With the social security system in Greece changing its structure and most entities now merging into one, practical issues have arisen that concern the insured individuals. Some stemmed from the ambiguities of the law, while others are due to the transitional period during which problems decades in the making had to be resolved in just a few months. In this text, we will look at some key topics that every insured individual should know in order to avoid being legally ‘trapped’ in situations from which it would take considerable time and money to extricate themselves.

1.Who is currently insured under EFKA?

After the mergers of various social security agencies and the incorporation of most of them into EFKA (National Social Security Agency, now e-EFKA), the issue arose regarding which agency different insured individuals belong to. Thus, the law stipulates that, primarily, employees are insured under EFKA, meaning those who are presumed to provide dependent work for an employer. In fact, there does not even need to be a valid employment contract between the employer and the employee; it is sufficient that the work is practically provided by the second party to the first.

To facilitate the salaried worker wishing to be insured under EFKA, the law establishes a presumption in their favor. It specifies that in cases where it is difficult to ascertain whether the worker is an employee or self-employed/independent professional, the latter will be considered an employee, provided that they indeed perform dependent work for an employer in exchange for compensation, i.e., a salary paid at certain intervals.

Of course, the employer can prove that the worker is not an employee in their business but is instead self-employed, etc., in order to avoid the burden of paying the social security contribution. However, it should be noted that for the presumption of the law to apply and for the worker to be considered an employee, they must primarily provide their work to the employer and not have any parallel employment, merely having one of those positions with the respective employer.

2.Do the same rules apply to part-time employment?

For this specific form of work provision, namely the agreement that the worker will work reduced hours compared to what is currently established by law, the same rules we mentioned above regarding the social security coverage of the worker generally apply. However, for this to happen, the employer and the employee must have agreed in writing that the latter will be employed under part-time conditions, and this agreement must have been communicated to the Labor Inspectorate within 8 days from when the document was drawn up. Otherwise, the competent authorities of EFKA may consider that the employee is employed on a full-time basis, leading to differences in the way they are insured.

Those working part-time are primarily insured independently for each (full) day of work, regardless of the fact that they work fewer hours daily than an employee in full-time employment. Moreover, if they work on a daily basis (i.e., 5 days a week), they will receive social security benefits for 25 days of work per month, just like full-time employees. It is important to know that the social security benefits for employees here are calculated based on the earnings they actually receive.

As we can understand from the above, the insurance of a part-time employee is quite challenging in practice, as they ‘struggle’ to meet the law’s requirements for receiving old-age pension or, if they manage to do so, they receive a reduced pension due to their lower earnings. To this, we must add the common practice of many businesses not insuring their part-time staff for 25 days a month but for 20 or 21 days, even though the employees may have indeed worked the same number of days as those in full-time employment, which deprives the former of many social security benefits.

3.Can I buy back fictitious insurance periods?

To address certain gaps created by the implementation of social security legislation and to ensure that insured individuals do not have ‘gaps’ in their periods of insurance, which could prevent them from establishing their right to a pension in the future, the law has provided a significant facilitation for them, which many are unaware of. Thus, insured individuals have the option, if they wish, to buy back fictitious insurance periods in order to maintain a continuous insurance record that will lead to higher pensions. Obviously, those who have already established a pension entitlement before the law’s implementation cannot buy back fictitious periods.

To purchase fictitious insurance periods, the insured must submit the relevant application and choose one of the categories we will mention below. If their application is accepted, they are required to pay the corresponding contribution owed by employees in the relevant sector to EFKA every month. It is understood that if the insured wishes to be insured under two categories of professions, namely as an employee and simultaneously as a self-employed professional, they must pay two contributions, one for each profession, calculated based on the earnings specified by law for those professions.

Examples of fictitious insurance periods include time away from work due to pregnancy, the duration of military service, time spent studying, the duration of educational leave taken by teachers, etc., as well as the time during which a business is closed due to a strike. The insured also has the option to pay the amount for fictitious insurance in a lump sum to avoid monthly installment payments for each month of insurance. In this case, they will receive a better buyback amount, which is reduced compared to what they would owe if they chose to pay in installments.

4.What are the current conditions for eligibility for disability pension?

In order for an insured individual to receive a disability pension today, the law requires certain conditions to be cumulatively met—all together. Of course, the type of disability of the insured is also important, as it determines the amount of the pension. Specifically, the following conditions must be met:

• The insured must suffer from a health impairment or condition that prevents them from performing the profession they were engaged in until the deterioration of their health.
• The insured must not have caused the impairment to their health intentionally in order to obtain the disability pension. This fact must be proven by a relevant judicial decision issued.
• The disability of the insured (distinguished as partial/regular/severe) must be certified by the competent KEPA committee, which documents whether the disability (does not) allow the insured to work anymore.
• If the insured disagrees with the committee’s findings regarding their disability and its percentage, they can appeal to a secondary committee to contest the initial decision and seek a disability pension under better terms.
• The disability must have lasted for a minimum period; for severe disability, the minimum duration is 1 year, while for partial disability, the duration is set at 6 months.
• The insured must be unable to work in a profession that matches their own skills/abilities, and not just any profession in general. Therefore, their professional history up to the time of their disability must also be examined.
• The insured must have completed a minimum period of insurance, specifically 1,500 days of insurance, with at least the last 600 days occurring within the last 5 years before their disability.
• Alternatively, they may have met the conditions for receiving an old-age pension, as we will see below, or they must have completed at least 300 days of insurance and not exceeded the age of 21.

5.Can I receive a temporary pension?What amount will it be?

For those interested in receiving a temporary pension—an amount of the pension monthly before their retirement application is accepted and the amount is finalized—the law provides that the insured can receive 80% of the pension amount they will receive monthly once their application is accepted. Obviously, if the insured is going to receive a reduced pension, the amount of the temporary pension will be calculated accordingly (80% of the reduced pension amount).

The temporary pension begins to be paid to the insured from the first day of the month following the submission of the retirement application and ceases on the last day of the month before a decision is made regarding the insured’s pension. The amounts that the insured will receive as a temporary pension are offset against those they will later receive due to the pension that will be paid by EFKA. If the insured’s pension application is ultimately rejected while they have been receiving amounts due to the temporary pension granted to them for months, EFKA has the option to even seek the return of the amounts the insured has received during that time through legal means.

The above also applies when it comes to survivor’s pension, which is transferred to the surviving spouse and their children; they will also receive 80% of the pension as a temporary pension amount, which will be distributed among them as EFKA stipulates in its decisions. It should be noted that the pension amounts now paid into the bank accounts of the insured are exempt from seizure but only up to an amount of €1,250 monthly. However, for the exemption to apply to these specific amounts and to protect the insured from seizure and eventual loss of the amount, they must submit a declaration to their bank that the amount contains pension benefits for themselves/their family and is therefore considered exempt from seizure.

6.How can I obtain the survivor’s pension of my spouse?

In order to address a critical issue that concerns many families in Greece today, the legislator has changed the requirements for the transfer of a survivor’s pension to the spouse of the deceased, who had already established the right to a pension at the time of their death. Specifically, for the pension to be transferred, the law requires:

• There must have been a legal marriage between the two spouses—meaning the marriage was not dissolved by divorce while both spouses were alive. The law also considers cohabitation agreements, regardless of whether the marriage was religious or civil.
• The marriage must have lasted at least 3 years, meaning that the death of the spouse must have occurred after this specific time period.
• The deceased insured person must have met the requirements to receive an old-age pension, having been insured for at least 4,500 days of work.
• Alternatively, the deceased may have been insured for at least 1,500 days of work, of which at least 300 days were completed in the last 5 years prior to their death.
• The pension that the surviving spouse will receive cannot be less than the national pension, which is currently set at €384.
• For the children of the deceased to receive a portion of the pension, they must be unmarried and under 24 years of age.
• Alternatively, if the children of the deceased are unmarried and unable to work due to disability, they may receive the pension of the deceased, provided that their inability to work occurred before they reached the age of 24.
• If, after 3 years from the death of the spouse, the surviving spouse is employed or receives a pension from another insurance fund, then the survivor’s pension transferred to them will be reduced to 50% of the initially established amount.
• Furthermore, if the surviving spouse remarries or enters into a cohabitation agreement, the survivor’s pension will cease once the EFKA is informed of this fact.

7.What is the insurance clearance certificate?Why is it important?

The term “insurance clearance certificate” refers to the document that certifies that the employer does not owe insurance contributions for the employees they employ in their business. The same document can certify that the employer does owe insurance contributions to their employees but has arranged to pay them in installments. However, in the second case, the insurance clearance certificate is valid for 2 months, while if the debts have been paid, the certificate is valid for 6 months.

The insurance clearance certificate is quite critical as it is required for most transactions that an average person encounters in their daily life. A classic example is the transfer of property, where the law allows the transfer even if there are unresolved insurance debt issues, but stipulates that a portion of the transaction amount will be withheld to be used by the EFKA for the repayment of the owed contributions. Additionally, an insurance clearance certificate is also required for the transfer of motor vehicles and for the participation of private contractors in public tenders.

To obtain the insurance clearance certificate, the interested party must have settled their insurance contributions not only to the EFKA but also to other insurance organizations, such as the ETEAEP, which was previously known. At the same time, if it is an employer, the latter must have submitted an Analytical Periodic Declaration for the previous month of their business operations—this is a document that outlines the working hours of their employees and the insurance contributions that have been paid in detail for each day of employment.

8.I participate with others in a company.What applies to insurance contributions?

The answer to this specific question depends on the type of company in which the partners are involved. If it is a personal company (such as a general or limited partnership), the partners are liable with their assets for the payment of insurance contributions, even if these are owed by the company, for example, to its staff and employees. Specifically, in the case of general partners, they are jointly and severally liable with their personal assets for any debts of the company, so the EFKA can directly pursue them for the owed contributions.

In contrast, if the company is a capital company (such as a public limited company or limited liability company), the partners typically do not have liability for the debts of the company, and thus not for the payment of insurance contributions on behalf of the company. However, it is not excluded that a partner who holds a single-member capital company may use it abusively to evade responsibility for personal debts and other obligations, and thus to avoid paying contributions. In this case, they may be liable with their personal assets if it is proven that the debts were created by them and that the company is merely being used as a cover to evade responsibility due to non-payments.

Great care is needed when someone becomes a partner in a general partnership. According to the law, they will be responsible for the company’s debts that existed before their entry into it, including the insurance contributions that had not been paid by the company. It should also be noted that in the event of the partner’s death, their heirs take their place, provided they accept the inheritance—the heirs themselves will be liable for the payment of contributions owed by the deceased as a general partner. Therefore, careful consideration is needed in such cases where inheritances may include “hidden debts.”

9.I am/were insured with multiple funds.Which fund will I receive my pension from?

With the social security system evolving in Greece, many individuals were insured for a long time with 2 or more funds, raising questions about the status of their insurance. For this reason, the law currently provides the following:

• Since there is now (primarily) one insurance fund, most insured individuals are only covered by this fund, and if they practice multiple professions, they pay separate contributions to the EFKA for each one.
• If they had paid contributions to multiple funds, those contributions are not considered lost—they will be taken into account to provide the insured individual with a higher pension amount due to the payment of more contributions than others.
• If the insured had contributed to 2 insurance funds before the implementation of the law for the EFKA (i.e., until December 31, 2016), they could choose to receive 2 separate pensions, one from each fund to which they were insured.
• However, after the implementation of the EFKA law, those who were simultaneously insured with multiple funds are considered to be insured with one fund, the EFKA, and therefore their insurance periods are not counted twice.
• The insured individual applying for retirement must be informed by the relevant authorities of the EFKA that they have been insured with at least 2 funds and that they retain the right to choose the fund.
• This notification to the insured is made so that they can either choose to receive 2 separate pensions as mentioned or receive a single pension, increased by the insurance period they had accrued in the other fund until their inclusion in the EFKA.

10. Am I obligated to pay backdated insurance contributions that I was unaware of for a long time?

Regarding the payment of contributions by the insured, the law has established a general rule according to which, if contributions are imposed after a long time on the insured individual, which they justifiably did not know about, they can avoid paying them. However, it must be established that the insured believed they were not obligated to pay contributions to the EFKA (for example, if they had been receiving an insurance clearance certificate for a long time, or their Individual Insurance Account did not show any overdue debts, etc.).

In other words, it is not sufficient that the relevant authorities of the EFKA delayed the collection of the contributions or even their assessment against the insured; it is required that the latter believed for a long time that there were no debts against them. A critical factor is also the financial burden that the retroactive imposition of contributions will have on the insured, especially if the latter is an employer and runs a business—if the imposition of contributions could financially destroy the business, this would provide another reason for the insured to be exempt from paying the contributions.

It is understood that employees will not face repercussions in their insurance due to the employer’s behavior of not paying their contributions for a long time. In this case, the employer must continue to pay the contributions for their employees, as it is very likely to almost certain that they were aware of their existence. On the other hand, if the employees were colluding with the employer so that the latter would not pay contributions on their behalf to avoid deductions from their salaries, then the employees, in their complaint to the EFKA, cannot demand the payment of contributions from the employer since they were aware of the actual situation that had developed for a long time.

Next to the client and his needs.

Athina Kontogianni-Lawyer

The above does not constitute legal advice, and no responsibility is assumed for it. For more information, please contact us.