About 1 million pensioners will see a reduction ranging from 34 to 325 euros in their monthly cheques when the new tax withholding system is completed in August.

As of next month, 1,146,089 pensioners out of a total of 2.7 million will see a change in their monthly cheques. According to Labour ministry officials, the changes are in accounting methods alone and will not increase the final tax amount.

The system, based on a Finance ministry law (4172/2013) has already been applied to those receiving a single pension and it calls for 1/12 of the annual taxes for all income to be withheld by social security funds.

The monthly withholdings are adjusted so that so that a pensioner does not owe any taxes after the annual income tax statement has been processed.

From now on, the only contact between individuals whose sole income is a pension and the tax authorities will be the online submission of their annual tax statement.