July 23, 2024

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When Adonis felt jealous of Catrogalus…

When Adonis felt jealous of Catrogalus…

Written by Kostas Stupas

When Adonis felt jealous of Catrogalus…

Eliminating the 30% pension cut for those who continue to work beyond retirement age, which the government is working on, is in the right direction.

This is because the largest part of the pension arises from the compensatory part of it that relates to the contributions paid by the employee…

That is, the pensioner who reaches retirement age receives a unified national pension for everyone, derived from government revenues, and a compensatory pension that is different for everyone and derived from pension contributions…

Therefore, withholding 30% of the pension salary is also related to imposing an additional tax on insurance contributions, when they are attributed to the pensioner… and this is unfair.

It is true that the government plans to reduce the 30% reduction in pensions for those who continue to work…

But from what I’m reading, it seems that the government is planning to reduce the income of retirees who will continue to work, which will appear as an increase in pensions…

To those who have lived through Mr. Katrougalos’ constitutional reform over the past decade, this seems like a classic “Syrian” tactic… that is, the cuts appear as increases.

So I read in the report: “At the same time, the Ministry of Labor and Social Security is in the final stage of drafting the legislative text on the abolition of the 30% deduction in the pension of working pensioners, which will then be sent for approval to the Audit Conference.

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The aim is to reduce the burden on retirees who are working or want to work.

According to the information, under the proposed arrangement, working retirees are expected to receive their full pensions and withhold them A very small percentage of their work wages…”

See: Retirement benefits for employees with parallel jobs with the new labor bill

It is usual in politics, as in the fine details of insurance and banking contracts, that the devil hides in the details…

What does it mean do we reduce or eliminate the 30% reduction in pensions for those who continue to work and tax their salaries on top of that?

Whoever collects a pension of 1,000 euros per month and if he continues to work receives a salary of 3,000 euros, does he gain or lose from the list?

The country’s political leadership (inside and outside the coalition) should realize that by continuing to work beyond retirement age, not only the retired worker will benefit, but also the economy and public revenues as a whole.

This is because in the Greek economy, as in all economies of the developed world, due to demographic aging, the number of retirees is increasing and the number of workers is decreasing. This threatens in the coming years to blow up the private and public insurance systems of many countries, even those that are in a better fate than the Greeks.

It is clear in recent years, both in Greece and elsewhere, that there is a labor shortage. In Greece, this phenomenon is more severe as wages are lower due to the lower competitiveness of the economy…

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This leads to highly qualified young people traveling abroad, which exacerbates the problem.

A shortage of workers means that demand for labor (or brains) exceeds supply. This will lead to an increase in wages that exceeds the competitiveness of the economy.

Increasing labor costs beyond what the competitiveness of the economy allows will put many companies out of business, which will compound the problem…

High labor costs are also one of the underlying structural factors for higher inflation. High inflation calls for higher interest rates, and this is an additional factor that favors stagnation over growth…

Based on demographic data and its dynamics, the only logical solution to preserve the pension system and help the economy is to extend working life and bring in immigrants. (The problems created by illegal immigration for immigrants are another matter…).

Since a horizontal increase in the retirement limit may have been revolutionary, incentives for those who can and want to continue working are the best solution…

It is also true that there are tasks that older people cannot do. However, the ones that allow this are a relief valve for the pressure that the system will receive…

Therefore, the additional “tax” on the salaries of those who continue to work after retirement is wrong, as is the wrong incentive and 30% pension reduction in effect today.

A 30% reduction is akin to penalizing those who wish to continue contributing to economic activity and government revenues. As well as additional taxes.

If someone stops working, they also stop paying taxes. It doesn’t make sense to pay insurance contributions after retirement anyway…

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So let’s not correct a mistake with a bigger mistake.

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