By Kostas Katikos
A plan to further strengthen pensioners through an additional increase in pensions to compensate for the losses caused to their income by high inflation, studies the government's financial staff.
In view of the package of measures for households and businesses preparing to be announced by Prime Minister Kyriakos Mitsotakis at the Thessaloniki International Fair (ITH) in early September, the government has set the support measures for pensioners in one of its main priorities.
This option is not accidental as the financial staff have reached evidence indicating that the recovery of income losses for pensioners from the ten-year austerity of the memos is significantly behind employees.
In 2019-2026 the nominal increase for the average full-time salary was 28.5% at the minimum reached 39.4% while in pensions the increases that began to be paid from 2023 onwards reached cumulatively 16.3%.
In the same period cumulative inflation moved to about 21%.
In practice the increase in the average full-time salary and minimum wage exceeded inflation, while in pensions the increases were below inflation by almost 5%. The problem is stronger among pensioners who had a personal difference as they did not get all the increases in the period.
According to information from Capital. gr between the proposals discussed and costed to support pensioners include:
1. The creation of a special pension protection mechanism against inflation of basic goods. The pension protection mechanism from high inflation could be activated this year with an additional 2.5% increase. General inflation may move at 5% but does not reflect the actual cost of living the elderly, which is higher as individual price indices in species in need (food, energy, medicines. and rent) is above inflation. This mechanism could cover with an additional increase part of the difference between the increase in pensions and the index of accuracy in specific products and services. In order to proceed with such a proposal, the clause of the Katrugalos Act providing that the annual increase in pensions cannot exceed the level of inflation.
2. The granting of a new increase in the permanent allowance for pensioners. The amount of EUR 250 last year is rising to EUR 300, for this year and is given to more pensioners. But there are thoughts about a new extra increase so that the amount to be paid by pensioners this November (two months after ITH) is probably at EUR 400.
3. Reduction of contributions-retentions to main or ancillary pensions. The scenario already being prepared by the financial staff includes the reform of the Solidarity Contribution (ESI) imposed throughout the amount for principal pensions of more than EUR 1,400 and for ancillary over EUR 300. The main pensions are considered to be deducted EUR 1,400 from the total amount of the pension and the reservation to be calculated in excess, i.e. in a pension of EUR 2,200 the reservation being imposed at EUR 800 (2,200-1,400=800) rather than at the total of EUR 2,200 currently in force. Auxiliaries also consider the abolition of the levy. The reduction of reservations in the EAS however, has a disadvantage as it does not concern all pensioners, but 400,000 pensioners who after the Katrougalou Act (after 13/5/2016) receive a national and repayable pension of over 1,400 euros and another 250,000 pensioners with a subsidiary of over 300 euros.
The prevailing scenario, however, is to give an extra increase in pensions with an inflation clause that will be activated every year once inflation exceeds a certain threshold. The cost of this proposal is around EUR 500 million and covers all pensioners.
No casualties were made up.
Main pensions suffered cumulative cuts that in many categories reached 20%-45% in 2010-2018. By 2022 pensions were frozen because there was the clause from the 2015 memorandum prohibiting increases. From 2023 onwards increases of 7.75% were given in 2023, 3% in 2024, 2.4% in 2025 and 2026.
Yet. for a pensioner who lost 30% of his pension, the increases have not covered half of the loss, a pensioner for example taking 1,500 euros and after the memos the pension was reduced to 1,050 euros, with the increases he began to receive from 2023 and then arrived at a pension of 1,213 euros. The loss to the memoranda is 450 euros and so far he got the 163 euros back with increases. Recovering losses is only 35% and there remains a 65% loss . that has not been restored
If the inflation factor that eats increases is added, then the effect on the purchasing power of pensioners is negative.
In wages there is something similar but on better terms. Losses from memoranda reductions have been restored over half and in any case to a greater percentage than pensions. However, in real terms (market power) income losses remain close to 30% compared to 2009.
