Copyleft 2010 Contra Info link
The new ‘Social Security’ Act imposed by the IMF-EU-ECB ‘troika’ and the Greek government: A brief description of the most significant recent changes (August 2010)
- They increased the limit layoffs (from today’s 2%) to 5% per month, and up to 30 employees regarding companies which are staffed with more than 150 workers. Companies with 21 to 150 employees may now lay off up to 6 persons per month, while companies with less than 20 workers have no limit layoffs.
- They reduced the allowances due to redundancy.
- They reduced overtime allowances and worsened the excessive-work conditions.
- Employers are now entitled to give 84% of the minimum daily wage or salary to young people under the age of 25 who enter the labor market for the first time. In addition, employers now have the privilege to gain portion of the contributions of these workers by the Manpower Employment Organization (OAED).
- They eliminate the 13th and 14th salary in the wider public sector.
- They enforce extra 8% reduction of benefits and allowances in the narrow public sector.
- They cut the last installment of the Social Solidarity Benefit for 2010!
They are examining its short-term abolition!
- They shrinked unemployment benefits; it’s now lower than 60% of the basic salary (instead of 80% of the final salary before unemployment).
- They reduce the number of social security funds to three by the year 2018 (IKA for employees, OAEE for freelancers, OGA for farmers).
All public sector employees who will be hired from 1st March 2013 will also contribute to IKA (rather than the recent social fund of the public sector).
- They impose three-year freeze of wages and pensions in the wider public sector (until 2013).
- The so-called ‘basic pension’ will reach… €360 per month (based on 2010 data)! This pension will be given for 12 months a year. Hence, they have abolished the 13th and 14th pensions in all social funds.
- The State’s obligation to retirees is now limited to a pension of hunger.
- The ‘proportional pension’ will be calculated from the pensionable earnings and the percentage of replacement.
For 39 (instead of 40 years of contributions) the proportional pension (other than basic) falls to 55% of the pensionable earnings for the entire working life.
For 35 years of work the pension drops to 45%.
For 40 years it reaches 60%, disregarding the basic pension.
- Supplementary pensions will be formed according to the economic sustainability of each of the plucked social security funds.
- From 2011 and every two years, the National Actuarial Authority will plan and publish studies according to which pensions will be ‘redetermined:’ Nothing is ensured for workers, not even the amount of the minimum pension.
- The public sector’s pensions exceeding €1,400 will henceforth be subject to LAFKA tax, where LAFKA is ‘Solidarity Account for Social Security Agencies.’ This extra tax ranges from 3% to 10%, depending on the amount of pension.
- They revised the context of granting disability pensions.
- They increase the retirement age of women who work in the public sector, at 65 years gradually until the end of 2013.
- For workers who shall enter the social security system from 31st December 2010, their pension is calculated in two ways:
The first part is calculated according to the previous system for the years of contributions until the end of 2010.
The second part, from 1st January 2011 until the date of retirement, will be calculated with the new, far most unfavorable conditions.
In both cases, the final pension will be reduced up to 50% over the current system.
- Mothers with an under-age child or at least 3 children and 25 years of contributions, may not retire at the age of 50, as was previously valid.
They may receive a reduced retirement at the age of 60 with more than 5,500 social security stamps, whereas until now they could retire at the age of 50.
In order to get full retirement, they will have to be 65 years old (provided that their child is still underage…) while until now they had the right to retire at their 60.
Women who haven’t reached 50 years old in 2012 but have completed 25 years of service, will have to work 5 more years in order to retire at the age of 55.
From 2013 men and women with 3 children or a child with at least 67% disability, will retire at 65, rather than 56 years as was the case before.
The mothers of 3 children may purchase up to 5 years of the so-called ‘notional time of social security‘. This means that each aspiring retiree will dearly pay her procreation.
Also, the new Act suspends the right of men and women with at least 3 children to retire regardless of age limit.
- The men that have entered the social security system before 1993 and have completed 35 years of full working experience, from 2012 will retire later than expected until now.Gradually from 2012 to 2015, they will be forced to work plus one semester per year.
Thus, from 2015 they will retire with reduced pension at the age of 60 with 40 years of service, rather than at 58 with 35 years’ contributions, as was previously valid.
- They increase the minimum contribution period (of 35 years) to 40 years, gradually until 2013.
- The new SS Act contains cuts in the list of heavy and unhealthy occupations.
- From year 2011, unless they are disabled or students, adult unmarried daughters will not be entitled to the pension of their deceased parents.