From 2025, social security contributions will be reduced by one percentage point. This aims to provide businesses with the capacity to increase wages, in response to labor market shortages, with the goal of raising the average wage to €1,500 and the minimum wage to €950 by 2027, as per government commitments.
In addition, by Christmas, 2.5 million pensioners will receive their pension increases, a personal difference allowance, and additional benefits for vulnerable groups, as a buffer against inflation.
Labor Market and Unemployment Support:
With unemployment down to a single-digit figure (9.8% in Q2 2024, according to ELSTAT), the government is making changes to unemployment benefits to make them fairer and more reciprocal. New training and employment programs will be introduced next year.
Key Measures:
- Pension Increases: Approximately 2.5 million pensioners will receive an increase of 2.2% to 2.5% (possibly higher) by Christmas, applied to their January pensions. This is based on the formula “inflation + GDP divided by 2,” averaging an extra €25 per month.
- Pensions between €500 and €600 will increase by about €15.
- Pensions between €1,000 and €1,400 will see increases of €25-35.
- The national pension will rise from €426.17 to €436.8, and the basic OGA pension will increase from €399.54 to €409.5.
- Personal Difference Allowance: Pensioners who will not receive a direct increase due to maintaining a personal difference will receive an allowance of €100-200, provided their monthly pension income does not exceed €1,600 gross. This year, 670,000 pensioners are eligible for this allowance, fewer than last year, as more pensioners reduce or eliminate their personal difference.
- €200 for pensions up to €700
- €150 for pensions between €701 and €1,100
- €100 for pensions between €1,101 and €1,600
- Disability Support: 202,000 disabled individuals eligible for institutional or disability benefits from e-EFKA will receive a €200 supplement.
- Guaranteed Minimum Income: The guaranteed minimum income will be increased by 50% for 205,000 beneficiaries during Christmas. Currently, the income ranges from €216 to €432 after an 8% increase in December 2023.
- Child Benefit: 670,000 child benefit recipients will receive an additional emergency payment, equal to 1.5 times their regular monthly benefit.
- Uninsured Elderly Support: 35,000 recipients of uninsured elderly pensions and solidarity benefits will receive a €150 bonus.
- Family Support Measures: Targeted increases will be made to child benefits, housing support, and the Guaranteed Minimum Income. The overall budget for these benefits remains neutral at €1.9 billion, despite many losing eligibility due to rising incomes.
- New Unemployment Benefit: A new unemployment benefit, piloted for 15,000 unemployed individuals this fall, will be based on earnings and years of insurance contributions. The basic unemployment benefit of €510 will have a bonus of €100-200 added depending on the years of insurance.
- The bonus will apply to those with at least three years of insurance and will increase for those with more than 20 years of insurance and earnings above the average wage.
- Changes will also be made to seasonal unemployment benefits, primarily for workers in tourism and hospitality sectors, with stricter conditions for receiving the benefit as the tourism season has lengthened.