In a sudden nationally televised address, Prime Minister Alexis Tsipras detailed his government’s plan to offer 1.4 billion euros in social welfare handouts to about 1.4 million low income taxpayers.
The so-called “social dividend” is over twice the amount given last year, when low income pensioners were given an extra month’s pension at Christmas.
Opposition critics say the handouts are the result of over-taxation by the government, and that a large chunk of the 1.4 billion involve the return of past illegal withholdings on pensions by the state, which the state is legally obliged to return.
Others saw the announcement as a diversion from the news about 200,000 citizens voting for the leader of a new party of the centre-left, which forms the core of Syriza’s electoral base.
The beneficiaries must meet income and property holding ceilings, with those who own real estate of a tax valuation of over 180,000 euros not qualifying.
Crunching the hand-out numbers
Single taxpayers with an annual income of up to 3,000 euros will receive a 450 euro stipend, between three and six thousand euros a 350 euro benefit, and between six and nine thousand euros a 250 euro benefit.
For married couples without children with an income of up to 4,500 euros the benefit will be 675 euros, 525 euros for incomes between 4,501 and 9,000 euros, and 375 for income between 9,0001 and 13,500 euros.
The benefits are greater for families with children, with those with two children receiving higher benefits than those with only one.
For single child families, those with incomes of up to 5,250 will receive 787.5 euros, between 5,251 and 10,500 euros income 612.5 euros, and between 10,501 and 15,750 it is 437.5 euros.
Married couples with two children are to be given 900 euros for income up to 6,000 euros, 700 euros for income between 6,001 and 12,000 euros, and 500 euros for income between 12,001 and 18,000 euros.
Creditors are on board with benefits
The final details of the amounts beneficiaries will receive, and eligibility criteria, will be enshrined in a bill to be tabled in parliament this week.
Greece’s creditors reportedly are positive about the disbursal of the benefits, as from the start they did not object to putting the matter on the table. The discussions are ongoing, but yesterday’s announcements are in line with the parameters discussed with the lenders.
Pensioners’ illegal withholdings returned
About 315 million euros will be returned to 2.65 million pensioners who had suffered illegal withholdings of healthcare contributions from their pensions between January 1 2010 and 30 June 2016. The government is legally obliged to return the funds, so that cannot be considered a hand out.
Hundreds of thousands of pensioners had illegal withholdings of between four and six percent of their pension for the state’s EOPPY health insurance fund. Hence, those with higher pensions will have larger amounts returned to them.
For a pension of 1,100 euros the return is 240 euros, for a 1,200 euro pension it is 370 euros, and 450 euros for pensions of 1,300 euros.
Those amounts will be returned to beneficiaries along with their December monthly pension, with payment at the end of this month.
The excess surplus in the state budget is expected to reach 2.2 billion euros this year, or around three percent of GDP, substantially greater than the 2.2 percent that the government had agreed on with creditors.