For example, a professional with a debt of 10,000 euros. Joined the 12 installments in April 2022, paying 833 euros/month. Until this month, he has paid 4 installments or the amount of 3,332. Therefore, he has a balance of 6,668 euros. This debtor could pay the balance of 6,668 euros in 24 installments, paying 277 euros each month instead of 833 euros. Therefore, his monthly installment will be reduced by 556 euros or 66%.

Executives of the Funds reported to “K” that 48 installments will not be provided for insurance debts as for extraordinary tax debts, as there are no such (extraordinary debts) in the Funds.

Limitation

In relation to the possibility of limitation, a limit will be set at 10 years, after which the EFKA claims against businesses, self-employed and freelancers with insurance debts will become time-barred.

This provision is based on a recent decision of the Plenary of the Council of State (StE), according to which the rule of the 20-year statute of limitations for e-EFKA claims against insured persons and employers for non-payment of insurance contributions, which was established by the Katrougalou law, is unconstitutional as it is against the principle of legal certainty and the principle of proportionality.

In fact, sources of “K” from the Ministry. Labor report that the reduction of the relative time to 5 years or even lower is being considered.

Practically speaking, in relation to the impending 10-year statute of limitations, it means that if 10 years pass between the “birth” of a debt and its confirmation by the e-EFKA, then the additional statute of limitations expires.

The Ministry of Labor makes it clear that insurance time will not be lost, as long as the debts are paid.

It is noted that for freelancers, the time for which debts have not been paid is not counted in the insurance years, in order for someone to complete the required conditions and receive a pension. With the upcoming “status”, the statute of limitations does not mean the deletion of the claim, and thus does not lead to the deletion of the insurance period. As far as the insured is concerned, he will be able to pay the contributions he owes for this period – even if based on the 10-year statute of limitations – and that specific time be taken into account for his pension.

It will also be provided for the insured, who observe active arrangements, the amount which will be time-barred will be deducted from the arrangement.