Retirees Returning to Work: New Regulatory Framework and Pension Supplements

According to recent data published by Capital (Greek financial news portal), nearly 300,000 retirees have returned to work. This development directly impacts ΕΦΚΑ (e-EFKA, Greece’s unified social security fund) and working retirees, as the recent abolition of pension reductions creates a new landscape, offering thousands of beneficiaries the opportunity for pension supplements.

The Landscape of Retiree Employment

The return of retirees to employment is described as both significant and permanent. A total of 298,600 retirees have declared to e-EFKA that they are working while receiving their pensions. Of these, 91,500 are employed as salaried workers, 72,100 are freelancers or self-employed, and 135,000 are farmers.

Who is Eligible for Supplements

By law, the 135,000 farmers are exempt from paying the special contributions required of working retirees and, consequently, are not entitled to the pension supplement provided to those who do pay. Therefore, the actual beneficiaries of the supplement amount to 163,600 retirees (salaried and self-employed). To date, 10,278 retirees are receiving their pensions with an increase, while an additional 3,827 are awaiting the processing of their applications.

Examples of Pension Increases

The supplement is determined by the years of employment and the level of contributions paid, and it can exceed €100 per month. For example, a salaried retiree with 5 years of work and average gross monthly earnings of €2,300 will receive a supplement of €89, an amount that increases to €106 for 6 years of work. Similarly, a self-employed individual with 2 years of work and an average monthly contribution of €211 is entitled to an extra €16, while at 5 years of work, the amount reaches €49.

Abolition of the Penalty and Fines

The catalyst for this mass return to work was Law 5078/2023, which abolished the 30% pension reduction penalty for working retirees. Conversely, undeclared work (labor not registered with Greek authorities) carries a heavy fine, equivalent to 12 months of primary and supplementary pensions.

The Four Categories of Working Retirees

The regulatory framework distinguishes between four categories of working retirees:

1. Those who began working before May 2016 (subject to penalties on pensions exceeding €1,000, without the right to a supplement unless the pension was suspended).
2. Those who began working after May 2016 (subject to a 60% pension reduction but with the right to a supplement).
3. Those employed from March 2020 (under Law 4670/2020, the penalty was reduced to 30%).
4. Those who started employment after December 2023 (under Law 5078/2023, the penalty was replaced by a special levy/non-contributory fee).

The e-EFKA supplements apply to all categories; however, priority is being given to older beneficiaries who faced multi-year delays in the calculation of their increases.