Supplementary Pensions: The plan to abolish the Solidarity Contribution – What increases will it bring

A plan for the abolition of the Pensioners’ Solidarity Contribution (EAS) from the supplementary pensions seems to be being worked out by the Ministry of Labor and Social Security.

Essentially the ministry seeks to reduce this withholding from both main and ancillary pensions. According to the newspaper “Eleftheros Typos” the eventual abolition of the supplementary pension will mean increases of €10 to €71 per month or from €120 to €852 per year for around 400,000 old and new (after 1/1/2015) pensioners receiving an initial mixed supplementary pension over 300 euros.

The increases that pensioners would receive in the supplementary pensions with the abolition of the EAS would be the first after a 15-year period in which the supplementary pensions had experienced consecutive reductions due to the Memoranda.

The EAS

Before the Memoirsthe average supplementary pension was around 300 euros, while after the cuts and the changes I made in the way they are calculated, the average supplementary pension is around 170 euros.

The EAS withholding is imposed on supplementary pensions on a “10-point” scale, starting with 3% for pensions between 300 and 350 euros and reaching 10% for supplementary pensions over 650 euros.

The EAS reservation scale in the auxiliary is 3% from 300 to 350 euros, 4% from 350 to 400 euros, 5% from 400 to 450 euros, 6% from 450 to 500 euros, 7% from 500 to 550 euros, 8% from 550 to 600 euros, 9% from 600 to 650 euros and 10% from 650 euros and above.

The reservation does not show up in old pensioners’ newsletters, as all memorial cuts have been removed and pensioners only see the pension as it is after pre-sickness and pre-tax reductions have been deducted.

Thus, an old IKA pensioner who received a supplement of 455 euros in the pension notice will not see anywhere the original gross supplement of 455 euros, but the pension as it has been formed after the reductions of the Memoranda and before the sickness contribution and the tax. In the case of the initial supplement of 455 euros, the pensioner sees 248 euros, which is the new “mixed” pension, which is 233 euros after the sickness contribution and before tax.

The EAS reduction in the said auxiliary is 27 euros and in order to see it the pensioner should print the annual statement of the AADE with the analysis of his incomes and deductions, which is automatically submitted with the tax return.

On the other hand, young pensioners, because they generally get less supplementary than the old ones, the only reduction they have is from the EAS and from the sickness contribution, both of which are shown in their information notes.

What will change in the adjuncts if the EAS is abolished?

The abolition of the EAS from supplementary pensions will change the whole chain of reductions for the old supplementary pensions and above all it will increase by a few euros the sickness deduction, which enters last before the tax. For example, supplementary IKA with an initial amount of 409 euros has an EAS reservation of 20 euros, while after all reductions and the sickness reservation it is 215 euros before tax. If the EAS is abolished, the pensioner will have an increase of 20 euros, but the reductions – deductions will also increase, with the result that from the increase of 20 euros he will finally get 15 euros, due to an increase in other deductions. Even so, he will be a winner.

How much will IKA and State pensioners earn

According to the newspaper “Eleftheros Typos”, the increases pensioners will have from the abolition of the EAS (based on the scenario considered by the Ministry of Labor) are as follows:

Old (before 2015) pensioners with supplementary IKA earn from 10 euros per month to 46 euros per month, if the EAS is abolished.

A pensioner with an initial auxiliary of 501 euros has a reduction due to EAS of 30 euros and receives today, after all the cuts, 240 euros before tax.
With the abolition of EAS, he will receive 270 euros. A pensioner with an initial auxiliary of 386 euros has a reduction due to EAS of 15 euros and after all the cuts gets 215 euros before tax.
With the abolition of the EAS, the auxiliary increases to 230 euros.

Old (pre-2015) pensioners on State aid earn up to 55 euros per month, if the EAS is abolished.

A pensioner with an initial supplementary allowance of 616 euros has a reduction due to EAS of 55 euros and receives today, after all the cuts, 360 euros before tax.
With the abolition of EAS, he will receive 415 euros. A pensioner with an initial auxiliary of 501 euros has a reduction due to EAS of 30 euros and receives 302 euros before tax.
With the abolition of the EAS, the auxiliary increases to 322 euros.

Caution: The IKA auxiliary gatherings had an additional reduction from the rest of the pensioners with a rate of 30% for the section above 150 euros (law 4024/2011). Therefore, a pension of 400 euros in IKA and the State has the same EAS deduction, but it ends up being smaller for the IKA pensioner, because his pension was reduced more than the State pension.

The increases for auxiliary DEKO-banks and new pensions

Pensioners with supplementary pensions from DEKO Funds and banks will have the biggest increases since the abolition of the EAS in supplementary pensions, because they had and still have the highest supplementary pensions of all pensioners. However, the new pensioners from all Funds will also benefit from an abolition of the EAS, as long as they receive an additional pension of more than 300 euros.

According to the “Free Press” newspaper:

Old (prior to 2015) pensioners with an auxiliary from the DEKO Fund earn up to 71 euros per month, if the EAS is abolished. A pensioner with an initial supplement of 708 euros has a reduction due to EAS of 71 euros and today, after all the cuts, he receives 386 euros before tax.
With the abolition of EAS, he will receive 457 euros. A pensioner with an initial supplementary of 519 euros has a reduction due to EAS of 36 euros and receives, after all cuts, 310 euros before tax.
With the abolition of the EAS, the auxiliary increases to 346 euros.
New (after 1/1/2015) pensioners with an auxiliary from any State Fund earn up to 29 euros per month, if the EAS is abolished. A pensioner with an initial supplementary allowance of 489 euros has a reduction due to EAS of 29 euros and currently receives 432 euros before tax. With the abolition of EAS, he will receive 460 euros before tax. A pensioner with an initial auxiliary of 309 euros has a reduction due to EAS of 9 euros and receives 282 euros before tax. With the abolition of the EAS, the auxiliary increases to 290 euros.

See below the relevant tables of the newspaper “Eleftheros Typos”

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