Bill on mini-insurance of citizens: main provisions

On October 18, 2023, the Greek Cabinet approved the bill on mini insurancewhich includes provisions of a social and social protection nature, aimed primarily at strengthening the incomes of pensioners and facilitating the retirement of insured persons, as well as fundamental changes in the institute of professional insurance of the second stage.

As for the provisions that have already caused great excitement in the market and concern a fundamental revision of the tax regime regulating the activities of not only professional insurance funds, but also group insurance policies, they provide for a variable tax of 20% to 5% on lump sum payments, depending on insurance period – stay in the plan, and accordingly from 10% to 2.5% if the insured chooses to receive payment as a pension.

In detail billwhich is expected to be put out for public comment before the end of the month, includes the following changes:

• Extraordinary support, from 200 to 100 euros, for pensioners with a personal difference of more than 10 euros and a pension amount of up to 1600 euros.
• Encouraging legal employment of retirees by eliminating the 30% reduction in a working retiree’s pension and introducing a non-insurance e-FICA resource equal to 10% of income from insurance work. For working pensioners, the contribution will be equal to 50% of the selected insurance class for the main pension. An annual ceiling on this resource is also introduced, which cannot exceed 12 times the national pension.
  So, for example, from a working pensioner entitled to a pension of 1,200 euros, 360 euros will be withheld under the current regime. If he is employed and his gross monthly salary is 780 euros, then he will receive a full pension, and a special contribution of 78 euros will be deducted from his salary. Thus, his monthly benefit will be 282 euros.
• The limit on unpaid pension contributions increases from €20,000 to €30,000 (and from €6,000 to €10,000 for the former OGA) for debtors who have reached the age of 67 and have paid at least 20 years of contributions.
• For amounts between 20,000 and 30,000 euros, at least 60% of the monthly pension will be withheld, and the rest of the debt will be withheld in 60 installments until it is repaid, as is the case today. The criterion for inclusion in the scheme is a bank deposit limit of 12,000 euros (6,000 for OGA debtors).
  Thus, an insured person with a debt of 29,000 euros is entitled to a monthly pension of 750 euros. Initially, the deduction will be 750×60%, i.e. 450 euros, and for 20 months he will receive 300 euros.
  Thus, his debt will decrease by 9,000 euros. The remaining €20,000 will be included in the 60-installment plan in the 21st month. His new deduction will be 20,000/60, i.e. 333.33 euros, until the debt is paid off, and he will receive a pension of 416.67 euros per month for 60 months.

A prepaid card is introduced to pay most social benefits.

• The conditions for establishing an additional pension for 15 years are being clarified and the assignment of additional pensions that have not yet been assigned is being accelerated.
• Extension for 9 months of payment of maternity benefits through ΔΥΠΑ to non-working (self-employed and farmers) mothers. The benefit amount will be 780 euros (minimum wage).
• Introduction of a prepaid card for payment of most ΔΥΠΑ benefits and ΟΠΕΚΑ.
• Requiring the active OAK to provide free health care in public hospitals for the uninsured to counter any circumvention of the system.
• Introduction of a variable tax on payments for professional insurance.
• Simplification of the procedure for creating social insurance funds.
• Creation of a standard charter.
• Simplification of the procedure for creating ΤΕΑ (voluntary professional insurance funds) by several employers, without requiring an industry/professional connection between them.
• Establishing good governance rules to achieve better results and enhance policyholder confidence in IORPs.
• Improvement of the supervision of ΤΕΑ, which from 1/01/2025 will be entrusted to the Bank of Greece.
• Possibility of transferring savings between different ΤΕΑ, in accordance with the choice of the insured person and any changes during his working life.
• Gradual transformation of mutual funds into ΤΕΑ and rationalization of their regulatory framework.

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