Record participation is being recorded by working pensioners in the Greek labor market, with one in two new retirees choosing to continue their professional activity. According to official data from EFKA, more than 230,000 working pensioners remain active in the labor market, taking advantage of the new favorable regulations that have been in effect since January 1, 2024.
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The new system offers working pensioners the opportunity to secure an average increase in their pension of up to 120 euros per month, without interrupting the payment of their pension. The only exception concerns public employees under 62 years of age.
New employment regime for working pensioners
From January 1, 2024, the new legislative framework introduces significant changes in the employment of pensioners. Working pensioners who undertake employment pay a special resource to EFKA amounting to 10% of their salary or an increase in the main pension contribution by 50% if they are self-employed.
Of the total 230,000 working pensioners, more than 110,000 establish the right to a pension increase, as noted by the newspaper “Ta Nea”. The rest are excluded due to special provisions of the law, such as farmers and those with agricultural income up to 10,000 euros annually, who enjoy complete exemption from contributions and special resources.
Basic requirements for pension increase
Working pensioners who wish to receive an increase in their pension must meet specific requirements:
- Declare their employment regularly on the EFKA electronic platform
- Pay their required contributions regularly
- Declare the final termination of their work on the same platform
- Submit an application for stamp counting at the relevant EFKA branch
The increase is calculated based on replacement rates corresponding to the time of additional employment of working pensioners, starting from the rate of 0.77% of earnings for the first year.
Employment options and financial implications
Working pensioners have two basic employment options. The first concerns employment as employees, where 10% is withheld from the salary. The second option is practicing a freelance profession or business, where insurance contributions are increased by 50%.
For self-employment, the minimum monthly contribution amount is 245 euros, with the 50% increase reaching 122.5 euros. The choice of salaried employment becomes more profitable when the salary exceeds 1,220 euros.
Tax obligations of working pensioners
Working pensioners face particular tax challenges, as they have two sources of income: pension and salary or income from freelance work. During tax settlement, the two amounts are added together, creating a significant burden paid in eight monthly installments from July to February.
A characteristic example is a working pensioner with monthly income of 1,000 euros from pension and an additional 1,000 euros from salary. This combination creates an obligation to pay an additional 2,677 euros with the Tax Office settlement, beyond the withholdings made during the year. Thus, the actual net income is approximately 1,650 euros monthly.
Protection from solidarity contribution
The new labor bill under consideration includes an important provision for working pensioners. When they are entitled to an increase in their pension due to work, the additional benefit will not lead to an increase in the rate of the Pensioners’ Solidarity Contribution.
The provision aims to “freeze” the EAS at the bracket it was in before the pension increase, thus avoiding a shift to a higher bracket that would reduce the benefit for working pensioners.
Expected increases by category
The increases that working pensioners will receive differ depending on the duration of work and the amount of their earnings. Low-wage working pensioners with 2 to 3 years of work are expected to see a small increase of around 16 to 25 euros monthly.
In contrast, high-wage working pensioners with 5 years of work are estimated to have an increase that can reach 70 euros, while in some cases the average increase can reach up to 120 euros monthly.
