Funds: How will the cancellation of debts from 10 years ago be done

By Dimitris Katsaganis

The statute of limitations of insurance debts announced by the government after the end of 10 years will lead to a complete change in the debt landscape of the self-employed.

The reason for the imminent voluntary write-off of overdue debts to the former Self-Employed, Self-Employed and Farmers’ Funds prior to 2011, provided that these have not been communicated to the debtors.

This measure (which has been announced by the Prime Minister himself, Mr. Kyriakos Mitsotakis) will be included in a mini insurance bill which the Ministry of Labor is preparing to table and vote on within the coming autumn and, according to “K” information from a competent executives of e-EFKA, will provide in detail the following:

– Possibility of final “haircut” of self-employed debts to the former OAEE, the former ETAA and the former OGA before 2011.

This possibility, that is, does not concern debts of employers to the former IKA, but only debts of self-employed persons to their former Funds.

– A basic condition for this “haircut” is that these debts have not been officially communicated (ie with a protocol number) in any way to the debtors.

This means that those debtors who have requested and received information about their debts (before 2011), e.g. in order to fit them into an arrangement (120 installments, 12 installments, etc.) or to obtain insurance awareness, they will not be able to make use of this feature. As long as there has been no relevant official notification, they will have the possibility to write off these debts.

– The “haircut” of the above (unnotified) debts before 2011 will be voluntary, partial or universal.

According to the basic scenario, debtors will be informed by e-EFKA about their unreported debts before 2011. Then debtors will be able to ask for their “haircut”, either in part or in full.

In other words, the debtors will be able, if they wish, not to request a “haircut” of some debts, in order not to lose the corresponding insurance time they need to establish their pension rights, or to increase their future pension.

Examples

1. Be a debtor of the former OAEE, who turns 67 in March 2023, has paid 15 years of insurance, but has undisclosed (to him) debts in 2009-2010. Based on the upcoming provision (on the statute of limitations for debts before 10 years), he will be able to ask for the cancellation of the debts of 2009-2010 and retire completely unhindered in January 2023.

2. Former EBRD debtor turns 67 in April 2023, has paid 13 years of insurance but has undeclared debts in 2007, 2008 and 2009. He is two years of paid insurance short of retirement. He will be able to ask to pay two years (eg in 2008-2009) and delete 2007 from his (potential) insurance time. Thus, the said insured will be able to retire in March 2023.

3. Debtor of the former OAEE turns 67 in May 2023, has paid 15 years of insurance and thus can (next May) retire. However, he has undisclosed debts in 2007-2009. This debtor could request their definitive deletion and obviously the loss of the insurance period corresponding to this three years. However, he will be able to retire seamlessly in May 2023, without having to settle (in up to 60 installments) these debts.

Open issues

Further, there are two major open issues. The first is whether this provision will also have retroactive effect, while the second, what will be done with the debts of the period 2012-2017. More detail:

– Legal circles explain to “K” that the possibility of writing off unreported debts before 2011 seems to be unfair to those debtors who have previously requested debt notification, e.g. to set them up.

In particular, these debtors can be considered wronged, as they have paid or continue to owe debts (before 2011), while those who did not request notification (e.g. to settle) will be able to delete them with the upcoming order.

Therefore, according to the same sources, there is a question of retroactive validity of the upcoming provision, at least for those who continue to pay these debts. Doing so could lead to fewer or lower doses for them.

– Information indicates that it is possible that insurance debts may be statute-barred even 5 years ago.

If, for example, a 5-year statute of limitations was established, this would also apply to the debts of the period 2012-2017, which are not “past” in the e-EFKA electronic services (as is also the case for the pre-2011 period). This means that even in this case of the debts, since they have not been notified to their debtors, they are also “cancellable”.

Thus, as noted by legal circles in “K”, in view of establishing the possibility of writing off debts for an even longer period, it is a question of what tactics a debtor should follow in relation to the option of writing off debts.

Source: Capital

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