In addition to strengthening middle class incomes and alleviating the housing problem, the “umbrella” of TIF will include measures to help pensioners, most importantly the abolition of the personal differential, a measure that did not get the green light last year.

Its abolition, rather than its cut, seems to be gaining ground as a radical and emblematic measure that will generate positive reactions against the increase of the €250 allowance that is still on the table.

It should be noted that anyway it has been announced that the 250 euro allowance to 1.1 million pensioners and vulnerable citizens will be made permanent starting from November 2025. What is certain is that one of the two measures will go ahead as the resources are not inexhaustible.

The abolition of the personal differential currently retained by some 670,000 pensioners will open the door to the annual increases they are currently deprived of, taking in their place the personal differential allowance of 100-200 euros last year.

For example: an old age pensioner from IKA with 25 to 27 years of insurance receives a total pension of 883 euros with a personal difference balance of 42 euros. If it is decided to zero the personal difference, the pensioner will receive an increase of 21 euros in 2026 (assuming that the increase will be around 2.4%) and the pension will be 904 euros.

What is currently in force

Of course with the accounting increase each year due to the annual increases, these retirees were saving the personal difference paving the way for the increases. It is estimated that about 90,000 retirees each year become eligible for the increases. And according to projections made by the relevant departments of EFKA, if the same rate of pension increases continues, another 240,000-250,000 pensioners are likely to have their personal difference reset to zero in the next two years.

However many hundreds of thousands more who maintain a large personal difference will take 5 to 10 years to offset the personal difference with the annual accounting increases and put themselves under the umbrella of real increases in pocket .

If the full repeal of the differential is implemented, none of this would apply and the 2026 raises would be given automatically, probably at the end of this year.

The cost of the complete abolition of the personal differential is 160 million euros a year, while a 50% haircut brings the cost down to 80 to 90 million euros, and if the personal differential allowance is paid the total cost will be less than the 84 million it was last year, as each year the number of allowance recipients who offset the personal differential and start receiving the annual increases for the first time is reduced.

The personal difference allowance for 2024 was granted to pensioners who have a personal difference of more than €10 and receive a pension or pensions of up to €1,600 (total net amount before tax). The amount of the allowance is 200 euros for those receiving a main pension of up to 700 euros, 150 euros for those receiving between 700.01 and 1,100 euros, and 100 euros for those receiving between 1,100.01 and 1,600 euros.