Greece’s biggest insurance fund for the private sector IKA has apparently stopped issuing pensions due to retirement age, invalidity or death for all those below 67 years of age or for those with less than 4,500 working stamps. According to an exclusive story of daily Eleftheros Typos, IKA will not issue new regular or temporary pensions and thus retrospective as of 1.1.2015. “The official directive was published by IKA on August 12th, that is before the government and the Parliament voted and adopted the new pensions law 4336/15,” notes Eleftheros Typos.
The unprecedented decision suspends the issue of new pensions due to age, invalidity of death (for the surviving spouse or children).
According to Eleftheros Typos, new pensions will be issued only for those completing the 67th year and who have at least 4,500 working stamps (social security insurance days)
No pensions, neither regular nor temporary will be issued for all other categories of insured.
However, exceptions will be made for those below 67 years, who are under “a state of emergency”, like economical insufficiency or health reasons. The insured will have to prove that he/she needs a pension due to financial problems or due to illness. Each case will be evaluated by the competent body that will decide whether the applicant is eligible for ‘temporary pension.”
But even in these cases the insured will have to sign a paper and commit to return the pension and allowance amounts he received if his pension was calculated with the old pensions law – that is before the new law. The return amount will have an interest of 5%.” (full article and more details in Greek)
In simple words: if the insured persons have not reached the age of 67 or if they have less than 4,500 IKA stamps but they are entitled to a pension with fewer stamps and at an earlier age due to disability of death) they will have to prove either their economical problems or their health problems before applying for pension.
Still too complicated?
Supposed the insured is 53 years old, long-time unemployed and has 4,000 IKA stamps – some 13 years of work with IKA insurance. Chances to get a job in recession and high unemployment Greece are more than slim. If he/she has no savings or other assets he/she can apply for an early pension and get a temporary pension until he/she reaches the age of 67.
Temporary pension is 80% of the regular pension.
I cannot tell you how much is the regular pension for such a case, much depends on the salary of the last years and other factors. But the eligible 53-year old could get some 200-250 euro per month for the following 14 years until the age of 67. Not enough to live through the month? At least, he will have medical care… Because long-term jobless lose the right to medical care after one year.
If you are a widow, 60 years old, and own a home and 3,000 or even 20,000 euro at the bank, KTG understands that you will have to wait until 67 in order to receive the proportional rate from the deceased person’s pension.
If you are an IKA-insured 65 years old – retirement age with old pensions law – I suppose you can spend the days of the next 2 years feeding pigeons in the park while awaiting for your pension to arrive.
In real life, the IKA decision cancels tens of thousands of retirement applications submitted by 01.01.2015 and onwards and threatens to leave without income estimated 70,000 to 80,000 IKA members, awaiting for the three above mentioned categories of pensions.
It is not clear if other insurance funds will follow the IKA decision, however Eleftehros Typos notes that all funds, IKA incl. are waiting for directives form the Labor Ministry.
UPDATE: Later on Thursday, IKA withdrew the above mentioned decision that was blocking thousands of pensions…
Reason? See below my PS and my post on Tsipras resignation…
PS I hear Tsipras is heading to early elections. The absolute majority is certainly secured just because of the IKA-insured :p
Absolute minority… or do you know anybody who will not boycott elections?
How can this be legal?
everything is legal under MoU
More adminestration.
More Goverment workers.
It is a never ending Story!
You see the amount of People every morning by the IKA Office!
a Greek Person spents 20% of his life in raws and waiting for Service.
It is astounding to an outsider like me that a pension (no matter how small) for an able-bodied 53-year old man would be considered a valid way to mitigate unemployment from now until his death (and even beyond — with a pension for the surviving spouse). In my mind this goes beyond compassion and into enablement of unproductive existence.
As a reference — the duration of unemployment assistance in most US states at the moment is limited to 26 weeks (half a year). It is longest in Massachusetts (30 weeks) and shortest in North Carolina (12 weeks). During the depth of the Great Recession a few years ago the limit was temporarily extended to 99 weeks (less than two years).
If policies assume that the level of unemployment in Greece would not improve for the next 14 years, then these policies should be unacceptable.
Considering that the USA is the only developed country of the world without a proper welfare system, and has nothing to do with any European approach and history — NO. No and no again.
What you are recommending is retreat to a Third World level of economy and society.
What NO? He wrote about unsustainability of system where people after 50 can retire and get money from state budget (yes from state because pension funds can’t pay so much) even after death.
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Are you against sustainability? Forget about USA – this is not about USA, it is about Greece. If Greeks will continue to waste, they will return to third world soon. Think about it please.
Sustainability would also mean to drill for resources like oil in Slovakia and as you can’t get any out of your grounds stop driving cars. But instead you let Indios in Brazil get exterminated for the steel for the cars and support dictatorships to get oil – right now every car-driver praises the IS because of them fuel is so cheap – and so that’s really sustainable as for lazy slobs asses millions of people get slaughtered; it’s also very democratic.
Sustainability in this case means: production >= consumption.
when creditors destroy farmers and tourism with overtaxation and high VAT, there can be no sustainability in Greece
sustainability is: production >= consumption. (with USA or without, with IMF or without, with farmers or without, with imperialists or without)
I agree higher taxes are bad for economic development. They are just a symptom of too much borrowing in the past.
Having said that, Greek tourism seems to simply be “catching up” with the VAT rates of some of its Southern European competitors (e.g., Portuguese tourism — based on what António wrote). This year also turns out to be pretty successful for the Greek tourist industry — despite the disruptions caused by the introduction of capital controls and the higher VAT rates introduced in July in the mainland. According to the latest figures last month is the best month ever for the Greek tourist industry, thanks in part to the more competitive prices (one positive of the otherwise negative effects of austerity).
I do not know enough to be able to comment about the farmers.
higher VAT rate in tourism and scrapping tax-breaks for the islands will be implemented in October. Therefore we will see the impact… next year.
Look, It is always the same, because it is lending procedure:
If borrower pays, and have high credit rating, lender does not intervene,
if borrower can’t pay but he is trustworty and comes with realistic plan, lender just says go ahead
but if borrower must be forced to propose reforms, lender starts to inervene, and looks for collateral
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and this is not yet the case of Greece, because here borrower was not only forced to reforms, but borrower cancelled some of already imlemented feforms and was attacking lender, plus gambling.
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You don’t like VAT increase?
OK start to collect direct taxes (income). You can’t. Your discipline is lowest in EU.
Or start to save on Pensions (10% of your budget expenses) – you don’t want.
In this case lender must say – do this do that, shut up, or leave Euro.
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It is not personal, it is pocedure. It’s your fault:
who borrowed like mad?
who wasted borowed money?
who cheated on statistics?
who started to pay unsustainable pensions?
who was not able to repay few years ago?
who voted Marxists after few years of reforms?
who was gambling with lenders?
who stopped some reforms?
who started criminal procedure on statistical chief that repaire false numbers?
who was in default this year?
who capitulated?
Do you really think somebody is interested in your proposals now? 🙁
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If you do not like it leave Euro.
correction – state contribution to pensions is not 10% of budget expenses but 10% of GDP (thus much higher portion of budget)
Take 250.000 refugees out of Italy and Greece or go leave the EU
What is so remarkable is that economic illiteracy is the dominant factor in the management of the eurozone, and people seem very happy to copy-paste the drivel everywhere.
They also issue ultimata, such as “if you don’t like the incompetent way we do things, you should leave our little boys’ club”.
WE JUST CAN’T WAIT to see the islands boni for the Spanish, Italian and Portuguese islands get scrapped too… good luck …followed by separatist movements in Sicily and Sardinia, haha
Most Diaspora Greeks were able to come only because of the strong Dollar and most friends of Greece came with cash to show support giving the people real money that the state and EU can’t steal away so easily. Also many of them remembered well the times of Drachma and weren’t scarred away by the German blackmail to leave them stranded in Greece.
No, they are a symptom of right wing economic mismanagement of the eurozone — called austerity economics. There are plenty of economic alternatives, but they involve the Germans having to admit that they fucked up everything in Europe. Ha! No way: they’d rather everyone die first.
That means cutting back consumption, which is of course the austerity model. As consumption is cut back, tax revenues drop, and public services cannot be financed, the population is with declining incomes and increasing unemployment, and hey presto! Now we have a catastrophic economic depression — with no hope of recovery.
That’s how your economics works out. We have known this from Keynes onwwards, but still you idiots think you know better. It’s a bit like trying to explain to someone that the Earth is not flat at all, but a sphere. It’s obvious, you tell us, that the earth is flat! You can see it!
This sustain term is stolen from the Greens by some white collar mobsters and it was meant regarding energy not money, but as most people in Europe have everything they need consume and produce can only be sustainable if you feed the poor.
All of the EU with demographic shift has unsustainable pension systems. The German ones survive on the payments into them by the very large number of Turks — the same people that the Germans tried to deny their pensions in old age, if they left Germany. This was blocked by the courts. Europe was told in 2000 that it needed to have massive labour immigration to support economic conditions and pensions for the future — but only Germany did that (up to a point). The reason that Greece has problems paying pensions is primarily because its economy has been destroyed by Troika policies — not because the system was significantly worse than Italy, or other countries’.
“All of the EU with demographic shift has unsustainable pension systems.” – EXACTLY !!!
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Therefore it is ABSOLUTELLY necessary to change those systems from current PAYGO to individual savings/insurance asap.
Some countries in EU already started to build such systems fortunatelly.
What do you care? The pensioners who don’t die of hunger, will die of missing medicine or commit suicide. So the sustain mission is achieved except for the ones that get erection when they see dead.
Have you been celebrating the reopening of Radio/TV Mr. Social justice?
Although ERT is financed by fees, was making profit and can’t feed your hate, the Troika allowed in 2014 the hiring of 11.000 people to the public sector, so far only 7000 got hired this year but wait I know why you hate it. It’s because they broadcast in Greek and Greek language – as your racism pointed out already – means self-isolation and then you post in your Cyrillic lame copy of Greek. Need a brainwash?
This was on the radio: Δύο αιώνες μετά bandcamp
Not possible, because neoliberal damage to economies has resulted in irregular employment histories, people unemployed for long periods, low contributions etc. The only possible result will be most old people in severe poverty and dying of hunger — as used to happen.
This is the logic of free markets — that too many idiots voted for across the EU. 1% become stinking rich, 10% are ok, and the rest can fuck off and die.
You exactly understood that ‘Mr 53 years old’ is just an example and also you understand that the Greek system is much more American than European as nobody was thinking ten years ago it would ever be necessary that unemployed will get money more than 12 months. So now is the point to see that even Samaras was on a way to introduce an extension and make it more European but you’ve left this out as you only aim on distortion.
Id say both you and xenos have a point. On the one hand government should ensure that everybody is able to afford the necesseties of life
That means a roof over your head, health insurance, food and a very small amount of money extra for whatever personal needs you else might have. BUT and here is where I think Plamen has a point, this should not be done via Pensions, because everyone can see that the example from up above wont work.
A 53 year old who has worked/payed into the system for only 13 years is supposed to be able to retire now without any incentives to once again look for a job? That cant work.
So as I said before, it seems to me you need to get away from pensions as the only real social safety net. Cut 30-50% of the upper part of the pensions and use that money to build a system that provides for unemployed and/or uninsured people.
Greece did not have the financial conditions to create a modern welfare state, with attention to needs as opposed to entitlement from social insurance. By the mid 1990s, the neoliberals of both Pasok and ND were denouncing the very small welfare system (mostly pensions) as the cause of Greek economic problems. Therefore there was no chance of a welfare system like Scandinavia or even Germany.
So, how do you think that with mass unemployment, high taxes, poverty and complete chaos, Greece is going to be able to create a social protection system? It’s not going to happen — meaning that third world poverty is the only possible result. Pensions have been used — along with a few other policies such as agricultural workers’ benefits — to protect the poorest Greeks from destitution. The fact that the system was political abused by Pasok and ND is an issue.
“So, how do you think that with mass unemployment, high taxes, poverty and complete chaos, Greece is going to be able to create a social protection system?”
I look at this the other way around. When if not now will there ever be changes?
This could have asked himself Mr Kammenos – “Now I feel like a real politician!” – when he got pelted with eggs and water-bottles on Kós, where just a few days ago one 16 year old refugee died of thirst.
It’s really funny how the proud of itself bullshit society can watch live on TV how all this people die slowly on their trail of tears. Instead the German zombie government could call some ambassadors in and pick the refugees up in Izmir, fly them out and show some humanity to their new fellow citizens.
Greece instead could be smart and give out jobs; as doctors are needed.
@che, I agree with your point wholeheartedly. Each crisis is an opportunity to fix broken systems that were supported by too many beneficiaries.
I also agree with your thought about ensuring a _temporary_ safety net, which has to replace early retirement used as a crutch. The politicians should make the retirement age as high as necessary to make the retirement system sustainable _and_ saving enough money to use towards temporary unemployment assistance. (I am not sure; maybe it already exists in Greece, but the long-term unemployed are no longer eligible to get it). In addition to welfare support for the poor unemployed, use the funds to provide (re-)training for jobs that are in demand, help them with the job search (writing a CV, interviewing, etc.), give companies incentives to hire long-term unemployed). For those unemployed with an entrepreneurial spirit — provide mentorship in developing and executing a business plan, and offer a lump sum instead of months of financial assistance, so that they can start a business. If the economy in Greece cannot generate enough jobs for the existing number of unemployed — help them with language training and finding employment in an EU state that has a job for them. There’s a lot politicians could try to do to provide their compatriots with an chance to live a dignified and productive life rather than get a “temporary pension” of a couple of hundred of euros in perpetuity in the name of compassion.
I also read some time ago Giaourti’s posts about the large number of foreigners (Albanians, Bulgarians, Romanians), who work in Greece (some illegally, others less so). It seems the jobs are there; it’s just that the long-term unemployed Greeks are not willing to accept them. What are the reasons for that? Even if these jobs are not paying a whole lot, it must be more than 200 euros / month. Isn’t working such a job more dignified than living on society’s handouts?
This is just right wing propaganda. Greeks are now doing the jobs that Romanians, Albanians and others were doing 10 years ago — which is why so many foreigners left Greece. Your accusation that Greeks are lazy is just Nazi propaganda. You should be ashamed of yourself coming here to post these lies.
Despite Germoney’s economic terror against Greece the unemployment this spring went down to 25% but without the bullying we would have seen 23%! All your stupid Clinton-Blair-Schröder-ideas are not working for European states in crisis. Stupidity maketh the men! See: 600.000 Bulgarians in Spain got unemployed and left, why? These jobs are gone, same in Greece, the banks don’t even give credit to companies that need to pay their workers, investments zero. Fitting to your other fantasies about Greece I never use the word “foreigner” but some picker job you may find in the fields, 28 Euros for 10-12 hours or so, without insurance, you can “sleep” in the green house but don’t use water for washing as water is for growth and if you protest too loud after they shot at you you will have to pay fines to the judge.
The troika, btw has no intention for small businesses to start, if they say competition it means destroy small independent biz as only big chains will invite them for cocktails on yachts.
necesseties of life: do not forget access to education. The formularion I prefer would be: eveybody should have an adequate income and access to edication, health care and safe home. If edication becomes exclusivly a matterr of money then something must be wrong and the future is bleak.
2008 crash did not caught everyone by surprise
In a research work dated November 2005 – more than two years before the banking system crash – and signed by Raghuram G. Rajan, former (2003-2007) IMF Economic Counsellors and currently the Governor of the Bank of India, the plausability of a total miss of control of the systemic risk embedded in the new financial instruments (type CDS and CDO) was assessed. The new financial instruments were ironically set up to ‘dilute’ the risk. In such an event, the author antecipated, the cost would have to be supported by several generations (denying the official explanation of pension fund drainage due to the increased longevity).
If banks also face credit losses and there is uncertainty about where those losses are located, only the very few unimpeachable banks will receive the supply of liquidity fleeing other markets. If these banks also lose confidence in their liquidity-short brethren, the inter-bank market could freeze up, and one could well have a full blown financial crisis. [P. 26]
While it is hard to be categorical about anything as complex as the modern financial system, it is possible that these developments are creating more financial–sector induced procyclicality than in the past. They may also create a greater (albeit still small) probability of a catastrophic meltdown. Unfortunately, we won’t know whether these are, in fact, serious worries until the system has been tested.[p. 27]
We should be prepared for the low probability but highly costly downturn. In such an eventuality, it is possible the losses that emanate from a financial catastrophe cannot be entirely borne by current generations and are best shared with future generations. Some of the mechanisms for sharing such systematic risks with future generations such as (defined benefit) social security are being changed.[p. 37]
Full study here:
http://www.nber.org/papers/w11728
During the second half of the nineties early retirement was pushed everywhere in Europe to fight unemployment. The average age for retirement was between 55 and 60 years then. That this solution could not last forever was clear from the very beginning, but everybody was hoping that the recession would be short and new growth solve all the financial problems. Unfortunatly this was not the case and the whole system had to be adapted to the new situation. The rents now in Greece are for many just too much to die and not enough to live. Its shocking to see the tremendous differences that now exist in Europe. To get a rent of 200 Euros per month at 65 you have to work (and pay) between nine and ten years in Germany and other richer countries like Austria, Swittzerland etc.
I wouldn’t be so sure about, in Germoney there are around ten million people now that will never see these 200 Euros and the number keeps growing or do you think all the crap-delivery-heroes earn enough to pay for a private insurance? They all will have to ask for welfare but in a few years the social security will be scrapped just like in all European states and then all the Antigreeks that now shout “unsustainable – criminal – waste – lazy” will scream “your resistance was too lame!” All this will be no big deal as the social security is only for counter insurgency but in countries like Germoney there won’t be any social revolts, only social cannibalism.
Rents you pay a landlord or a bank, from where do you took “rents” for “pensions” as translation?
with ‘rents’ some commentators here mean ‘pensions’
Thanks, I know, I was just wondering what kind of German dialect from Romania this might be…
sorry, “pension” is correct in English. “Rente” is the German equivalent.