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Council of State: Pensions and contributions of 2016 Law “unconstitutional”

The Council of State has ruled that basic provisions of the 2016 social security legislation – Katrougalos Law – were against the Constitution. The CoS ruling refers to provisions of main and supplementary pensions as well as social security contributions of self-employed.

The Council of State has ruled as “unconstitutional” the following privisions of Katrougalos Law:

  1. the legislation about the calculation and payment of supplementary pensions was drafted deliberately and without prior studies
  2. the decrease of supplementary pensions over 1,300 euros per month as it “contravenes the equality of workers.”
  3. cancellation of replacement top rate of 46.8% for large pensions and pensioners with 42 years of registered labor and paid social security contributions.
  4. social security contributions by self-employed and free lancers should be on the same level as those paid by employees, that is salary workers. Self-employed and free lancers have a cap of 20% of their incomes for contributions, while employees pay 6% with the rest being paid by employers.

According to CoS ruling, all pensions will have to be recalculated on the level of December 31, 2014. The CoS renders that all pensioners are equal and cannot be divided into old and new.

The ruling in fact obliges the state to issue a new legislation and pay more for pensions, main and supplementary.

However, the Council of State also ruled that there cannot be retroactive claims and that the recalculated pensions will apply as of today.

“Katrougalos Law” that cut pensions especially for new pensioners was implemented in 2016 as a prerequisite of the 3. bailout agreement signed between SYRIZA and the country’s lenders in summer 2015..

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