The 4 popular measures up the government’s sleeve

The government “opened the cycle” of the readjustment of salaries and pensions with 3+1 popular measures, simultaneously heralding a “pre-election cycle“, although as the Prime Minister said, that elections will take place at the end of the four-year period.

The increases in pensions, wages and benefits are the main provisions of the government program for 2023 and are already a pre-election confrontation issue. This informal pre-election period kicked off with the debate in Parliament on social policy.

Pension raises after 13 years

The restoration of pension raises, after almost 13 years of cuts and “freezes”, was announced by Prime Minister K. Mitsotakis from the floor of Parliament, together with the abolition of the solidarity contribution for pensioners and civil servants.

At the same time, it is considered certain that the process of readjusting (increasing) the minimum wage will start again from the beginning of next year, while special reference was made by the PM to the recent double increase of the minimum wage, noting that our country is ninth among European Union countries.

However, the Prime Minister was mum on the subject of retroactive pensions, after the latest decision of the Council of State which gives the right to claim such retroactive benefits only to those who have appealed to the Court. Mr. Mitsotakis made no mention, despite the fact that there was “harsh criticism” from political leaders.

However, he left open the possibility of giving “some money” to the rest of the pensioners – who have not appealed to the Court – in an interview one day after the debate in Parliament.

The measures that are certain and the Thessaloniki International Fair

Therefore, announcements for a new increase in the minimum wage at the beginning of 2023, for increases in pensions and for the abolition of the solidarity contribution in pensions and in the public sector are now a fact, while the issue of retroactive pay for all pensioners will be clarified at the inauguration of International Exhibition of Thessaloniki. The TIF is the customary venue for party leaders to make statements on platforms and planned programming.

Minimum wage at 751 euros

Recently, Mr. Mitsotakis addressing tourism entrepreneurs urged them to offer “better wages and working conditions” in order to find the right staff. The new increase in the minimum wage at the beginning of 2023 has also been announced by the Minister of Labor K. Hatzidakis, noting that this is provided for in the relevant law.

The president of General Confederation of Workers – G. Panagopoulos recently stated that “the government is flirting with the idea of ​​going to elections having restored minimum wages to pre-crisis levels”. By re-starting the process of increasing the minimum wage at the beginning of 2023, it becomes possible to restore the minimum to 751 euros, i.e. to pre- crisis levels. And this is because wages are already at 713 euros, i.e. a sum that can be covered with the next increase.

Increases of more than 5% in pensions

At the beginning of the year there is provision for increases in pensions as well, thus closing a “contraction cycle” of at least thirteen years. From January 1, there will be increases in the total amount of the pension, equal to 50% of the change in GDP plus 50% of the change in the Consumer Price Index. This means that if GDP increases by 4% and CPI increases by 6%, then the increase in pensions will be 5% (2% +3%). Beneficiaries of the increase will be all 2.6 million pensioners, however some will not see this increase in the final amount of their pension. Pension increases will be received by those who do not have a “personal difference”. The rest will offset their “personal difference” with the amount of the increase.

The solidarity levy

The abolition of the solidarity levy for civil servants and pensioners effectively ends a 12-year emergency memorandum measure imposed on incomes over 12,000 euros. The relief for civil servants and pensioners will automatically be reflected in their monthly wages in January 2023, as the solidarity levy is withheld from wages and pensions alongside income tax. The special solidarity contribution is calculated with a progressive scale of factors, from 2.2% up to 10%, to those taxpayers who have a total annual income greater than 12,000 euros. In other words, pensioners and public sector workers with monthly salaries of more than 1,000 euros will benefit.

A window for retroactive pensions to all

Speaking on the SKAI FM radio station, the Prime Minister left a window for the extension of retroactive benefits – or part of them – to all pensioners. Mr. Mitsotakis did not rule out giving all pensioners a part of the retroactive payments in installments. In fact, when pressed, he characteristically noted: “Leave something for us to say in Thessaloniki”, implying the opening of the International Exhibition. According to the Supreme Court’s decision, only those who had filed lawsuits until July 2020 are entitled to retroactive benefits. Mr. Mitsotakis left open the possibility of a “political solution”, whereby part of the retroactive benefits will be given in installments to everyone. In this way, the image of “two-tier retirees” will be avoided, with regard to the retroactive extra pay and leave allowances and cuts in supplementary pensions, for the eleven months from June 2015 to May 2016.