The number of working pensioners in Greece has increased fivefold under new and more favorable tax provisions, according to social insurance agency EFKA.
Based on e-EFKA platform figures, as of July 4, 2024, at total of 182,700 pensioners have registered to continue working, compared to 36,000 pensioners under the old system, which withheld 30 percent of a pension check for continuing to work.
The old regulation was in effect until December 31, 2023, and that had been preceded by a law by the SYRIZA government that withheld 60 percent of a pension check for continuing to work. The fivefold rise in working pensioners is attributed to the change in taxation that was introduced by law 5078/2023, taking effect on January 1, 2023.
Under the current law, pensioners who wish to continue to work and receive a pension at the same time will have a monthly withholding fee that will be paid into EFKA.
Working pensioners who are in permanent positions will have 10 percent of their pension withheld to be paid into EFKA, whereas if they are freelancers or contract workers, that amount is a withholding of 50 percent of the insurance coverage level they have chosen.
Working pensioners in Greece increase income and future pension
According to e-EFKA, the current regulation will allow pensioners to increase their income as well as their future pension. When they decide to stop working altogether, they can apply anew for a higher pension. The agency added that the measure was also introduced to fight undeclared work by pensioners.
Four kinds of pensioners are required to register on e-EFKA: pensioners under the EFKA system who started working anytime (including before the new regulations) and continue to do so today; EFKA pensioners who started working as of January 1, 2024, even if they had stopped working before that; anyone who has applied or plans to apply for pension and to continue working without interruption; and anyone who has applied for pension and continues to work after their application.
The process of application is very quick and simple, the agency said. Failure to register while still working, EFKA warned, will incur a fine equal to 12 main and supplementary pensions. Every month, 25 percent of a pension will be withheld until the full fine is paid off.
Exceptions to paying the extra insurance coverage through EFKA include persons with mental and physical handicaps (including work-related illnesses), parents with four children (under conditions), and pensioners under other specific categories.
“We restored a great injustice that ‘criminalized’ working pensioners through large amounts withheld from their pensions,” e-EFKA Governor Alexandros Varveris said.
“The measure’s success signals the achievement of three key goals, which are the fundamental management of unregistered labor, the provision of incentives to qualified professionals to return to the labor market, and the increase of public revenue. Pensioners are being favored, and the Greek economy benefits,” he added.
