Insurance Bill: 10 Key Provisions

The draft law of the Ministry of Labor and Social Affairs entitled “Rationalization of insurance legislation, support for vulnerable social groups and other provisions”, according to parliamentary planning, has been submitted to parliament for consideration.

According to a briefing from the Ministry of Labor, the provisions included in the bill focus on four areas: financial support for vulnerable groups of the population, rationalization of insurance and pension provisions, regulation of labor market issues, equality and elimination of discrimination in labor relations and social security issues.

In more detail, the 10 main provisions of the draft law on the rationalization of insurance legislation are as follows:

  1. Providing exceptional financial support through December 20, 2022 to vulnerable pensioners, disability benefit recipients, uninsured seniors, minimum income security recipients, and child support recipients.
  2. Reducing to 10 years (from the current 20 years) the limitation period for unpaid contributions.
  3. Reducing insurance premiums by 3 percentage points.
  4. Increase from 12 to 24 monthly payments on regulated insurance debts.
  5. Extension of maternity leave for private sector employees to 9 (from 6) months.
  6. Government subsidy of 40% of insurance premiums for transferring part-time private sector contracts to full-time employees.
  7. Elimination of the 1% special contribution for insured persons of the former Public Employees’ Welfare Fund (PEF), as well as for other categories of insured persons not insured by PEF. Growth in real income.
  8. Extending to all military personnel and women the right to “five years of military service”, i.e. recognition of up to five additional years of insurance with the payment of appropriate premiums.
  9. Reducing the disability rate (from 67% to 50%) for disability benefits in order to unify all categories.
  10. Establish an early intervention program for children aged 0-6 who are diagnosed with a disability or developmental difficulty.

12 categories of citizens who enjoy benefits

Twelve categories of citizens will benefit from innovations in the social insurance system, as they will receive financial support or other benefits from the bill introduced yesterday in Parliament. The draft law of the Ministry of Labor also included a provision according to which the pension increase coefficient from 01/01/2023 will initially be based on economic indicators (inflation and GDP) indicated in the budget report, and then the difference between the budget report and the corresponding indicators will be paid, published by the National Statistical Office in October.

According to published estimates, the dynamics of economic indicators (9.8% inflation, 6% GDP for the current year) show that the increase will be 8%, since the increase is calculated based on the sum of 50% change in GDP and 50% change in the consumer price index.

Thus, the average pension from 750 euros will increase to 810 euros (+ 60 euros) from 01/01/2023

Most of the 7.5% increase will be paid out at the end of January with the February pensions, and any discrepancy, in this case 0.5%, will be finalized in the fall when ELSTAT will publish official data on inflation and GDP, and will be paid at the end of January 2024.

The draft law specifies that the basic pension of the former Regional State Administration is set at 360 euros, and from January 1, 2023 it will be increased in the manner indicated above. According to reports, in the coming days, an amendment is planned to be included in the bill, which will “slow down” the growth in debt to insurance funds due to the increase in ECB interest rates.

Benefits of the new bill:

  1. 1.7 million pensioners who will receive an increase of up to 7.5-8%.
  2. Debtors, mostly freelancers, who will take advantage of the 10-year statute of limitations for debts to EFCA, provided, of course, that they have not been established by the foundation or KEAO. In effect, the time to set and collect claims for e-EFCA is reduced to 10 years from 20 years, which is currently the case for most funds, except IKA. The use of a 10-year statute of limitations is generally beneficial to those who can use the remaining years to establish pension rights, as it should be clearly understood that debtors who have used the statute of limitations will lose the corresponding insurance time, and in many cases it will be difficult for them to complete the years required for retirement.
  3. Debtors will join the new debt repayment procedure in 24 monthly installments instead of 12, with a minimum monthly amount of 50 euros. The proposed regulation equalizes installments for fixed debt regulation in e-EFKA and the Tax Administration, and makes it easier for debtors of arrears to comply with the regulation.
    At the same time, the criminal prosecution of debtors on regulated insurance debts is suspended for the duration of the regulation, while until now it has been suspended. This avoids the repeated presence of the observant debtor and e-EFKA employees in court to confirm compliance with the agreements.
  4. Employers and employees in the private sector who join the premium subsidy program at companies that convert part-time employees contracts to full-time contracts from January 1, 2023 to December 31, 2023.
    Employers will receive a 40% subsidy on insurance premiums, and full-time employees will receive a monthly salary increase.
  5. Mothers working in the private sector will benefit from increased special maternity leave up to nine months with six that were already operating in the public sector. During maternity leave, ΔΥΠΑ pays a working mother a monthly sum equal to the minimum wage, plus part of holiday bonuses and vacation pay.
  6. Civil servants, since 1% special contribution of insured personsΤΠΔΥ) is canceled and their net salary increases accordingly. It is clarified that this provision does not affect the corresponding lump-sum payments.
  7. Military personnel, since the right to “five years of military service”, i.e. recognition of up to five additional years of insurance through the payment of appropriate premiums applies to all members of the armed forces. Those in uniform who were excluded from the relevant regulation (for example, certain categories of firefighters, coast guard, police and air force members) now acquire this right, regardless of the division of service, regardless of whether they are old or new insured (up to or after 2011) and regardless of the employment relationship they are in (permanent or not).
  8. Government employees who have pension rights and are eligible for early retirement at age 56 by 12/31/2022. Conversely, the possibility of early retirement in the civil service is closed for employees who have not reached the age of 56 by 12/31/2022. According to the relevant provision, the retirement age is now set at 62 years.
  9. 2.3 million vulnerable citizens who, if eligible, will receive emergency assistance by December 20. Pensioners, recipients of disability benefits and uninsured seniors will receive assistance of 250 euros.
  10. Candidates for pensioners with consistent insurance, who went through the epic of applying for a pension. The proposed provision introduces direct examination of the pension application by the last consecutive insurance institution, provided that 1000 days of insurance have been completed in this institution, and 300 in the last five years (previously 1500 and 500 respectively). In other words, for inheritance insurance outside e-EΦΚΑ, the same conditions are introduced that already apply for inheritance insurance inside e-EΕΦΚΑ. This regulation simplifies and speeds up the procedure for assigning a pension in cases of successive insurance outside e-EFKA (for example, the time of additional insurance in EFKA and ΕΔΟΕΑΠ).
  11. Irregularly (temporarily) employed persons. Until recently, the unemployed registered in the register DYPA, could confirm the time of continuous unemployment along with the application if they worked on an occasional basis, i.e. worked no more than 70 days in 12 months. It is proposed to describe casual work as the implementation of 70 days of employment (rather than 70 days of wages) so that job seekers who have been employed in any way (not just paid work) up to 70 days within 12 months, maintain their status as unemployed.
  12. welfare recipients OPEKAwho will no longer have to repay unreasonably paid benefits. OPEKA, in the context of control, identified many cases where citizens received benefits, mainly for disability, without being entitled to them, in the vast majority in good faith, and stopped their payment, recovering unreasonably paid amounts retroactively. outstanding debts from amounts received without the right to them. Assignment and tracking of debts, if terminated, may be made or continued if it is determined that the payment of benefits is due to acts or omissions related to fraudulent acts or omissions of the beneficiary or his/her legal representative.

In addition, for other cases of unjustly paid benefits, measures are taken to distinguish between negligence and fraud, such as a five-year statute of limitations, the possibility of paying in installments (up to 72) or set off against future payments, and not collecting small debts (less than 100 euros). This takes into account the state’s delay in enforcing controls and respects the good faith of persons with disabilities regarding benefits.

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