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Economy

Wave of Pension Applications Swamp Overwhelmed Greek System

ATHENS – Greece's New Democracy government, which said retroactive pension payments ordered by the country's highest administrative court would begin in September, is also being hit with a deluge of applications for new pensions.

The backlog could hit more than 300,000, said Kathimerini, and return the country to when beneficiaries had to wait two years or longer for their first check and were barred under law from working during that time.

There was a big jump in people filing in January and February, just before the COVID-19 pandemic, and the new wave will severely test a social security system already under water and with the government planning to reduce how much businesses pay into pensions as a break during the pandemic.

Many of the applications are coming from teachers eager to get out as schools are set to reopen with restrictive health measures including wearing masks in classrooms and pushing desks far apart to help prevent the spread of the virus.

The government had been paying out partial pensions and speeding the process for payments to begin but that looks to be set back by the avalanche of applications that saw more than 20,000 filed just in July, the paper said.

There were 16,000 approvals, adding another 4,000 to the backlog, bringing the total undone to 147,000 pending for more than three months, a big jump from the same period in 2019, as the government promised European Union officials the lingering applications would be cleared by the end of 2021.

Meanwhile, the Court of Audit, Greece’s highest fiscal court, is expected to finally give the go-ahead in September for the repayment of some 1.4 billion euros ($1.65 billion) in pension cuts which courts found unconstitutional.

That goes back to pension cuts made in 2012 under a previous New Democracy-led coalition government, the slashes required under terms of a second bailout deal with international creditors.

Legislation has limited the reimbursement of pension cuts covering the period from June 2015, the date of the court’s decision, to May 2016, when new legislation was passed to bar suits from those affected.

That was during the rule of the Radical Left SYRIZA which promised to protect pensioners but then went after them in a way to prevent them from being able to get their money.

Three years later, the Council of State, Greece’s highest administrative court, established the cuts as unconstitutional. 

The reimbursement concerns only main pensions, not auxiliary pensions paid through sector- or even employer-specific funds that were invested, the total number of recipients expected to be around one million, although parliamentary approval is required on some issues.

With the economy undercut by COVID-19 and now new applications, the government is said to be considering pulling back plans to pay out the retroactive benefits all at once, the paper said, preferring to do it over two years.

All reimbursed pensioners are, by law, surrendering any claims to partial reimbursement of cuts to auxiliary pensions, also made in 2012, or two month holiday bonuses although those were found unconstitutional.

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