How will the statute of limitations be applied to debts in e-EFKA

By Dimitris Katsaganis

“Respite” for old e-EFKA debtors is expected to be given by the impending statute of limitations for insurance debts in 10 years and not in 20 years as has been the case until now.

This regulation is expected to be brought to Parliament by the Ministry of Labor, in the framework of a bill with a series of other provisions (e.g. a fixed regulation of 24 installments) in the immediate future.

The Prime Minister himself, Mr. Kyriakos Mitsotakis, last month stated that “the statute of limitations procedure is being rationalized” and that “this will be done in ten years, then in five years, in compliance with the decisions of the Supreme Court which ruled unconstitutional and these regulations of Law of Katrougalos”.

More specifically, according to information, a limit will be set at 10 years, after which EFKA’s claims to businesses, self-employed and freelancers with insurance debts will be 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, Capital’s sources from the Ministry of Labor report that the reduction of the relative time to 5 years or even lower is being considered.

In practice, 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 the specific time 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.

Who does it concern?

Competent officers of the Funds estimate that the whole process concerns debts of up to 250 million euros, a significant part of which will be time-barred.

They also point out that these are not recently created debts, as now the attribution of debts to most of the former Funds that joined EFKA is done within a few months of their creation and in no case do they exceed 10 years. And they make it clear that even for the unemployed, no insurance time will be lost, as long as the debts are paid.

This regulation will in practice unfreeze the road to retirement for thousands of freelancers and employed people, who due to high debts to the Funds cannot retire. This practically means that freelancers and self-employed people have the opportunity to retire thanks to the relief of their debts to the EFKA, subject to conditions.

Apart from the issue of completing the necessary insurance period and age criteria, the most important condition will be as follows: The total debt of the decade does not include confirmed debts and is made up of a mixture of additional fees, surcharges, debts from the recognition of fictitious years, etc. ., not to exceed 20,000 euros for entrepreneurs and 6,000 for farmers. The decade period from 2027 onwards will be reduced to 5 years.

Fine points

It is noted that eight months have passed since the decision of the Plenary of the Council of State which deemed unconstitutional the legislative regulation of a twenty-year statute of limitations for claims for the payment of insurance contributions.

As analysts estimate, for employee contributions the issue basically concerns employers and not so much the insured. Above all, in fact, in those cases in which their insurance has not been declared to the insurance company by their employer.

As far as the self-employed (unemployed) are concerned, the issue is of particular interest, since, in several cases, the use of the 10-year statute of limitations will limit their debt, but it will also reduce their insurance period which, in several cases, is necessary for their retirement.

The same analysts claim that those aiming to retire at 40 years of insurance will find it difficult to use the ten-year statute of limitations. And this is because it will be very difficult for them to accumulate the required insurance time.

Those, on the other hand, who have reached the age of 67, where the minimum insurance period necessary to retire is 15 years, will be able to make use of such an option.

Debts exceeding 20,000 euros

Documents are sent to those unemployed people who have pending pension requests and have debts that exceed €20,000, giving them an exclusive deadline of two months to pay the amount that exceeds €20,000 in order to proceed with their retirement process.

In several cases, the requested amounts of contributions in excess of 20,000 euros have fallen within the statute of limitations (according to the decision of the Council of State), but the pensioner cannot claim it precisely because the services, without a new regulation and circular, neither recognize it nor apply it. In all these cases, after the legislation, which must be completed immediately, a new two-month deadline should be set, so that no one is wronged by the delay in the legislation.

Finally, with regard to employers’ contributions, the services should be better organized in order to complete their audits within a decade, so that there are no losses of income from contributions, which are necessary for the balanced operation of the insurance system.