Social security system is crumbling

The governing board of the Social Security Foundation (IKA) on Thursday rejected the management’s request for money from the Social Security Capital for the Solidarity of Generations (AKAGE) for pensions for the rest of this year, while the board of the fund of the self-employed (OAEE) approved a similar request to the amount of 150 million euros.

For the last few years the ailments of the social security system have become more pronounced toward the end of each year, when the annual funding from the state budget starts to run out.

This year estimates put the total deficit of the system at around 3 billion euros, not including the 2 billion euros that IKA and OAEE owe to the healthcare service organization (EOPYY) or the 3 billion that IKA owes to the Manpower Organization (OAED).

Kathimerini understands that it was IKA’s debt to EOPYY, and the latter’s pressure for at least a partial repayment, that pushed the IKA administration to request a minimum of 200 million euros from AKAGE’s relatively small coffers, which contain around 400 million. The request was rejected by nine votes to seven, including the no vote from the Finance Ministry’s representative. At the same time, OAEE’s board approved the demand for 150 million from AKAGE, fearing that it would be unable to cover the amount for the payment of pensions. The self-employed professionals’ fund has already received additional financing from the state, amounting to 200 million euros, and is now seeking more.

The difference in the OAEE vote was in the attitude of employer associations GSEVEE and ESEE, which voted in favor of the disbursement from AKAGE, as unlike in IKA’s case, OAEE revenues are far from promising. The fund’s expired debts exceed 11 billion euros, and all debt arrangements to date have failed.

Furthermore, a large number of the self-employed insured with OAEE have applied for a freeze on their social security payments, as they are unable to meet their obligations.