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Low-pensioners see cuts of 30% as pensions reform 2016 goes into effect

While creditors and Greece negotiate for further pension cuts after 2019, the provision  of the pension reform of 2016 goes into effect as of today. Especially affected are pensioners with disabilities, pensioners with 15 years of work and widows, who will see their pensions cut by 30%.

Workers who went into retirement after May 2016, will see the pensions be calculated a new according to the so-called Katourgalos Law named after the labor minister at that time Giorgos Katrougalos. According to this law, the pension is a mixture of the newly introduced National Pension and the pension according to contributions.

The National Pension is €384 for 20 years of social security, €345 for 15 years of security. The National pensions is reduced by 2% for every year missing until 20 years.

With the new calculation, the minimum pensions start at €195.90 for widows, at €288 for reduced retirement pension. for the last category, the maximum pension will be  €414.90 gross. Before the Katrougalos Law it was 486 euros.

For people who have 15 years of social security, the replacement rate is with 11% particularly low. For average income of 400 euros, the pension will be €46.2, for 500 euros €57.75 and for 600 euros €69.30.

Apparently the Katrougalos Law took into consideration the low wages after  2010, wages that are stuck between 400 and 500 euros gross per month.

Particularly low are the pensions for people with disabilities after 15 years of work. For those with disability rate up to 67% the national pension will be reduced at 50%. Those with disability rate 67%-79,99%  will received 75% of the national pension, while only those with disability over 80% will received the whole national pension.

Also low are pensions for widows of low-incomers with few years of social security.Pensions will start at €195.90 and reach maximum €207.54 for average income of 600 euros and 15 years of insurance.

Katrougalos Law has created a new social problem as it targeted especially widows pensions. A widow of up to 52 years old receives 50% of the pension for three years only and 60% of the pension if the widow is 55 years old and above. Then she/he has to wait until the age of 67 to keep receiving the pension, which is 50% of the primary pensioner.

With the current situation in the labor market, it is mathematically impossible for someone over 50 years old to get a job and start paying contributions to secure pension eligibility at 67.

The minimum pension with 15 years of social security contributions affects especially seasonal workers like in the tourism and construction industry. And will affect a whole generation in the future, because of the high unemployment and low wages since 2010. One should also take into consideration the high rates of black labor and the part-time labor that has been on dramatic rise in the last two years.

Meanwhile, creditors have been putting incredible pressure on the Greek government to broaden the tax-free basis own to 5,600-6,000 euros from  €8,000 currently. It is one of creditors demands to conclude the second review of the Greek program. Greece’s lenders came up with a new package of austerity for after 2018 accepting insane demands of the International Monetary Fund that has not decided yet whether to participate in the Greek program or not.

The neo-liberal so-called ‘reforms’ always target the low-incomers, the low-pensioners and the vulnerable groups of the society.

Total impoverishment of a whole society is written in the starts.

PS at the same time, pensions have not been cut in the banking sector… but oh!  ‘ve said this already.

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One comment

  1. là, j’ai carrément envie de vomir !