Thousands of Greek retirees who continue working are seeing an increase in their pensions, as the country’s social security fund (EFKA) has started issuing adjusted payments.

To prevent these new pensions from facing higher deductions under the Solidarity Contribution for Pensioners (EAS), the Ministry of Labor and Social Security is preparing a legislative amendment that could soon be introduced in Parliament.

According to sources, the proposed amendment ensures that if a retiree’s primary pension is already subject to the EAS, the additional pension increase from continued employment will not raise the base for EAS calculation. Instead, the EAS will remain based on the original pension amount before the adjustment.

This measure prevents retirees from being pushed into a higher contribution bracket due to their increased pension. Previously, even a minor pension increase could result in a disproportionately higher EAS deduction, sometimes leading to an overall reduction rather than an increase in take-home pension amounts.

A legislative adjustment passed in November sought to resolve this issue by linking EAS brackets to overall pension adjustments. However, it did not account for retirees who continued working, potentially deterring them from staying in the labor market due to increased deductions.

EFKA has already started recalculating pensions for those who retired after its establishment and continued working. In the coming months, the process will extend to retirees from before March 2016. Approximately 200,000 retirees have declared continued employment on EFKA’s platform, with about half expected to see pension increases. The remaining individuals, primarily farmers earning under €10,000 annually, are exempt from additional contributions and thus will not receive adjustments.

To qualify for the pension increase, retirees must submit a work cessation declaration via EFKA’s online platform, followed by a request to include their additional insured work period in their pension calculation. The increase is calculated at a replacement rate of 0.77% per year of employment, based on their salary.

Retirees who worked post-May 2016, as well as those employed before that date but who had suspended their pensions, can apply for the adjustment. This ensures their extended employment period is factored into their final pension amount.

The government’s move aims to correct past inconsistencies in pension deductions and provide fairer compensation to working retirees, aligning pension policies with labor market realities.

Read more @ekathimerini