Retroactive payments: possible solutions

The Greek government is considering two possible scenarios for the payment of retroactive pensions – cut gifts and additional benefits, after the recent decision of the Plenum of the State Council

The first one provides for retroactive payments on additional pension-gifts only to those who applied to the court before July 31, 2020, the second – for the offset of retroactive payments due to negative personal differences of the Katrugalos law (νόμου Κατρούγκαλου).

The most difficult scenario is the payment of all retroactive payments in annual installments from 2023. This possibility is rejected by economists because of the high budget costs (about 2.5 billion euros) and due to the extremely unfavorable economic situation.

One thing is certain – depending on the economic situation, the final decisions will be made closer to the end of August. It is likely that at the opening of ΔΕΘ in early September, the Prime Minister will make relevant statements.

Compensation for cut retroactive benefits (gifts and additional pensions) with the negative personal differences of the Katrugalos law (along with pension increases from 1-01-2023) is a scenario the government will be exploring for pensioners who have not taken legal action. In fact, the possibility is being considered for them to compensate for retroactive payments with the rest of the personal differences that they receive after the recalculation of pensions under Law 4670/2020.

Thus, the state will also be able to avoid gigantic expenses at a critical time for the country’s finances, and pensioners will reduce or even zero out their personal difference, ensuring an increase in pensions from 01/01/2023. Thus, a pensioner who is due to receive retroactive gifts for 11 months (800 euros) and has a personal difference of 250 euros, will count it towards retroactive gifts, will receive the remaining 550 euros in installments, and from January 1, 2023, his pension will increase every month (e.g. 50 euros), as he will cancel out the personal difference by including it in his pension.

Payment of retroactive payments in installments to all pensioners who applied to the court before 31/7/2020 and were satisfied with the decision of the Council of Europe. This scenario provides for automatic reimbursement of amounts (for the period from June 2015 to May 2016) to those who applied to the court. These are approximately 350,000 pensioners who have been in a lengthy legal battle for ten years, demanding retroactive payments totaling 700-800 million euros, losing both money and time, writes cnn.gr.



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