Greece’s government economic team is reportedly considering scenarios for a significant child benefit (A21) increase of 30%, which would translate into additional annual payments ranging from €250 to over €1,000, without any changes to income eligibility criteria. The proposal is backed by an OECD study indicating that such a measure would deliver multiple benefits in supporting families with children and low incomes.
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Child benefit: The 30% increase scenario on the table
The study concludes that increasing the child benefit is the most effective solution when the goal is poverty reduction, as it directs the largest share of resources toward the lowest-income households.
According to the analysis, families in the lowest income decile show the greatest percentage increase in their disposable income. Conversely, the higher a household’s income, the smaller the benefit from the intervention. This approach — according to the OECD — strengthens the redistributive character of the social benefit, channeling more resources to families facing greater financial hardship.
The scenario is on the table as one of the measures that could be announced at the Thessaloniki International Fair (TIF) as part of efforts to address the declining birth rate and broader demographic challenges. However, a final decision has not yet been made, as the government must weigh the additional fiscal cost of €200 million that would result from the 30% benefit increase (raising total spending from €700 million to €900 million), as well as the potential impact the increase could have on the total number of recipients currently receiving the benefit.
The reduction in the current number of recipients would arise, according to the OECD study, from the fact that in certain cases involving Minimum Guaranteed Income beneficiaries, the higher financial support from the child benefit would increase declared income, potentially leading to a reduction or even complete loss of that specific benefit.
Indicatively, the OECD estimates that, due to this interaction, the net cost to the state would be approximately 5% lower than the initially calculated gross cost. One of the key features of the scenario is that no changes are planned to the way the benefit is calculated. Eligible recipients will continue to be determined based on: equivalent family income, the number of dependent children, and the applicable income thresholds.
| NUMBER OF CHILDREN | CURRENT AMOUNT | WITH 30% INCREASE | ANNUAL BENEFIT |
| 1 child | €70 (income up to €10,500) | €91 | €252 |
| 2 children | €140 (income up to €12,000) | €182 | €504 |
| 3 children | €280 (income up to €13,500) | €364 | €1,008 |
Originally published in Apogevmatini
