Greek fiscal targets will not be met unless deep cuts are made to pensions, even those that are lower than 1,000 euros per month. Labor, Social Security and Social Solidarity Minister George Katrougalos made this dramatic finding during the social security appraisal underway with the assistance of the International Labor Organization (ILO) and technical experts of the Quartet of Greece’s creditors (European Commission, European Central Bank, European Stability Mechanism and International Monetary Fund).

Trying to avert further cuts to low pensions, the Labor Ministry is examining an earlier proposal for the reintroduction of income contributions while frantically seeking new contributions to make pension fund figures add up. Unfortunately, the fiscal gap cannot be covered by the lifting of the retirement age for some categories of insured people as this would bring 533 mln euros worth of funds by 2019.

A return to added social contributions from the workforce at 2012 levels is being considered. These contributions had been reduced by 1.1%, whereas from July 2014, worker contributions had been reduced by 2.9% and employee contributions by 1%, resulting in cuts to family funds and special unemployment benefits.

The return of the special contributions may be desirable as the reduction of these funds has cost the Social Security Organization (IKA) around 974 mln euros, widening the “black hole” in funds. Nonetheless, the idea of social contributions being brought back has already been rejected in the past by creditors that state that it burdens entrepreneurship.

At the moment the increase of the retirement age has affected 150,000 workers who did not solidify their retirement rights by August 28,2015. Particularly affected are mothers of children under 18 years who could have retired at 50 years of age with reduced pensions as well as large families who could have completed 25 years of employment before getting a pension at the age of 52 years.

CLICK HERE to read the full ministerial decision (In Greek)