Govt’s draft law includes major pension cuts and increase in social security contributions

Pensions over 750 euros will get a 15% reduction

The government “sacrifices” the young pensioners in the name of its “red lines”, even though it has committed to protect the pensions paid. For the new pensions over 750 euros – and not over 1000 as the government had previously promised- a 15% reduction rate will be applied due to low replacement rates. For pensions over 2,000 euros, the reduction rate will reach 30-35%.

The replacement rate is scalable and from 0 to 15 years a 0,80% rate per year will be applied, while from 39 to 42 years or more up to 2%.

At best the replacement rate for 40 years fully insured, adding also the national pension, will reach 60% of pensionable salary.

According to the draft law, social security contributions will be proportional to the income and aligned with the contributions of IKA. This would mean tripling the contributions of farmers, increasing the contributions for doctors and lawyers, but reducing the contributions of self-employed  who will receive also a reduced pension.