A “breath of fresh air” for more than 1.8 million debtors who are at risk of wage, pension, and bank deposit seizures comes with the increase of the protected bank account limit from €1,250 to €1,600. This measure strengthens protection for citizens with outstanding debts to the Tax Authority and social security funds, at a time when the total amount of overdue debts exceeds €160 billion.
The approximately 28% increase in the limit means that practically a larger portion of monthly deposited funds will remain available to cover basic needs such as rent, utilities, food, and payment plan installments. At the same time, it’s estimated that the phenomenon of “frozen” accounts will be reduced, which in many cases led debtors to financial suffocation. The protected account is declared through AADE and concerns one unique bank account per taxpayer. Until today, amounts up to €1,250 per month were protected, however the new regulation adjusts the limit to current economic conditions and increased cost of living.
Competent sources estimate that the increase in the protected amount can also function as an incentive to maintain debt arrangements, strengthening payment compliance. After all, as long as arrangements remain active, debtors enjoy significant benefits such as suspension of criminal prosecutions, freezing of forced collection measures, and the ability to issue tax clearance certificates that are prerequisites for property transfers or transactions with the State, such as receiving payments.
Meanwhile, the new omnibus bill from the Ministry of National Economy and Finance also promotes faster “unblocking” of restricted accounts. According to the relevant provision, seizure can be lifted when 25% of the debt has been paid off and the taxpayer has arranged their remaining obligations to the tax authority.
What debtors need to know about the new bank account exemption limits
Debtors should be aware of the following:
1. Deposits in credit institutions in one and only individual or joint account are currently exempt from seizure up to the amount of €1,250 monthly for each natural person and in only one credit institution. After the bill containing the provision for increasing the protected limit is voted on, the amount will increase to €1,600. The measure applies provided an electronic declaration is submitted to the tax administration’s information system, notifying one unique account by the natural person.
2. In case there is an account with periodic crediting of wages, pensions, and insurance benefits, this account is declared exclusively and only as the protected account. This account must be declared as protected to both AADE and the bank for the protection to be valid.
3. In case of a joint account, the protected limit of €1,600 will apply to each of the co-beneficiaries, provided all co-beneficiaries have declared the account as protected. Otherwise, they risk seizure of amounts even below the protected limit, since the amount in the joint bank account belongs to the beneficiaries in equal shares. That is, if €1,000 pension is deposited in an account, for example, and the co-beneficiary of the same account is a debtor to the State and has not declared this specific account as protected, the bank can freeze €500, an amount below the protected limit.
4. In case the citizen receives pension or salary from multiple sources, the protected limit is calculated collectively on the total amount of income.
5. For compliant debtors who have entered arrangements and are paying their installments, the possibility of gradual increase of the protected limit is provided.
The exceptions
Excluded from bank account seizures are:
- Alimony amounts.
- Salaries, pensions, and all types of insurance benefits paid periodically, provided their monthly amount is less than €1,000. In cases where it exceeds this amount, seizure is permitted for debts to the State on 1/2 of the excess amount over €1,000 up to €1,500, as well as on the entire excess amount over €1,500. For example, if a debtor receives a monthly salary of €1,600, 100% of the amount above €1,500 (€100) can be seized monthly, plus 50% of the difference between €1,000 and €1,500 (another €250).
- 4/5 of daily wages, while seizure is permitted on 1/5 of these for debts to the State of these beneficiaries.
- 1/2 of lump-sum benefits paid by any insurance organization upon departure from service or profession, while seizure is permitted on 1/2 of these for debts to the State of these beneficiaries.
Furthermore, the Tax Authority cannot seize a series of allowances and benefits such as:
- Minimum guaranteed income
- Lump-sum financial assistance to low-income pensioners.
- Unemployment benefit
- Education or vocational training allowance paid to unemployed persons
- Heating allowance
- Child support for minor children
- Welfare allowances
- Rent subsidy
- Lottery monetary prizes.
- Benefits granted to insured persons by ELGA.
- Financial assistance given by municipal council decision in exceptional cases.
- Any allowance explicitly characterized as “exempt from seizure” by the legislation providing for it.
