Legislation to decrease pension contributions to self-employed and farmers has been submitted to the Greek Parliament on Monday. It is estimated that 250,000 people will benefit from the reduction expected to go in effect as of 1. January 2019.
Pension contributions for freelancers will be reduced to 13.33% from 20% currently. Affected will be freelancers with net taxable income of over €7,032 annually.
Farmer’s contributions will be 12% from 18% currently.
For the category of so-called “new scientists” contributions will be 13.33% until the 5th year of the professional activity.
Most benefited from the cuts are reportedly freelancers and self-employed with annual gross revenues between €7.033 and €9,346 as they will pay the lowest social security contribution of €157.9 per month – €117.2 for main pension and €40.7 for health care.
Example: a self-employed with annual income at €20,032 will pay as of 1.1.2019: €173 for main pension + €115 for health care + €64.5 for supplementary pension and lump sum = €352.5. Before the reductions the monthly contribution would be at €469.
For self-employed doctors, engineers and lawyers, the reductions affect their supplementary pension and contributions for lump sum.
The reductions in the contributions for the main pension will end up that self-employed will receive a bag full of peanuts when they reach the retirement age.
However, the legislation allows that they pay higher contributions in order to receive also a higher pension.