The main features of the budget for 2022 of the Ministry of Labor

The transition from pandemic support measures to policies to create new jobs and strengthen social policy is marked by the budget of the Ministry of Labor and Social Affairs for 2022, according to an information note of the ministry.

As mentioned, in order to support the jobs and incomes of the employees, the expenses of the Ministry of Labor increased by about 25% in the two years 2020-2021. The total cost of Covid measures for this period exceeds 9 billion euros. For 2022, the need for emergency measures is expected to be less, as the economy has returned to normal.

In this context, the projected expenditures of the budget of the Ministry of Labor for 2022 amount to 21.612 billion euros, while, if we subtract the cost of covid measures, amount to 20.763 billion euros. This amount is increased by 526 million euros (2.63%) compared to 2021.

As noted in the briefing note, “regardless of the special circumstances created by the pandemic, the budget of the Ministry of Labor is steadily increasing during the period of governance of the country by the SW”.

In particular, the information note states the following:

“The regular budget of 2022, (excluding Covid expenditure), is increased by 1.510 billion euros (+ 8.1%) compared to the budget voted by the SYRIZA government for 2019.

The public investment program is also increased by 380 million euros (+ 112%) compared to 2019. This increase is due to about 2/3 of the inflow of funds from the Recovery Fund (+250 million) and during 1/3 (+130 million) in the commitment of more funds from the NSRF for employment support programs.

As a result, the total budget (regular and PDE) shows an increase of 1.890 billion euros (+ 10%).

Development of the budget of the Ministry of Labor (in millions of euros, without Covid measures)

2019: Total: 18.873 / Regular: 18.533 / PDE: 340,000

2020: Total: 19.891 / Regular: 19.471 / PDE: 420

2021: Total: 20.237 / Regular: 19.817 / PDE: 420

2022: Total: 20.763 / Regular: 20.043 / PDE: 720

Positive effect on insurance funds from the reduction of unemployment

Unemployment has fallen by 4.2 percentage points (from 17.2% in July 2019 to 13% in September 2021), since ND took over the country. Thus, it is at its lowest point since August 2010. At the same time, the number of employees has increased in recent months, exceeding for the first time since August 2011 the psychological limit of 4 million. According to Eurostat data, during July 2019-September 2021, Greece had the largest decrease in the unemployment rate among EU countries. During the same period, unemployment increased in most Member States.

These developments have a positive effect on the insurance system, because the income of the insurance funds from the insurance contributions will increase. And this will happen, despite the further reduction of the amount of contributions for employers and employees (due to the reduction of the contributions of the supplementary insurance by half a percentage point within 2022). It is expected that the increase in EFKA revenues will exceed both the expected increase in pension expenditure (due to the gradual liquidation of pending retirement files) and the increase in the number of retirement applications.

The reform of the supplementary insurance and its gradual conversion into a capitalization (from distributive) character was passed by law 4826/2021 and is a significant change in the insurance system that will operate at the beginning of 2022. Primarily seeking to reduce the insurance exposure to demographic risk and securing higher pensions, the supplementary insurance reform simultaneously turns a part of the insurance system into a development tool, it is also noted in the information note of the ministry. The reform aims to restore the confidence of the insured in the social security system, as the logic of the system is different, since each insured will receive a pension from his own contributions and not from those of younger employees.

In addition, with the creation of TEKA and the change of example in terms of governance and professional management comes to the fore in a more urgent way the need to reform the regulatory framework governing the establishment, organization and supervision of Occupational Insurance Funds. The reform effort will henceforth focus on identifying the weaknesses, but also the development prospects of the 2nd pillar of occupational insurance. In this context, a legislative initiative is expected to build on the European institutional tools and good practices applied in other countries, with the aim – among other things – of effectively supervising the first and second pillar insurers that implement the capitalization system of economic operation.

At 10.5 billion the support package of the Ministry of Labor for the pandemic

In 2022, pandemic labor market support measures are expected to exceed € 1.1 billion. Therefore, the total package is expected to exceed 10.5 billion, as in 2020 4.1 billion were allocated and in 2021 5.3 billion were allocated.

This is the largest and most massive program to support workers and the unemployed that has been adopted in recent years, as noted. As a result, not only did unemployment not rise, as almost everyone expected, but, on the contrary, our country achieved the highest rate of unemployment reduction in the EU in 2021.

Special mention is made of the suspension of contracts, one of the most important support measures against the pandemic, which has contributed to the rescue of hundreds of thousands of jobs, while supporting the income of workers.

The total cost of this measure amounts to 5.4 billion euros (of which 3.8 billion relate to special purpose compensation and 1.6 billion to cover insurance contributions). In the period November 2020-April 2021, an average of 550 thousand beneficiaries were included on a monthly basis, with the cost exceeding 300 million euros. With the gradual opening of the economy, the use of the measure decreased significantly. In particular, only 4,366 people made use of it in August 2021, at a cost of 2.2 million euros, while in September the number of beneficiaries amounted to 3,372, with a total cost of 1.6 million euros. As of October 2021, the suspension measure continues to apply to protect jobs in areas affected by last August’s natural disasters.

Measures to create new jobs

As the country emerges from the pandemic and normalcy returns, it is necessary to shift from measures aimed at maintaining jobs to measures aimed at creating new jobs.

In this context it was decided:

– The extension of the subsidy program for new jobs for 2022 from 100,000 to 150,000 jobs, with the estimated cost amounting to 186 million. It is recalled that this measure subsidizes the total insurance contributions (employee and employer) for 6 months, providing incentives for businesses and employers to create new jobs, as non-wage costs are significantly reduced.

– The “first stamp” was introduced, which supports the recruitment of young people up to 29 years old, without previous service, in the amount of 1,200 euros for 6 months (600 euros to the employer and 600 euros to the employee).

The reduction of insurance contributions

The government has reduced insurance contributions by 3.9% (-2.3% to the employer and -1.6% to the employee), while, within 2022, it is planned to reduce the supplementary insurance contributions by 0.5 %, equal for employers and employees.

The loss of revenue caused in the budget of e-EFKA and OAED by these reductions is covered by the state budget.

The cost of the measure for 2021 is set at 816 million euros, while for 2022 it is projected to rise to 849 million euros.

Key points of the social budget

The cash balance of Social Security Organizations, except EOPYY, is expected to reach 783 million euros in 2022, ie increased by 656 million compared to 2021. The improvement is mainly due to revenues which will be increased by 1, EUR 15 billion, thus offsetting the increase in expenditure by EUR 494 million.

The increase in revenues is mainly due to the strengthening of employment, debt settlement and the increase of state funding to the insurance funds.

On the expenditure side it is expected:

– an increase in expenditure on pensions by 316 million, mainly due to the award of pensions pending from previous years,

– increase OPEC funding for family allowances (+15 million), disability allowances (+5 million), school meals (+18 million) and other programs (+20 million),

– a new line, amounting to 100 million euros, for the payment of housing allowance by OPEC established by the debt settlement code and the provision of a second chance to borrowers.

In addition to the increase in the above welfare benefits, the Ministry of Labor and Social Affairs continues to finance the parallel program of access to nurseries and daycare centers, which expands the circle of beneficiary families (this year they are included in many nurseries. children in relation to 2019).

In addition, the ministry strengthens the interventions for the modernization of welfare services and the support of the social integration of our most vulnerable fellow citizens, utilizing for this purpose the European funds.

In particular, through the NSRF, it is planned to spend for social inclusion projects, during the next programming period, funds amounting to the amount of 2 billion.

The Recovery Fund also promotes modern social protection tools, with a total budget of 480 million euros. These include the disability card, the personal assistant for the disabled, the creation of 50,000 places in nurseries, the promotion of the deinstitutionalization of vulnerable adolescents through the creation of semi-autonomous living apartments and the creation of a comprehensive early intervention framework for children with disabilities and development.

It is pointed out that Greece is one of the first countries to incorporate in its law the EU Council Recommendation, which establishes the European Guarantee for Children.

The aim of the Recommendation is to prevent and combat the poverty and social exclusion of children and to protect their rights.

Strengthen gender equality policies

The sector of gender equality for the year 2022 will be strengthened with the increase of the funds from the current NSRF, but also the inflow of funds of the Recovery Fund, in an effort to strengthen the policies for the support of working mothers and to facilitate it. harmonize family and professional life, implement the requirements of the Istanbul Convention on the Prevention and Suppression of Violence against Women, and highlight the importance of gender mainstreaming in all sectoral policies.

The total budget increase for the gender equality sector amounts to 14,151,000 euros.

Specifically, it concerns the implementation of emblematic projects, such as the co-financed “Neighborhood Nanny” program, the creation of storage facilities in 120 large companies and the reform program to enhance diversity in the workplace, the integration of the gender dimension in public policies and preparation of budgets with the activation of the Technical Support Instrument, as well as other smaller budgets, but of equally important projects “.

Source: AMPE