It is expected that the focus of the pre-election period, as well as the post-election period special solidarity pension contribution (EAS) that was superimposed on pensions more than 1400 euros since 2010 and since then has been retained, contributing more than 600 million euros per year to the “treasury” of intergenerational solidarity. The ruling party includes in its program for the next four years the introduction of a “more fair” collection scale, and the official opposition advocates its complete abolition. In any case, some 800,000 pensioners will receive a significant increase in their pensions, along with any potential increase in 2023.

As he explains, speaking with “K” well-known lawyer specializing in insurance matters Dimitris Burlos, the pensioners’ solidarity levy, established since 2010, is the only clause in the memorandum that was maintained even after the enactment of the Katrugalu law. For basic pensions exceeding 1400 euros per month, it ranges from 3% to 14%, and for supplementary pensions exceeding 300 euros – from 3% to 10%, depending on the size of the pension. Thus, the solidarity fee is levied both on pensions assigned before the Katrugalos law, which were recalculated, and on pensions assigned with the introduction of a new calculation.

The constitutionality of the introduction of the fee was assessed both by the State Council, which considered it constitutionally permissible, and by the Accounts Chamber, which considered its introduction unconstitutional for 2017 and 2018 and constitutionally permissible in the future, from 2019 and beyond.

Against the introduction of the fee, Mr. Bourlos notes, many legal appeals have been filed and are pending, not only in relation to the constitutionality of its introduction, but also in relation to how it is calculated in pensions.

According to a well-known jurist, the method and excessive amount of withholding imposed, especially in relation to larger pensions, “changes” the reciprocity of the contributions – the pensions paid, which, of course, was the main goal of the Katrugalos law.

Characteristically, in many cases, the increase in pensions by 7.75%, assigned from 01/01/2023, although it did not have a positive personal difference, did not lead to a corresponding benefit. A key (and not only) reason for this is the collection of solidarity, Mr. Bourlos explains, as the increase was offset by an increase in the withholding tax rate. Indeed, it was found that many pensioners who exceeded 1,400 euros on a 7.75% increase ended up pocketing less, as part of the pension is subject to EAS withholding. For example, a pensioner who previously received 1390 euros, and with 7.75% receives 1497 euros, can earn 107 euros gross from the increase, however, due to the deduction of 3%, the increase is limited to 62 euros.

Of course, Mr. Bourlos points out, the introduction of EAS is aimed at creating and maintaining a fund that will help protect pension payments in difficult times.

And indeed, as stated in “K” former head of the financial department of the General Secretariat of Social Insurance, Alexandros Papatéodorou, AKAGE, the “piggy bank” of intergenerational solidarity, has now accumulated funds in the amount of 14 billion euros. More than 600 million euros annually come from solidarity contributions alone for basic pensions, of which 300 million euros are directly from the “pockets” of pensioners, and at least 300 million more are contributions EFKA. It should be noted that about 120 million euros are added annually from the corresponding ancillary contribution. In fact, according to Mr. Papatheodorou, by increasing pensions this year, as well as including about 150,000 people with parallel insurance among high solidarity contribution pensioners, AKAGE income from EAS in 2023 could reach 900 million euros.