Record Number of Greek Pensioners Continue Working, Benefiting from New Pension Rules

A record 254,724 Greek pensioners, representing 10% of the country’s 2.5 million retirees, have declared through the e-EFKA platform that they continue to work after retirement, a significant jump from just 30,000 a few years ago, according to recent data from Greece’s social security agency (EFKA).

This surge follows a government reform that replaced a punitive 60% pension cut for working pensioners, introduced under the 2016 Katrougalos law to discourage employment amid high unemployment, with a more lenient 10% special tax on monthly earnings. The policy shift, initiated by the Vroutsis law in 2020 (reducing the penalty to 30%) and finalized by the Georgiadis law (5078/2023), has proven highly successful, encouraging retirees to remain active in the workforce.

Government Highlights Benefits for Working Pensioners

Labour Minister Niki Kerameos recently emphasized the benefits of the new system, noting that working pensioners not only retain their current income but also qualify for future pension increases based on additional years worked and their earnings. “This reform supports pensioners who choose to stay active, rewarding their contributions with higher pensions in the future,” Kerameos stated.

Under the current system, working pensioners pay regular social security contributions in addition to the 10% employment tax. Upon ceasing work, they can apply for a pension increase of 0.77% for each year of employment, calculated based on contributions and replacement rates. For instance, a pensioner who works for seven years post-retirement could see their pension rise by 5.39% (0.77% x 7).

Streamlined Process via e-EFKA

EFKA has launched a dedicated online platform where retirees who stop working can submit applications to have their additional contributions counted toward a pension increase. The increase, proportional to the duration of post-retirement employment, takes effect from the first day of the month following the application. This applies to both main and supplementary pensions.

For pensioners employed before May 12, 2016, who continued working without interruption, the pension increase is calculated under older insurance laws, not the Katrougalos or Vroutsis frameworks. For those who paused and later resumed work after May 13, 2016, a mixed calculation applies, based on the respective legal provisions for each period.

Exclusions and Special Cases

Not all working pensioners are eligible for the pension increase. The law exempts certain groups, such as approximately 120,000 retired farmers who continue agricultural activities, from paying social security contributions. As a result, only about 135,000 of the 254,724 working pensioners qualify for the pension increase.

The government views the rising number of working pensioners as a positive trend, reflecting greater flexibility in the pension system and encouraging economic activity among retirees. For more information, pensioners can visit the e-EFKA platform or contact local EFKA offices.

(Source: In.gr)