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Greek Pensioners Could Lose 50% of Lump Sum – Retroactively

Greek pensioners who have had money deducted from their salary for years for a lump sum payment to be awarded when they retire would lose half what they are owed under one government scheme to reduce costs.
That means, for example, that a teacher who was due $50,000 after 30 years of work will receive only $25,000 – but not for years after retiring, and maybe in Greek bonds, which have little value, and not cash. People who have already retired from state enterprises received their full lump sum and immediate monthly payments while civil servants will have to wait up to 14 months when they retire before receiving a monthly benefit – and are not allowed to work in the meantime.
The tough measures, again directed at workers, pensioners and the poor while tax evaders owing the country $70 billion have largely escaped paying or penalties, are being considered by the coalition government led by Prime Minister Antonis Samaras, who has to find $14.16 billion in cuts demanded by the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) which is withholding a second bailout, this one for $173 billion, until the government administers reforms and more austerity measures as well. Greece is surviving on a first series of $152 billion in rescue loans and the last installment, of $38.8 billion, is due next month.
A government task force looking at ways to make the cuts acknowledged that, “There is much work to be done in battling tax evasion,” and without those revenues the government will have to take it out of people who do pay. The newspaper Proto Thema reported that other measures under consideration include:
– Lowering the income threshold for eligibility for welfare, to perhaps 25,000 euros ($30,800) annually, which would exclude half those who now receive benefits and leave them with no income
– Cutting retirement lump sums by 50 percent, even for those who have already retired, making the cuts retroactive. Those who have already received their full amount may have to return some of it as yet another tax, on top of doubled income and property taxes. The government said that’s because many beneficiaries are getting from 2-83% more in payments than was deducted from their salaries over the years, although it was not revealed if that included accrued interest over the years.
– A benefits plan under which the annual income used as a criterion for issuing payments will also include presumptive income, which means most pensioners will lose auxiliary pensions completely, although those over 65 may be exempt in some cases
– Putting civil servants charged with corruption in a pool of as much as 45,000 layoffs being considered. Under the Constitution, it is virtually impossible to fire a public worker, even for wrongdoing and even some of those found to have broken the law have returned to work
The final proposals are expected to be ready by Aug. 20 as Samaras’ government will then have to make its case to the Troika that the government is meeting the demands for reforms so that loans will continue. Without the monies, Greece will not be able to pay its workers an pensioners and has long stopped paying most of its bills.
(Sources: Proto Thema, Capital)

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