Pension increase fraud

Journalists of the Greek edition dimokratia found that in the decision of the government on increase in pensions there are several unpleasant surprises, which the authors openly called fraud.

The government’s decision to introduce a series of significant “cuts” to pension increases continues to provoke backlash, as it has resulted in many people either will not receive them at all, or they end up far below the originally announced 7.75%. That’s why, just days after the pensions were paid, Labor Minister Kostis Hatzidakis was “forced” to announce a new emergency benefit for those who fell victim to the criteria and were forced into austerity.

It should be recalled that out of 2,600,000 pensioners, almost half – 44% – either did not receive anything or received very small amounts. It is they who will now be covered by the government, but not through the abolition of laws that reduce growth, but through a lump-sum allowance, which, of course, will not cover the losses incurred.

Democracy reports that the abolition of the personal difference and the special solidarity contribution, which is applied on a phased basis for basic pensions over €1,400, means that the final amounts that pensioners see in their accounts are fraught with unpleasant surprises. Today, we bring you new cases illustrating a scam that was orchestrated over the course of several months to ostensibly provide significant support to retirees, and which ultimately turned out to be…winning.

1. A pensioner until 13/5/2016 (commencement of the Katrugalos law – law 4387/16) has a pension of 1391 euros (national + funded pension). Given the increase of 7.75%, he should receive 107.80 euros. Thus, his new pension should be 1498.80 euros gross. This person received an increase of 47 euros net, and the reason for this is, on the one hand, the increased taxation, which led to additional withholding at source, and on the other hand, the solidarity contribution, which was zero as long as it was lower 1400 euros. However, after the increase in the pension, the amount exceeded 1,400 euros, and therefore he was charged a 3% solidarity tax. As a result, he received only 1/3 of the amount he should have received as a raise.
2. A pensioner after 13/5/2016 has a pension of 1902.61 euros (national + funded pension). Given the increase of 7.75%, he should have received 147.45 euros. Thus, his new pension should be 2050 euros gross. He received an increase of 52.64 euros net. The reason is again the increased tax and solidarity contribution, which in this example is 6% for amounts up to 2,000 euros and increases to 7% for amounts over 2,000 euros. In both examples, an additional 6% sickness premium is charged.
3. A widower pensioner until 13/5/2016 has a net pension of 411 euros and has not received a single euro increase. What all three examples above have in common is that there was no personal difference in how pension cuts work!
4. The pensioner until 13/5/2016 has a pension of 1030.97 euros (national + funded pension). This person had a personal difference of 67.80 euros, and with a 7.75% increase, he should have received 77.32 euros more pension. Due to the personal difference, he received a raise of 9.52 euros.

PS In fact, those who have a pension below 1400 euros, that is, the vast majority of pensioners, will benefit from this law. And God forbid to get this pension with the current laws.

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