The pension increase announced by the authorities will be lower than (official) inflation in 2024, and almost 1 million beneficiaries will be excluded from the “adjustment program” due to the so-called “personal difference”.
Increases in pensions in the current 2023, as well as for the coming 2024, are formed below the consumer price index (CPI) due to inflation and GDP growth. And since economic growth always lags behind inflation, the corresponding provision law of Katrougalos was aimed at reducing real wages (disposable income).
In 2022, inflation hovered at 9.6%, but growth was nearly two (2) percentage points lower at 7.75%. And that’s because they were calculated half inflation and half GDP.
The same will apply in 2024. Half of this year’s inflation (2.5% compared to 5%) and half of GDP (1.4% compared to about 2.8%) will be taken into account. This results in a smaller adjustment of pensions by 1.1 units.
Consequently, within two years, pensioners who received allowances, and this is almost 40% excluded due to “personal difference”, really lose more than 3% of their income.
A relative recovery will begin in 2025, when pensions will begin to be adjusted for inflation. Unless, of course, the forecasts of economists are correct …
If the calculations are correct, since pensioners spend almost all of their income on goods and services (food, energy, medicines, etc.) that adjust faster than official inflation, there would be at least some long-term guarantee of disposable income. At the same time, pensioners, as economically active persons, should take part in the growth of GDP.
But that’s not all. More than 1.2 million retirees (mostly former employees) also receive additional pensions. Which will not increase even in the coming years, since the relief fund (ETEAAAP) is subject to zero deficit rule: He pays as pensions what it collects from the contributions of active workers.
And these incomes are constantly decreasing. Both because of underemployment and lower wages in relation to the past, and, above all, because of the insurance of new labor market entrants in the TEKA New Capitalization Support Fund. So the redistributive ETEAEAP does not have enough resources.
In addition, pensioners continue to:
- pay 6% contributions to both the basic and supplementary medical pension (EOPYY).
- Double “tax”, both to the tax office and the Pension Solidarity Contribution (EAS).
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