Tsakloglos: From 1 April the 4th successive increase in the minimum wage to over 800 euros

‘ On 1 April 2024 , its 4th successive increase , which will now exceed 800 euros from 650 euros in 2019,” states the Deputy Minister of Labour and Social Security , in an interview with the APR-APM. As it estimates, the positive growth rates in recent years, combined with the dynamics of the country’s economy over the next few years, as recorded by international houses and organisations, make it possible to target a minimum wage at 950 euros and an average wage at 1,500 euros, by the end of the four years. Referring to the Fund for Auxiliary Capital Insurance (TEKA), Mr. Tsakloglou notes that the information campaign, implemented by the TEKA itself, seeks to highlight the benefits of the funding system to young people, who are also directly interested, as well as to workers who are able to join the new Fund. “With a central message “Invest today in yours tomorrow”, it highlights the value of saving as a key instrument for economic security in the future. Key features of the new Fund are highlighted and explained, such as the existence and ability to control the individual account of the insured person and the state guarantee provided, with a view to encouraging/mobilising young people to act for their future and to participate/enter the TCA, providing them with the necessary information and tools for a financially safe retirement,” the Deputy Minister of Labour notes. At the same time, it highlights the benefits that will result for the Greek economy, as it says, a significant part of the TEKA reserves will be directed towards investments in Greece, which will give growth to the economy, increase productivity, create more and better paid jobs and promote the living and well-being of citizens. In a question about how the implementation of the employment statement by retired workers is progressing, Mr. Tsakloglou points out that, so far, according to EPKA data, some 43,000 retired workers have been registered on the platform, at the same time that figures in the past did not exceed 35,000 per year. Among other things, the Deputy Labour Minister analyses the new provision of the Ministry of Labour that “unlocks” retirement for thousands of debtors of e-EFKA and adds that the necessary Joint Ministerial Decision is expected and, at the same time, the necessary adjustments are made to e-EFKA’s digital systems for the submission of the relevant applications, as well as the recovery of the necessary data, through interconnection with banking institutions. Mr Tsakloglou also refers to the stage at which the preparatory steps are being taken to implement a single insurance and benefits regulation for all the Funds included in the e-EFCA. In this context, it recalls that, last November, a working party was set up, “with a view to drawing up a conclusion in the direction of simplifying rules in a fiscal neutral manner. For all the former Funds, the conditions for entitlement to insurance for cash benefits, the duration of coverage, the amount of benefits, the range of beneficiaries, the award procedure and any other necessary issue were examined. The current situation has already been completed, the differences between Funds have been noted and the economic analysis of alternative scenarios of consolidation has been completed. At the moment, the working party is at the end of its work and is drafting the text of the conclusion, which will form the basis for our legislative interventions.” Finally, the Deputy Labour Minister complements that the special provision of maternity protection for free professionals, self-employed and rural mothers is a new regulation and therefore a platform was created from scratch to support this innovation. According to his assessment, the payment of benefits will begin very soon, but he is still unable to determine the exact date. The following is the entire interview of the Deputy Minister of Labour and Social Security Panos Tsakloglou for the RES-ABE: Q: Mr. Tsakloglou, the Auxiliary Capital Insurance Fund (TEKA) runs its third year of operation and implements an information campaign. What’s her target? A: The information campaign is implemented by the TEKA itself and seeks to bring to the fore the benefits of the capital system to young people, who are also directly interested, as well as to workers who have the opportunity to voluntarily join the new Fund. With a central message “Invest today in yours tomorrow”, it highlights the value of saving as a key instrument for economic security in the future. Key features of the new Fund are shown and explained, such as the existence and ability to control the individual account of the insured person and the state guarantee provided, with a view to encouraging/mobilising young people to act for their future and to participate/enter the TIF, providing them with the necessary information and tools for a financially safe retirement. Q: When does the second phase of the investment operation of TEKA begin? What do you think will be the benefits to the Greek economy? A: Mrs Barla, as you probably know, the investment function of the Fund is not, fortunately, a matter of minister decision. It is the responsibility of the independent Board of Directors of TEKA, selected with innovative for a public body, open, transparent and merit-based procedures. These procedures shall ensure the independence and technocratic competence of the TCA administration in order to be able to fulfil its purpose as best as possible, which is not other than optimising the savings returns of the insured, through prudent management and secure investment. According to the Fund’s planning, within the next few months, the second phase of its investment operation will begin, having in the meantime prepared properly in human resources terms, professional managers, computer systems, risk management systems, cybersecurity, supervision etc. In the long term, the TIF will accumulate huge funds, become by far the largest domestic institutional investor and contribute to the increase in domestic investment. An important part of the TCA reserves will be directed towards investments in Greece, which will give growth impetus to the economy, increase productivity, create more and better paid jobs and promote the living and well-being of citizens. Q: Next week, the percentage of the new increase in the minimum wage will be announced, following the recommendation of Labour Minister, Domna Michailidou. In its announcements, the government has highlighted as a central priority the strengthening of workers’ income. With the new increase, how close is the implementation of the minimum wage target at the end of this four-year period? A: On 1 April, the 4th successive increase in the minimum wage, which will now exceed EUR 800 from EUR 650 in 2019, will apply, contributing to ensuring a more satisfactory standard of living for our low-paid fellow citizens. Our concern is that this increase should not damage the competitiveness of the economy, which could lead to an increase in unemployment and other negative effects. I think that the positive growth rates in recent years, combined with the dynamics of the country’s economy for the next few years, as recorded by international houses and organisations, make it possible to target a minimum wage at EUR 950 and an average wage at EUR 1,500 by the end of the four years. Q: How does the implementation of the employment declaration by retired workers progress? Do you think that the abolition of the 30% withholding from their pension is a strong incentive to proceed with a statement of their employment? A: So far, according to EPKA data, some 43,000 retired workers have been registered on the platform, at the same time that figures in the past did not exceed 35,000 per year. The abolition of the 30% retention on pension is a strong incentive for pensioners who wish to rejoin the labour market, strengthening their available income and their future pension. At the same time, it is a powerful ‘weapon’ to combat undeclared work, as the concealment of their work and their respective obligations leads to the withdrawal of their pensions for a year. Q: At the same time, there is a portion of insured persons who, while fulfilling the conditions, cannot retire because of debts to e-EFKA. When is the new Labour Ministry provision to be activated that unlocks retirement for thousands of debtors? A: By order passed in November, the debt limit to e-EFKA was increased to receive a pension from EUR 20,000 to EUR 30,000 and EUR 6,000 to EUR 10,000 for former OGA insured persons. Entry into the new increased limit is a condition, on the one hand, that there is a sufficient expectation of retirement – the insured person has at least 20 years of insurance and the age of 67 or 62 years with 40 years of insurance – and, on the other hand, that the debtor has a real inability to repay his debts, as it follows from the amount of his bank deposits. To point out that paying insurance contributions is not voluntary and is a prerequisite for the sustainability of our insurance system. Therefore, any such facility cannot be granted uncritically. As regards the procedure to be followed, the applicant shall apply for the new arrangement at the same time as the pension application, giving his consent to the removal of his bank and tax confidentiality, so that his deposits can be checked. We are in a process of issuing the necessary Joint Ministerial Decision and, at the same time, the necessary adjustments are made to e-EFKA’s digital systems for the submission of the relevant applications, as well as the recovery of the necessary data, through interconnection with banking institutions. Q: What stage are the preparatory steps for the implementation of a single insurance and benefits regulation for all the Funds included in the e-EFCA? A: As you know, with the establishment of the e-EFCA, dozens of former Funds, governed by different regulations on cash benefits, joined under its umbrella. “Money benefits” are pregnancy and lotteries benefits, sickness and accident benefits, funeral expenses and some other smaller benefits, given as appropriate per former Fund. Last November, a working party was set up to draw up a conclusion in the direction of consolidating the rules in a fiscal neutral manner. For all the former Funds, the conditions for entitlement to insurance for cash benefits, the duration of coverage, the amount of benefits, the range of beneficiaries, the award procedure and any other necessary issue were examined. The current situation has already been completed, the differences between Funds have been noted and the economic analysis of alternative scenarios of consolidation has been completed. At the moment, the working party is towards the end of its work and is drafting the text of the conclusion, which will form the basis for our legislative interventions. Q: We are awaiting the launch of the electronic platform to pay the maternity allowance of the Public Employment Service (PSI) and to non-employed persons insured. When are the first payments expected to be made? A: The special provision of maternity protection to free professionals, self-employed and rural mothers is a new arrangement and therefore a platform was created from scratch to support this innovation. Obviously, the proper functioning of the platform requires a reasonable period of testing and adaptation of information systems. DYPA is already conducting the tests. Our main concern is that new mothers, who are going through such a delicate period with unnecessary visits to produce supporting documents, should not be troubled and that the process should be simplified as much as possible. The whole process will be done electronically and the supporting documents will be drawn up through interoperability of the systems. Even if the applicant is not insured, she will receive electronic information in order to pay any debts easily and effortlessly. Of course, after the passing of Law 5089/2024, this provision also concerns same-sex couples. For the above reasons, the necessary adjustments are made to the platform so that, when it is implemented, it concerns all beneficiaries and not just part of them. In order for the platform to function properly, we are in constant contact with the relevant bodies of EPCA and DYPA. I believe that payment of benefits will begin very soon, but I am still unable to determine the exact date. Source: RES-AE