Social Security

Lawyers are asked to pay irrationally high social security contributions. This concerns both the self-employed lawyers and the shareholders of law firms who besides the contributions based on their revenues also have to pay 26.95 percent of their dividends toward social security.

Freelance workers who get paid by one or two employers through invoice books for services rendered (known as "blokakia") will now pay the same amount in social security contributions as salary workers, according to a circular released on Tuesday by the Labor Ministry in an effort to tackle the major practical problems generated by (as well as the huge reaction to) recent legislation.

The government is urgently looking into ways to reduce to 10 percent the social security contributions by freelance workers who use invoice books for services rendered (known as "blokakia") - as it appears to be struggling over the details that would make the latest legislation workable.

The legislative clause introduced by former labor minister Giorgos Katrougalos concerning the social security of freelance workers who provide services to one or two employers is turning into a major headache for the ministry, which realizes it is impossible to implement.

Last year's announcement by Prime Minister Alexis Tsipras about reduced social security contributions by young scientists for their first five years at work is proving a trap: After the expiry of the five years they will have to pay retroactively and with interest all the contributions they did not pay in the first five-year period of their career, according to a circular issued on Tuesday by t

A circular issued on Friday by the Labor and Social Security Ministry, intended to clarify the social security contributions of self-employed professionals, introduces changes that will likely result in income reduction and even loss of work for some 250,000 people paid through invoices for services rendered (known in Greek as "blokaki") by up to two employers.

The government will likely have to brace for a drop in transactions, in declared incomes and therefore in public revenues as a result of increases in indirect taxation and in salary and pension deductions for taxes and social security contributions.

In view of the clear and present danger that the revenues of the new Single Social Security Entity (EFKA) will crumble due to the excessive contribution-and-tax burden on hundreds of thousands of self-employed professionals and farmers, the Labor Ministry is seeking a lifeline in the revenues of the former Social Security Foundation (IKA) and the Social Security Debt Collection Center (KEAO).

The new Single Social Security Entity (EFKA) has started operating even though various issues are still outstanding and with deficits that add up to more than 1 billion euros, as the fund that has absorbed all social security funds has not only been bequeathed 4.2 million worker-members and 2.6 million pensioners, but also the problems and the obstacles of the past.

Most self-employed professionals will have to pay higher social security contributions from next month, as will many shareholders, as changes planned by the government were sealed with the issue of two circulars by the Labor Ministry in the last few hours of 2016.