Cuts in social welfare benefits – including in those for families with three or more children, in stipends for university students, and in heating fuel subsidies – the recalculation of pensions, expediting the issuance of main and supplementary pensions, and the one-off retirement benefit (which employees pay into throughout their career), were on the agenda for talks between the government and Greece’s creditors this morning.
In their meeting this afternoon, the government will discuss with creditors its obligations regarding privatisation, the energy market, and the transport sector.
Labour Minister Effie Achtsioglou and Alternate Social Welfare Minister Theano Fotiou have undertaken the thankless task of restructuring the country’s benefits framework. The plan, which must be finalised by spring, 2018, and implemented in June, is high on the creditors’ agenda.
Pensions, benefits targeted
One of the targets to be discussed is the downward recalculation of pensions based on a law drafted by former labour minister Yorgos Katrougalos. Most of the pension cuts involved will come into force in 2019, most likely after the next general elections.
Cuts in family stipends, and social welfare benefits in general, remain a thorny issue in the talks, as they are obviously hugely unpopular.
The government has requested a 160 million euro increase in funds earmarked for family benefits, so as to assist needy families with only one or two children. The income ceiling for beneficiaries remains a bone of contention.
Also on the agenda is the government’s obligation to proceed with a radical restructuring of benefits for the handicapped. What remains to be decided is the timetable, as creditors want the reforms to be in place by next summer, when Greece is due to complete the current bailout memorandum and return to the markets.
Redrawing the benefits map
The restructuring of the country’s benefits framework will take into account a World Bank report that involves the following parameters: making sure benefits effectively target specific social groups, the conditions that beneficiaries must meet, the fiscal impact of the benefits, and the institutional framework for benefits in general and individually.
Four separate ministries and local government are currently involved in the calculation and payment of benefits.