What changes with the new Insurance Bill

Dimitris Katsaganis

Changes for the debtors of the funds, civil servants, enlisted men, beneficiaries of supplementary pensions and debtors of OPECA are foreseen by a new bill, the main provisions of which present yesterday the political leadership of the Ministry of Labor under Mr. Kostis Hatzidakis.

It was preceded by the presentation of the bill to the Council of Ministers, which met in the morning under the leadership of the Prime Minister, Kyriakos Mitsotakis.

In particular, this bill provides for the reduction of the statute of limitations for unconfirmed debts to the EFKA to 10 years (from 20), the doubling of the installments for permanent settlement of insurance debts to 24 installments (from 12), the abolition of the special contribution of 1% of the insured of the Civil Servants Provident Fund (CPF), the extension of the “combat five years” to all uniformed officers, but also the maximum ceiling on supplementary pensions (at €1,382.40/month)

The main directions of the proposed legislative arrangements included in the bill under discussion focus on four main axes: the unification of insurance rules and the restoration of inequalities, the promotion of protective provisions for vulnerable groups of insured persons and the harmonization of tax and social security administration rules.

The final draft of the bill will soon be available for consultation before it is tabled in Parliament.

The most important provisions of the bill are the following:

1. The time available to the e-EFKA in order to confirm and collect claims from unpaid insurance contributions is reduced to 10 years (from 20 today)

If the claim of EFKA is not confirmed within this period, the debts are time-barred. This regulation achieves compliance with the decision of the Council of Ministers which ruled that the 20-year statute of limitations for EFKA claims (“Katrougalos law”) was too long and set 10 years as a reasonable statute of limitations. It is noted that from January 1, 2027, the statute of limitations for unconfirmed debts to EFKA becomes five years, with the harmonization of the statute of limitations for insurance debts with what applies to tax debts.

2. The monthly installments of regulated insurance debts are increased from 12 to 24, with a minimum monthly amount of 50 euros

The application for regulation is made electronically at the KEAO. With the proposed provision, the installments for permanent settlement of debts to EFKA and the Tax Office are equalized and debtors of overdue insurance debts are facilitated in complying with the settlement.

3. The special contribution of 1% of the insured of the former Public Employees’ Welfare Fund (TPDY), which was established to support the sustainability of the said Fund, is abolished

The TSMY is now sustainable and there is no reason to continue the special levy which ceases to be withheld from civil servants, for whom the detention was not remunerative.

4. The right of “combat five years” is extended to all enlisted men, i.e. the recognition of up to five additional years of insurance, by paying the corresponding contributions

Now those in uniform who were exempted (e.g. certain categories of firemen, porters, policemen and airmen) from the relevant regulation now acquire this right, regardless of service unit, whether they are old or new insured (before or after 2011) and regardless of the employment relationship with which they serve (permanent and non-permanent).

5. The conditional criminal prosecution of the debtors of settled insurance debts ceases for as long as the settlement is served

In this way, repeated confirmation of compliance with the regulation in court is avoided. It is a regulation that respects the dignity of citizens and at the same time achieves the relief of the tables and the corresponding burden of the courts.

6. A ceiling is established on provocatively high supplementary pensions, equal to 6/20 of the main pension ceiling (€1,382.40/month)

In particular, based on the 2015-2016 legislation, the supplementary pensions are calculated, in part, based on the contributions paid during the period 2002-2014. But in some cases these contributions also included social resources, resulting in theoretically very high supplementary pensions (even 15,000 euros per month or even more). The ceiling limits the maximum amount of supplementary pensions to that which corresponds to the legal expectations created by the insured at the time they paid the contributions, which also incorporated social resources. The imposition of a cap (applied to main pensions, but not to supplementary pensions) on these provocatively high supplementary pensions becomes imperative to redress the balance between old and new insured. At the same time, the sense of justice among all pensioners is satisfied in relation to the legitimate amount of supplementary pensions and what actually are contributions.

7. The process of unifying the rules for disability pensions begins

Specifically, there is a reduction in the disability rate (from 67% to 50%) for certain groups of insured persons, as a condition for receiving disability benefits, in order to harmonize with what applies to the insured persons of the other former Funds. The new regulation primarily covers the “old insured” (before 1993), especially of the former OAEE, OGA, NAT. Also, a uniform date for the payment of disability pension is established, from the first day of submission of the disability pension application.

It is noted that the overall framework for the protection of persons with disabilities is under review, with the aim of correcting distortions, simplifying and codifying the legislation and redressing injustices resulting from the differentiation of the rules of the former Funds that joined the EFKA. For this matter, a Working Group has been set up with the participation of the National Confederation of Persons with Disabilities (ESAMEA).

8. The search for outstanding debts to OPECA from citizens who received benefits in good faith, without being entitled to them, ceases

Taking into account that OPECA, in the context of audits, identified – belatedly – many cases of citizens receiving benefits – mainly disabled, usually through Municipalities – without being entitled to them, in the vast majority of them in good faith and stopped their payment, retroactively looking for the unduly paid amounts, it is reinforced the protection of particularly vulnerable groups by stopping the pursuit of outstanding debts from amounts received in good faith.

For the rest of the cases of unduly paid benefits, favorable measures are adopted, with a distinction between negligence and fraud, such as the three-year statute of limitations for debts, the possibility of paying them in installments or offsets with future payments, as well as not seeking very low debts (under 50 euros) .

This takes into account the state’s delay in checks and respects the good faith of the disabled for benefits.