Article 120 of Law 4623/2019 on the Upper Limit of Pensions
Law 4623/2019, titled “Regulations by the Ministry of the Interior, provisions for digital governance, pension adjustments, and other urgent issues,” was published in the Government Gazette (FEK) 134, Volume A, on 9.8.2019. Article 120 of this law sets an upper limit on the monthly primary pension or pensions granted exclusively by the EFKA (Unified Social Security Fund).
A. Pensions Subject to the Upper Limit
- Every monthly primary pension, or multiple pensions due to old age, disability, or death, granted by EFKA under the provisions of Law 4387/2016, including pensions from the former OGA (Agricultural Insurance Organization), provided that part of the insurance period was completed or is before December 31, 2016.
- Every monthly primary pension or multiple pensions from EFKA due to old age, disability, or death, granted up to May 12, 2016, or retroactive to that date, and recalculated based on articles 14 and 33 of Law 4387/2016, as applicable.
- For the purposes of applying the upper limit, the pension or sum of pensions is considered the gross monthly pension, including all kinds of supplements (e.g., child benefits, personal differences as per Articles 6 and 94 of Law 4387/2016).
- Disability benefits provided by EFKA, such as the extra-institutional benefit, absolute disability allowance, and incapacity allowance, are excluded from the upper limit and continue to be paid at the amount determined before the implementation of Law 4623/2019.
B. Amount of the Upper Limit on Monthly Primary Pension or Sum of Pensions
The upper limit for monthly primary pensions or the sum of pensions is defined as the gross amount corresponding to twelve times the full national pension from paragraph 6 of Article 7 of Law 4387/2016, which corresponds to twenty years of insurance, as the amount is valid at any given time. The upper limit, when the law first took effect, was set at €4,608 (€384 * 12).
C. Start of the Upper Limit Application
For pensions granted after the implementation of Law 4387/2016 and calculated according to its provisions, the upper limit applies from the start of their payment. For those receiving a pension at the start of the law’s implementation, whose pension was recalculated under articles 14 and 33 of Law 4387/2016, the upper limit applies from the date when the new amount, resulting from the recalculation, started being paid (January 1, 2019). For the previous period (until December 31, 2018), the upper limit applied under Article 13 of Law 4387/2016, which set a much smaller limit based on whether the pensioner received one or multiple pensions.
In both cases, any amount exceeding the upper limit is recovered without interest as it was mistakenly received, with a 20% deduction from the monthly pension until the excess is fully repaid.
D. Deductions on the New Upper Limit and Examples of Pension Reductions
On the gross amount of €4,608.00, deductions include the solidarity contribution for retirees (EAS) for AKAGE, where applicable, based on the provisions of Article 38 of Law 3863/2010 and its amendments. This EAS is 14% of the upper limit, amounting to €645.12. After removing the EAS, a 6% healthcare contribution is deducted, reducing the remaining pension by €237.77. As a result, the net pension cannot exceed €3,725.11 after taxes.
Specific groups of retirees who are exempt from the EAS or healthcare contribution will continue to have those exemptions apply to the new upper limit as well.
Examples
- Example 1:
- A pensioner after May 12, 2016, receiving a gross amount of €5,984 (including national and contributory pensions). The gross amount exceeds the €4,608 upper limit, so the pension is reduced to €4,608, and the net amount becomes €3,725.11. Any excess amounts previously paid are reclaimed at 20% of the monthly pension until fully repaid.
- Example 2:
- A pensioner who was receiving a net pension of €3,000 before May 12, 2016, sees their recalculated pension amount rise to €5,984 as of January 1, 2019. After deductions for the EAS and healthcare contributions, the new pension amount remains below the upper limit for 2019. However, in 2020, the pension exceeds the upper limit, and the pension is reduced to €3,725.11.
- Example 3:
- A pensioner receiving multiple pensions has the total amount of these pensions combined and reduced according to the applicable limits.
E. Exemptions
The following are exempt from the application of this article:
- Persons covered by laws 1897/1990 and 1977/1991.
- Those entitled to military pensions, pensions for wartime veterans, national resistance fighters, or specific cultural figures such as writers and artists who receive pensions from the State.
- Those receiving personal pensions or pensions due to incapacity or death resulting from service.
